Legislative Proposal: Global Tax Cooperation for Funding Universal Social Protection

The Global Social Protection Act: A Framework for International Tax Cooperation

Preamble

Recognizing the inherent dignity of all human beings and the fundamental right to social security as enshrined in international human rights instruments;

Acknowledging the widening global inequalities, the persistent challenges of poverty, and the increasing precarity faced by working people and vulnerable populations worldwide;

Observing that current national and international tax systems often fail to capture fair contributions from multinational corporations and ultra-high-net-worth individuals, leading to a race to the bottom in taxation and a depletion of public resources necessary for social investments;

Convinced that universal social protection is not merely a moral imperative but also an economic stabilizer, a driver of inclusive growth, and a cornerstone of resilient, just, and peaceful societies;

Affirming the principle of international solidarity and shared responsibility in addressing global challenges and fostering human well-being;

Hereby proposes the following legislative framework for enhanced global tax cooperation to secure sustainable funding for universal social protection.

Article 1: Recognition of Universal Social Protection

1. Universal Social Protection is hereby recognized as a fundamental human right and a core pillar of global sustainable development.
2. Every individual, regardless of their nationality, residency, or economic status, shall have access to a comprehensive social protection floor, encompassing at minimum: access to essential healthcare, basic income security for children, persons of working age in case of unemployment, sickness, maternity or disability, and old-age pensions.

Article 2: Principles of Global Tax Cooperation

This Act shall be guided by the following principles:

1. Fairness and Progressivity: Tax burdens shall be distributed equitably, with higher contributions from those with greater capacity to pay.
2. Transparency: All tax-related information, including beneficial ownership and corporate financial reporting, shall be made publicly accessible to combat illicit financial flows and ensure accountability.
3. Solidarity: Nations shall cooperate to create a global tax system that supports collective well-being and reduces inequalities between and within countries.
4. Sufficiency: Tax revenues shall be adequate to sustainably fund universal social protection systems globally.
5. Democratic Oversight: The development and implementation of global tax policies shall be subject to robust democratic scrutiny and participation.

Article 3: Mechanisms for Enhanced Global Tax Revenue

To ensure the sustainable funding of universal social protection, the World Parliament shall establish and implement the following mechanisms:

Section 1: Global Minimum Corporate Tax Rate

1. A binding Global Minimum Corporate Tax Rate of 25% shall be established for all multinational enterprises, applicable to profits generated in every jurisdiction where they operate.
2. Mechanisms shall be implemented to reallocate taxing rights to market jurisdictions where profits are generated through sales and user engagement, irrespective of physical presence.

Section 2: International Wealth Taxation

1. Member States shall cooperate to implement coordinated national wealth taxes on ultra-high-net-worth individuals (e.g., those with net assets exceeding USD 50 million), with a view to establishing a global framework for minimum effective rates.
2. A global asset registry shall be developed and maintained to enhance transparency and prevent capital flight and wealth concealment across borders.

Section 3: Digital Services Tax Harmonization

1. A harmonized global framework for taxing the profits of large digital services companies shall be developed, ensuring that taxes are paid where value is created and users reside, rather than solely where intellectual property is registered.

Section 4: Financial Transaction Tax (FTT)

1. A modest Financial Transaction Tax (e.g., 0.1% on equity and bond trades, 0.01% on derivatives) shall be levied on certain financial transactions across all major financial markets, to curb speculative behavior and generate significant revenue.

Section 5: Combating Tax Evasion and Illicit Financial Flows

1. Strengthened international cooperation on automatic exchange of tax information, including the expansion of the Common Reporting Standard (CRS) to cover all financial assets and beneficial ownership.
2. Mandatory public beneficial ownership registries for all legal entities and arrangements shall be established and interconnected globally.
3. Enhanced penalties for individuals, corporations, and financial institutions that facilitate tax evasion, aggressive tax avoidance, and illicit financial flows.
4. Increased support and protection for whistleblowers who expose tax crimes.

Article 4: The Global Social Protection Fund (GSPF)

Section 1: Establishment and Purpose

1. A Global Social Protection Fund (GSPF) shall be established under the direct oversight of the World Parliament.
2. The GSPF shall receive a significant portion (e.g., 50%) of the revenues generated through the global tax cooperation mechanisms outlined in Article 3.
3. The primary purpose of the GSPF is to provide financial and technical support to Member States, particularly developing countries, to establish, strengthen, and expand their national universal social protection systems.

Section 2: Revenue Allocation and Disbursement

1. Funds from the GSPF shall be allocated based on objective criteria, including national income levels, poverty rates, social protection coverage gaps, and commitment to human rights.
2. Disbursements shall prioritize investments in core social protection components such as universal healthcare, child benefits, old-age pensions, unemployment insurance, and disability benefits.
3. Funds shall be disbursed directly to national social protection agencies, subject to robust monitoring, accountability frameworks, and performance indicators.

Article 5: Governance and Oversight

1. A World Tax and Social Protection Authority (WTSPA) shall be established as a subsidiary body of the World Parliament to oversee the implementation of this Act.
2. The WTSPA shall be responsible for monitoring compliance with global tax standards, facilitating dispute resolution, conducting research, and providing recommendations for continuous improvement.
3. The WTSPA shall include representatives from Member States, civil society organizations, labor unions, and academic experts, ensuring broad stakeholder participation.

Article 6: Capacity Building and Technical Assistance

1. The WTSPA, in collaboration with relevant international organizations, shall provide technical assistance and capacity-building support to Member States, especially developing countries, to strengthen their national tax administrations, improve revenue collection, and design and implement effective social protection programs.

Article 7: Implementation and Ratification

1. This Act shall enter into force upon ratification by a majority of Member States representing at least two-thirds of the global population.
2. The World Parliament shall convene an international treaty conference to finalize the specific details and timelines for the implementation of the mechanisms outlined herein.
3. Regular reviews of the Act's effectiveness and impact shall be conducted by the World Parliament every five years, with provisions for adjustments and amendments as needed.

Conclusion

This legislative proposal represents a bold but necessary step towards a more just, equitable, and stable world. By fostering genuine global tax cooperation, we can unlock the resources needed to ensure that every human being enjoys the fundamental right to social protection, thereby building a future where prosperity is shared, and no one is left behind. This is not merely an economic policy; it is an investment in human dignity, societal resilience, and global peace.