Signs of hope in the Vatican

You may think what you will of monotheism in general and the Catholic Church in particular, but what is beyond dispute is that social justice is a leading concern for the first Pope from the Global South. Thus, three years ago, Pope Francis was already calling for a tax system that "must favour the redistribution of wealth, and one that protects the dignity of the poor and the lowliest, who are at constant risk of being trampled on by the powerful".

The "high-level dialogue" was jointly hosted by the Pontifical Academy of Social Sciences and the Independent Commission for the Reform of Corporate Taxation (ICRICT, see below) on 13 February 2025. The meeting organisers and venue ensured a "high-ranking" group of participants, including Nobel laureates, professors, former Presidents (current ones like Lula and Pedro Sánchez sent video messages), and representatives of UN organisations and the EU Commission. Of course there were also the NGOs that launched the ICRICT.

In her opening remarks, the President of the Pontifical Academy of Social Sciences, Sister Helen Alford, said that Pope Francis (who was unfortunately taken seriously ill on that very day) had placed the Holy Jubilee Year 2025 under the motto "Signs of Hope". And signs of hope there were in the shadow of St Peter's Basilica, despite Trump – or precisely on account of him.

Former Prime Minister of Senegal Aminata Touré recalled that each year, Africa loses more money through tax evasion and other illicit financial flows than it receives through development assistance funding and foreign investments in the continent combined. In the light of the important UN meetings taking place this year, such as the Fourth Financing for Development Conference (FfD4) or the Second World Summit for Social Development, she hoped that common sense would prevail, "something we all long for at present".

The fact that under Brazil's presidency, the G20 last year expressed support in principle for higher taxation of the super-rich was seen by many as a sign of hope. French economics professor Gabriel Zucman, one of the fiercest defenders of this idea, explained that of all social groups, people with a fortune of USD 100 million are paying the least taxes. Or, to quote Abigail Disney, grandniece and heir of Walt Disney: "My effective tax rate is lower than that of my janitor." Alas, Zucman did not elaborate further on just what a billionaire tax might look like. Edmund Valpy Fitzgerald, Professor Emeritus of International Development Finance at Oxford, then drew attention chiefly to the problems entailed: the absolutely overwhelming number of billionaires are located in the North, and the cooperation of these countries is therefore needed. Large fortunes in the South must be treated differently from those in the North, and this calls for adapted rules. Then there is the unresolved question of how the tax proceeds could be used to benefit developing countries and who should receive how much. Yet – "the right structure could replace the ODA system through tax-funded transfers based on need and possibilities" – a sign of hope.

After this digression on the topic of individual taxation, the discussion soon returned to the issue that forms part of the name of the Commission: the reform of corporate taxation. There was agreement that the OECD minimum tax is not working and that the UN is the only appropriate forum for global tax matters. Joseph Stiglitz, a Nobel Laureate in Economics, offered the following succinct opinion: "The good thing about bad times is – there is a lot of room for improvement". And he saw the most surprising sign of hope: Trump's withdrawal from the negotiations on a UN Tax Convention. "In the past, the USA always negotiated in the same manner. They drove a hard bargain, forced everyone to make concessions, they watered things down, only to end up neither signing nor ratifying the agreement." So, it's better if they are no longer present at all. He also drew on the pausing of the Corrupt Foreign Practices Act – the anti-corruption law – to put forward a concrete suggestion about a possible way of reacting to Trump. The pausing signals that bribery is again admissible, even "great for American business". Stiglitz said that because this invitation to corruption works just like subsidies, countries could deploy the countervailing measures allowed by the WTO in response to subsidies. Alternatively, they could tax US multinationals for climate financing purposes or in order to cushion the dismantling of USAID. "React creatively to a dysfunctional government in the USA!"

In his video message, Spanish Prime Minister Pedro Sánchez was somewhat more realistic. He came out very clearly in favour of taxing the super-rich, called for an ambitious UN Tax Convention, and for observance of the principle whereby taxation takes place where profits are actually generated. "We must address a simple question: do we control global taxation or do we allow the system to control us?" Spain has a key role to play as it will be hosting FfD4 in Seville – its clear language is therefore a sign of hope.

Indian economist and Co-Chair of the ICRICT, Jayati Ghosh, went a step further: "Challenging times are an opportunity to reorganise, build new alliances and find allies in unexpected places. "If, against the backdrop of the berserker in Washington and as the prime mover in the global tax negotiations, European countries were to reach out to Africa, that would be more than just a sign of hope.