Dashboard map for 2022 SDG Index Goal #17 ratings. Data source: sdgindex.com
Government spending in health & education (% of GDP)
This measure looks at the portion of government spending (i.e., your tax dollars) on health and education, measured as a percentage of the whole GDP, aiming by 2030 for 15% of national GDP spent on health and education. Cuba takes the gold, with 23% of GDP spent by the government on health and education. The percentage of global government spending on health and education alone is almost 9.6% as of 2018, with zero growth since 2015.
Education and health are but another measure of poverty outside of income. This is reflected in the Human Development Index (HDI), which is similar to the SDG Index. The HDI creates a composite index of human development, measuring GDP per capita, life expectancy at birth, and years of education.
This indicator is in the hands of the government to act. Your task, as a singular citizen, is to call or write a letter to your government representative, requesting they increase the portion of spending on health and education to 15% by 2030.
Governments have national accounts, like the accounts of a business. They have debts like a business, and collect revenue in the form of tax or duties on imported goods. To manage all these flows of money through their accounts, governments develop fiscal policies guiding how they intend to raise revenues. Fiscal policy guides whether to levy taxes or cut them. On the other hand, the fiscal policy directs how to spend or invest the revenue. Different countries' governments have different fiscal policies regarding how much of their revenue they decide to spend, also differing on what to spend it on.
What a government wants to spend their money on may differ to what they do spend their money on - what they can afford may instead decide this. Many LDC governments, of course, are aware of the priority of poverty alleviation, and the necessary spending required. But if the citizens are too poor to tax, then the government will have little money to spend on what they know is needed to improve the standard of living of their people.
The Classification of the Functions of Government (COFOG) comprises 10 categories. Below, I’ve used my home state’s 2021-22 budget, categorised according to this classification for illustrative purposes, with figures in Australian dollars:
As we see, the classifications of health and education are the biggest categories of expenditure. But the above example also offers us an insight into what other competing classifications vie for expenditure.
How can readers contribute toward this indicator? They’re unable to affect the national government’s budgetary spending, other than by their votes at the ballot box. With regards to the LDCs, the contribution of aid championed throughout these pages ought to cover this shortfall. Readers could aim to apportion, by 2030, 15% of their gross income toward their own health and education spending. Given your circumstances, I’m uncertain what expenses this 15% of income may come at the expense of. If your country scored red for this indicator, your government’s been unable or unwilling to provide enough of a safety net in the vital fields of health and education to uphold the most important pillars of your wellbeing. You should prioritise these two areas to give yourself the best fighting chance of alleviating poverty, or keeping it at bay. After ensuring we have enough income for subsistence, and can feed ourselves and our families, girding our health and education prospects on the order of 15% of gross income is essential for whatever our income levels.
Summary:
For OECD country readers, affirm your annual commitment to give 0.7% of your gross income as aid.
For readers in countries off-track:
contact your government, requesting they increase public spending on health and education to 15% of GDP
spend 15% of your gross income on health and education
For high-income and all OECD DAC countries: International concessional public finance, including official development assistance (% of GNI)
Readers must assume I have a lot of gall to put this indicator to page, such has been its ubiquity heretofore. Still, it'd be remiss to list all indicators except one, even if readers may have grown tired of the point it's been attempting to make throughout the tapestry of other indicators.
For clarification, the measure is a percentage of gross national income, rather than total aid. For example, the US is the biggest aid giver in total dollars, but as a proportion of gross national income, this amounts to one of the worst percentages, at 0.18% of GNI as of 2021.
Prior to the setbacks of COVID-19, the OECD estimated the annual financing shortfall to achieve the SDGs amounted to $2.5 trillion. Within a 2020 gross world product (GWP) of $85 trillion, this is only 3%. You already know 0.7% of GNI of the OECD DAC members will end extreme poverty. Even now, after the devastation of COVID-19 increased the annual funding shortfall to $4.2 billion, the global economy has this money lying around. The equivalent of a quarter of the GWP in savings is at the world's disposal, $22 trillion worth - enough to achieve the SDGs fivefold.
