Maximum Available Resources “Each State Party to the present Covenant undertakes to take steps, individually and through international assistance and cooperation, especially economic and technical, to the maximum of its available resources, with a view to achieving progressively the full realization of the rights recognized in the present Covenant by all appropriate means, including particularly the adoption of legislative measures” (ICESCR Article 2.1). Implication: Governments cannot ignore human rights obligations on the grounds of lack of resources. They must show that they are making the maximum use of available resources to realize human rights. Diane

Maximum Available Resources Star Government Expenditure Government Revenue Development Assistance Debt & Deficit Financing Monetary Policy & Financial Regulation Diane

Maximum Available Resources below shows, many comparable countries also saw a decline in tax revenues beginning in 2000. However, the decline in the US is much sharper than in other countries and the percentage of total tax revenues to GDP in the United States was already significantly lower than that of other OECD countries at almost every given time (the US percentage was 25.5 in 2004 compared to 50.4 in Sweden, for example).

Maximum Available Resources In the 30-year period between 1975 and 2005, United States nominal GDP rose continuously from less than $1 to more than $12 trillion, permitting the United States to maintain its status as the world’s largest economy. During the same period, however, total tax revenues as a percentage of US GDP did not rise as consistently. As Figure 1 below shows, between 2000 and 2004, total tax revenue as a percentage of GDP plummeted from nearly 30% to around 25%. This means that in this four-year period, tax revenues fell to a 30-year low.

Example: Tax Evasion and Avoidance in Mexico Radhika Source: Balakrishnan and Elson (2011), Economic Policy and Human Rights, Figure 5.16

Distributive Issues: VAT Share and Incidence by Income Groups, Mexico, 2002 Radhika Source: Balakrishnan and Elson (2011), Economic Policy and Human Rights, Figure 5.12

Maximum Available Resources Corporate share of tax vs individual Corporate income tax receipts as a fraction of GDP has fallen by half from 3.5-4% to less than 2% while corporate profits as a share of GDP has not fallen.[1] Corporate income tax revenues have declined not only in terms of the share of federal taxes that they comprise, but also when they are measured as a share of the economy. Corporate tax revenues averaged nearly 5 percent of GDP in the 1950s and 4 percent in the 1960s, but then fell sharply to nearly 1 percent of GDP in 1983, reflecting the combination of tax cuts and economic conditions. After rising slightly above 2 percent of GDP during part of the 1990s, corporate receipts fell again after 2000, when the economy slowed. In 2003, actual corporate revenues dropped to 1.2 percent of GDP, the lowest level since 1937, except for 1983 [1] Thomas Piketty and Emmanuel Saez, How Progressive is the US FederalTax System? A historical and International Perspective. Working Paper http://www.nber.org/papers/w12404