investment) and the requirement of flexibility (allowing for adaptations ensuring that the arrangement
remains economically viable and that incentives to deviate shall be minimized).
2. Taxation
Taxation constitutes a second, major source of revenue for the realization of economic, social and
cultural rights. I argue that three key considerations could guide the assessment of the Committee on
Economic, Social and Cultural Rights in assessing the tax structure adopted by States parties to the
Covenant.111 First, there is a need to expand the tax base in order to ensure that taxation, combined
with other sources of public revenue, can fund public policies that support the realization of economic,
social and cultural rights -- including access to healthcare, to education and to housing, and to social
security. Second, there is a need to speed up the reduction of poverty, and thus ensure effective
enjoyment of economic and social rights for each individual, by ensuring that the tax structure is
sufficiently progressive. Third, finally, there is a need to step up efforts to combat tax evasion:
increasing tax levels without also addressing tax evasion would be like pouring water into a leaking
bucket. These components of a human rights-compliant tax policy are reviewed in turn.
a) Widening the tax base to ensure adequate funding for the realization of social rights
In 2009, basing himself on data from 2000-2005, Martin Ravallion famously arrived at the conclusion
that only by imposing "prohibitive" tax rates (of 60% and above, and often beyond 100%) on the
relatively rich (that is, on those whose incomes exceed 13USD per day in 2005 PPP, which
corresponds to the level of consumption defining the poverty line in rich countries) would it be
possible for low-income countries to effectively end poverty. In other terms: although various other
measures might be relied on to reduce poverty in these countries, poverty was considered to be so
widespread, and wealth creation so woefully insufficient, that taxation was not a promising way to
achieve this objective.112 The implication was that, for these poor countries, redistribution of wealth
was not a substitute for economic growth and international support: before wealth could be
redistributed, there needed to be wealth to share.
Ten years have passed, however, during which economic growth has been strong for most of the
countries of this group: more recent research, using a methodology very similar to that of Ravallion,
has come to the conclusion that "most developing countries [now] have the financial scope to
dramatically speed up the end of poverty based on national capacities at the global poverty lines of
[1.90 or 2.50 USD per day]".113 That means an untapped potential. In many countries, particularly
developing countries, the tax base is very narrow, and does not allow the States concerned to mobilize
sufficient resources for the fulfilment of the rights of the Covenant.114 Inter-regional differences are
huge in this area: in developed countries, revenue from personal income tax is 8.4 percent of GDP,
whereas in Latin American countries for instance, this tax generates only 1.4 percent of GDP.115 It has
been noted that "if all developing countries were able to raise 15 per cent of their national income in
tax, a commonly accepted minimum figure (the OECD average is 37 per cent), they could realize at
least an additional 198 billion USD per year, more than all foreign development assistance
111
The argument summarized here is developed at greater length in a companion chapter by this author, which appears in
"Human Rights and Tax in an Unequal World" (forthcoming at Oxford Univ. Press).
112
Martin Ravallion, "Do Poorer Countries have less Capacity for Redistribution?", Policy Research Working Paper 5046
(Washington DC: World Bank, 2009).
113
Chris Hoy and Andy Sumner, "Gasoline, Guns and Giveaways: Is there New Capacity for Redistribution to End Three
Quarters of Global Poverty?", CGD Working Paper 433 (Washington, DC: Center for Global Development, 2016), at 19.
114
See for instance Report of the Special Rapporteur on the right to food to the thirteenth session of the Human Rights
Council, Addendum: Mission to Guatemala (3-5 September 2009), A/13/33/Add.4, para. 87.
115
Ana Corbacho, Vicente Frebes Cibils and Eduardo Lora (eds), More than Revenue: Taxation as a development tool (InterAmerican Development Bank and Palgrave Macmillan, 2013), at 115. This discrepancy, as one indicator of the degree of
progressivity of the tax system (i.e., of its ability to reduce inequalities) is hardly attenuated by taking into account the
proportion the personal income tax represented in the total tax burden: in OECD countries, the total tax burden represents
34.8 per cent of the GDP, and it is 23.4 per cent in Latin America. Therefore, the personal income tax represents about one
quarter of the tax burden in OECD countries, but only 5.98 per cent of the tax burden in Latin American countries.
26
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