Of note, the optimum for this indicator is 1% of GNI, rather than 0.7%, justified as an average of the 5 best performers. I’ve encouraged 0.7% throughout, because this has been affirmed on repeated occasions in international agreements. However, to achieve this indicator, please round up to a full 1% of your gross income.
Summary: For high-income country readers, give 1% of your gross income as aid.
Other countries: Government revenue excluding grants (% of GDP)
This indicator focuses on the means of developing countries to raise revenue, which could then be spent on poverty alleviation, financing progress toward the respective Goals.
This revenue originates from levying taxes, fines, fees, rents from resources, and property and sales taxes, aiming by 2030 for a government revenue equal to 40% of GDP. The world total (including high-income countries) for government revenue as a percentage of GDP equals 23.4%, close to the same as from the start of the SDG period.
What happens if a government is unable or unwilling to raise enough revenue to then spend on its populace? What also happens if the high-income countries are withholding aid, as they are? This leaves citizens to fend for themselves, in a state of vulnerability few of us from countries with higher levels of government revenue would envy.
Citizens living at or near subsistence are unable to give whatever income they have to the government. If they could, this would be in the hope their government will translate this revenue into services like health or education. What will come with a rising of the populace out of poverty? A greater capacity to tax the population, affording the capacity to put such revenue toward yet more poverty alleviation efforts. When one pays taxes, they expect its disbursement to benefit the greater good, but also to benefit oneself, in the provision of services such as public health and education. Countries with increased government revenue will build out a middle-class able to shoulder greater levels of taxation above the poverty line.
The prior indicator relating to high-income country aid interrelates. The benefits of such aid flows will in time provide a sustainable tax base to the donor-recipient country. The donor-recipient country’s hand will be on the first rung of the development ladder, and will then be able to raise revenue from their domestic tax base.
Summary: For OECD country readers, affirm your annual commitment to give 1% of your gross income as aid.
Corporate Tax Haven Score (best 0-100 worst)
The Corporate Tax Haven Score is a ranking of countries by the Tax Justice Network. Some of the biggest culprits are territories of countries, outside the main jurisdiction of the home country. The top tax haven rankings go to the UK territories of the British Virgin Islands, the Cayman Islands, Bermuda, and Jersey. The Brits are complicit in perpetuating this system, a reflection of their libertarian, mercantile history.
A company’s operations may be outside the country of its headquarters, but it creates value from production in the country it operates from, benefiting from the infrastructure and talent of the country of operation. Thus, it should pay taxes to the country it operates in. Yet companies finagle the system to claim as their tax base a country with low company tax rates, or tax-free altogether, which is legal in tax havens. In many instances, the tax havens appear to exist as a separate territory only as a means to operate as a tax haven.
The overwhelming majority of countries are on track for this indicator, whilst the offenders flout their tax haven status. Following the UK territories in the ranking is the Netherlands, the Dutch having similar historical antecedents to the UK as a nation built upon international trading. Switzerland and Luxembourg, fortresses of secret banking, score red, as does Ireland, which promotes itself as a darling of large corporations wishing to take advantage of its low company tax rates. We know from the infamy of the Panama Papers that the isthmus nation has set itself up as the offshore haven of Latin America. Singapore also, can trace its laissez-faire corporate environment to its British forebears.
If you’re a citizen of one of these countries, managing a company in your resident country, or otherwise a shareholder, and are benefitting from such low company rates, is it your fault your government has established such a low rate? Whatever the answer, you and your compatriots will pay for it in the guise of lost revenue, hindering the spending of such tax revenue toward social goods benefitting the people.
Are you managing or holding shares in a company domiciled in one of these countries, but operating elsewhere? Is the company taking advantage of this country’s competitive company tax rates? Is it claiming this country as its headquarters, without it being a major location of operations? If so, relocate the business’ tax residency to the country of operation.
If you have manufacturing facilities or a sizable workforce outside the tax haven, you should be paying tax where you're operating. What you’re doing is in likelihood legal in the tax haven you’re taking advantage of, yet it’s incompatible with the spirit of sustainable development.
