Two American women representatives, Senator Elizabeth Warren and Congresswoman Alexandria Ocasio-Cortez, are determined to make taxation one of the central issues in the United States 2020 election campaign. They both express the will to do away with the taboo on taxing the rich. They are right.
The fact that two women have kick-started a much-needed debate about taxes in the United States is not a coincidence. As revealed by a 2015 IMF study, countries with higher levels of income inequality also generate higher gender inequalities across health, education, labour market participation and representation.
In recent years, women’s organisations, movements and advocates around the world have been outspoken about the links between tax evasion and tax avoidance and gender equality.
When corporations do not pay their fair share of taxes, there is less money to invest in public services, sustainable infrastructure and social protection, which are the key drivers for gender equality. Providing education, health care and care facilities has a direct impact on women. Due to social norms, the unpaid care burden falls disproportionately on their shoulders - on average, they spend 3.3 times as much time as men do on unpaid care.
Without affordable childcare services, for example, women often struggle to remain in the labour market and secure social protection entitlements through employment.
Lower tax revenue also means less funding in infrastructure. Without investment in electricity, the productivity of women’s household work and of women farmers is also limited. Without investment, the digital gender gap will continue to increase, denying women equal access to information and educational opportunities. Poor water and sanitation systems also impacts women and girls.
In sub-Saharan African countries, where two-thirds of the population do not have access to clean and safe water, the chore of fetching drinking water falls disproportionately on girls and women, considerably reducing their time go to school or to work.
Without resources, countries cannot keep on investing in non-contributory social protection or social assistance.
Nearly 65 per cent of people above retirement age living without a regular pension are women. In Latin America and Asia, for example, the expansion of social assistance pensions has contributed to reducing gender gaps in coverage and provided women with greater access to personal income in their old age.
Cash transfers have been associated with a rise in women’s empowerment relating to marriage, safe sex and fertility as well as reductions in physical abuse by male partners.
Aggressive tax planning by corporations also forces countries to cover their fiscal deficits by increasing indirect taxes such as consumption taxes. These policies have a very negative effect on poor people and informal workers.
The existing system of taxing the global profits of multinational corporations enables systemic tax avoidance by large multinational corporations.
Public discontent over corporate tax scandals, as revealed by government investigations and whistle-blowers, has increased.
At the Independent Commission for the Reform of International Corporate Taxation (ICRICT), of which I am a member, we hope a new opportunity has finally emerged to redesign an international progressive taxation system with the potential to reduce inequalities, including the gender one.
It is also time to stress the need to have equal participation of women and men in these bodies, ensuring that these institutions have gender taxation expertise. There is no gender equality without fiscal justice.
Sepúlveda is a member of the Independent Commission for the Reform of International Corporate Taxation. Previously, she was the United Nations Special Rapporteur on Extreme Poverty and Human Rights