Tax the rich to help promote social inclusion, says Jeffrey Sachs

by David Sherfinski | @dsherfinski | Thomson Reuters Foundation
Wednesday, 17 November 2021 17:58 GMT

FILE PHOTO: A picture illustration of U.S. dollar, Swiss Franc, British pound and Euro bank notes, taken in Warsaw January 26, 2011. REUTERS/Kacper Pempel/File Photo

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Economist warns inequality will worsen as workers compete with tech advances, and private sector alone can't reverse it

By David Sherfinski

WASHINGTON, Nov 17 (Thomson Reuters Foundation) - The challenge of combatting inequality will increase as workers compete with advances in technology, economist Jeffrey Sachs warned on Wednesday, calling for robust government intervention.

Private enterprise alone cannot be counted on to fix glaring disparities in wealth, said Sachs, who advocated levying taxes on wealth and private companies to ensure "social inclusion for all."

"The challenges will get worse in the future because technology will continue to replace jobs, will continue to limit opportunities for those who do not have a college education," he said.

"And that means working-class families that cannot afford a college education for their children."

The director of the Center for Sustainable Development at Columbia University in New York was speaking on the first day of Trust Conference, the Thomson Reuters Foundation's annual flagship event.

"If the rich act with impunity and can amass even fortunes of tens or hundreds of billions of dollars and not pay taxes along the way, well then, you can't have social inclusion," said Sachs, who has advised three United Nations secretaries-general.

"These divisions are going to widen unless we get a grip on public policy to ensure that there is inclusion."

Parts of northern Europe are "pretty close" to a standard of social inclusion where almost everybody has access to key social safety programs like healthcare, child care and paid leave, but much of the world is not, he said.

"The battle is in countries like the United States with these libertarian, let the rich keep anything they want, let politics be oriented towards the rich philosophy."

Much of President Joe Biden's domestic agenda, which includes an expanded social safety net, is currently bogged down in the U.S. Congress.

Sachs said the recent focus on environmental, social, and governance (ESG) principles in the private sector, while worthwhile, can only go so far.

"Social inclusion and decent work is not merely a matter of what happens in an enterprise, though that's very important – and worker representation is extremely crucial," he said.

"It's also a matter of what happens in society at large, in broad public policy, in budgets – and that's where the struggle is."

"We must tax wealth and tax the rich and tax the companies so that we have the chance to ensure social inclusion for all."

Sachs is also president of the U.N. Sustainable Development Solutions Network, which works to promote the U.N.'s Sustainable Development Goals (SDGs) – a set of goals that includes aspirations to cut poverty and promote equality.

He said for lower-income countries, key tenets of those goals - like access to healthcare and education - need financial support.

"We know that these goals ... are absolutely unachievable unless there is also a financial system globally that enables the poor(er) countries to have the fiscal space to be able to provide these basic services," he said.

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(Reporting by David Sherfinski. Editing by Claire Cozens. Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers the lives of people around the world who struggle to live freely or fairly. Visit http://news.trust.org)

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