Arne O. Holm says The Search for Tax Loopholes Is Still More Decent Than Saving the Planet

Norwegian version.

Next week, top political leaders, international organizations, bank directors, and philanthropists, are meeting in Paris. They are all invited by the president of France, Emmanuel Macron, and are meeting under the title "A New Global Financing Pact."

The West is absent

For decades, the biggest challenge in the fight to save the climate has been to get the richest countries to foot some of the bill for the poorest parts of the world. This will be one of the main topics of the Paris meeting as well. 

Perhaps that is why the leaders of the richest part of the world will not be participating in the meeting. Last I checked, President Emmanuel Macron and the German Chansler Olaf Scholz were the only Europeans that had signed up for the meeting, but that might change.

Russia is sanctioned, but two other allied BRICS countries, China and Brazil, are participating. A fourth BRICS country, India, is visiting the US and Joe Biden, in what is a quite overexaggerated meeting, even by American standards.

Many rich states in both East and West are ingratiating themselves with India for military and economic reasons.

A recurrence of such summits like the one taking place in Paris next week, is the hunt for taxes from the largest multinational companies. 

The OECD, the Organisation for Economic Co-operation and Development, and G7, an international forum for the richest, democratic states, have had this on the agenda for many years.

Gigantic fortunes

However, as it always is when it comes to taxation of the largest fortunes and the highest incomes, tax lawyers run ahead of most national and international organizations. 

The world's currently two richest, the tech giant Elon Musk, and the French business magnate Bernard Arnault, are sitting on bigger fortunes alone than the Norwegian oil fund. In return, they pay little tax.

One of the reasons why the world's richest pay low taxes on both income and fortune is that they mostly choose where they want to tax themselves. Ireland is, together with Estonia and Hungary, the European tax haven for multinational companies.

Therefore, companies such as Google, Apple, and just over 1500 other international companies have offices in Ireland. Not because the operations take place in Ireland, but because Ireland has a lower corporation tax than most other countries. 

International tax floor

Private fortunes, not only companies, are moved to where the tax is lowest, not where the money is earned. Norwegian fortunes are not the only ones out on an eternal tax flight.

At the same time, intensive work is done to introduce an international "tax floor". There is no justice in how values created by workers in some of the world's poorest countries almost exclusively benefit the richest countries.

There is a long way to go to reach the target and the suggestions presented in the OECD or in Paris next week are so watered-down that they are barely recognizable to those who sit at the end of the table. 

Yet, an acknowledgment of the fact that the planet can only be saved if state-financed muscles are present is slowly, but surely emerging. 

If the melting of the Arctic is to be stopped or slowed down, the world's poorest countries must also be enabled to contribute. Russia's war against Ukraine has remained us of another public expenditure that will dramatically increase for many decades.

Willing to pay

The richest among us are eager to say that they would like to pay taxes.

They just are not willing to pay the taxes necessary to give their descendants and the rest of us a safe life and to get the planet below the boiling point. 

The private companies are creating values that are necessary for a functional society, but are also benefitting from an international tax structure that moves fortunes and incomes furthest away from those who need it the most.

I initially wrote about the BRICS countries India, China, Russia, And South Africa. Many aspects separate these countries. What they have in common, except for Russia, is that they are emerging economies rising in protest against American-European financial dominance.

The list of participating countries for the meeting in Paris without both democracy and a developed economy, is long.

Thus far, the lack of participation from Western democracies at a high political level at the same meeting, shows that the uprise is not being taken seriously or understood.

That is bad news in any case, for the climate, and thereby also for us who benefit greatly from both democracy and a solidly financed state.

This commentary was originally published in Norwegian and has been translated by Birgitte Annie Molid Martinussen.