Fiscal policy – and hence also tax policy – is one of the most important steering instruments of governments. The true priorities of policies are often revealed more clearly by budgets and tax legislation than they are by declarations and action programmes. Also, a government’s fiscal policy reflects the political influence of certain interest groups. Are defense budgets or social welfare budgets being raised? Who enjoys tax reliefs, and how are they compensated for? Answers to these questions are crucial to whether governments are fulfilling their international and national commitments or whether they may not be meeting them under the pretext of budget policy constraints. The most important obligations of governments include respecting, protecting and ensuring human rights, among them the economic, social and cultural rights (ESC rights). Therefore, it is necessary to examine the impacts fiscal policy may have on complying with and realising these rights.
At an international expert conference on “Tax Justice – Human Rights – Future Justice” held in Berlin on the 27th November 2012, participants took a close look at the importance of tax policies for the realization of the economic, social and cultural human rights.
Based on inputs from that conference, a recently-released briefing paper argues that fiscal policy can generally make a threefold contribution to realising human rights. It can raise revenue to finance public goods and services required for the realisation of human rights; it can contribute to a redistribution of income and assets from the richer to the poorer strata of society, thus promoting the realisation of their human rights; and with certain goods and services, it can contribute to an internalisation of their ecological and social costs and thus counteract conduct detrimental to human rights.
But raising the “maximum available resources” at national and international levels can raise a number of obstacles and problems, many of them unsolvable without international cooperation. That is where principles like the Maastricht Principles on Extraterritorial Obligations of States in the Area of Economic, Social and Cultural Rights, a commentary on the ICESCR formulated by an international group of human rights experts, become relevant. In paragraph 29 this document states:
“States must take deliberate, concrete and targeted steps, separately, and jointly through international cooperation, to create an international enabling environment conducive to the universal fulfillment of economic, social and cultural rights, including in matters relating to bilateral and multilateral trade, investment, taxation, finance, environmental protection, and development cooperation.”
This and other human rights instruments being developed during the last years keep gaining significance for the tax justice agenda. This is a promising development for tax justice advocates who will be able to take more advantage of the mechanisms and tools contained in the international system of human rights.
Klaus Schilder is development finance officer at MISEREOR, the German Catholic Bishop’s Organisation for Development Cooperation.