If you know you’re taking advantage of such low company tax rates in the above jurisdictions, pull out, and contribute to the tax authority where you’ve reaped the benefits of a sound business environment to create such profits. Even if your leanings are libertarian or laissez-faire, the country of operation educated your staff, and invested in R&D based on tax dollars. It is illogic and incorrect to claim you alone were responsible for the boons of your entrepreneurialism. It's false to idealise you alone deserve the full benefits of its bounty. An entire business ecosystem of government investments, centuries in the making, allowed such an opportunity. You harnessed it, and made the most of the situation, but after all your successes, you live in a society which deserves to share in your success, rather than an island nation you’re yet to set foot in.
Summary: Sell shareholdings in companies domiciled in a country or territory of a country off-track.
Statistical Performance Index
The availability of reliable, high-quality data is imperative for monitoring progress on the SDGs, very much true in poverty-stricken countries with meagre resources to mobilise. The importance of data is more crucial, as these corners of the planet are in the direst need of monitoring their progress. There’s little you, as a reader, can do to affect the resourcing and quality of output from your national statistical office. The Statistical Performance Index aims for each country to score 100 by 2030, its optimal score. The countries facing major challenges are the LDCs, or countries in a form of crisis such as active conflict. We fall back on the prescription of DAC countries offering aid to finance the resourcing of national statistical offices of countries off-track.
Summary: For OECD country readers, annually give 1% of your gross income as aid, aiming for a global Statistical Performance Index score of 100.
Financial Secrecy Score (best 0-100 worst) *
Like the Corporate Tax Haven Score indicator, the Financial Secrecy Index (FSI) is also run by the Tax Justice Network, scoring 0 to 100, with 0 being the optimal score, aiming by 2030 for a score of 42.7.
Forms of financial secrecy can also act as forms of tax avoidance and tax competition with other jurisdictions, for individuals and entities to avoid the levies imposed by governments intended to go toward the public. Each of the countries and territories scoring red has its unique mechanisms and forms of financial secrecy. The contents of the FSI’s report outline why each country or territory has earned the score they have.
Casey Michel’s American Kleptocracy is an illuminating book outlining how the US has evolved into one of the modern era’s great bastions of financial secrecy, surpassing Switzerland’s vaunted reputation, bringing the stereotype of offshore havens onto the shores of the US mainland. Entities incorporated in the US states of Delaware, Nevada and Wyoming can operate as shell companies, the beneficial owner’s unknown, often even to state authorities, offering a negligible threshold of accountability for the beneficiaries. Such shell companies could be financing terrorism or any manner of ills, also making tax evasion easier - legal entities in the country founded upon the tax revolt of the Boston Tea Party.
What can individuals do to curb damage incurred from such countries? Non-residents should incorporate entities in countries, states, or territories other than those mentioned. To do otherwise is to further the secrecy credentials of these countries, states, or territories. The purpose of establishing such opaque frameworks is to attract those looking to incorporate an entity, customers spending incorporation fees, and other related administrative fees in the state or territory. Otherwise, such countries, states or territories have little other means to generate revenue - Delaware being an example, due to its small land area and lack of natural resources. Thus, Delaware became the most competitive among US states for the incorporation of businesses.
If you're a citizen of a country scoring red for this indicator, you could advocate for your country’s government to alter its laws around financial secrecy. This has been difficult to change, as it's a prime means for the richest to maintain and further concentrate their wealth. It is, in effect, a parallel system, which government authorities are protective of. It requires a mass movement from an electorate and respective parliaments to alter, outside our scope for this book’s purposes.
Summary: Sell shareholdings in companies domiciled in a state, territory, or country off-track, if business operations are based outside.
Shifted profits of multinationals (US$ billion) *
We need only focus on a couple of countries off-track for this indicator:
Ireland & UK
Switzerland
Belgium, Netherlands & Luxembourg
This indicator aims to end profit shifting by 2030. The countries considered off-track for this indicator are the tax havens, rather than the countries shifting the profits. For instance, Apple or Meta are headquartered in Silicon Valley in the US, but shift their profits to Ireland, therefore, the country receiving the shifted profits scores negative, even though the multinational company's headquarters is in the US.
Research estimates multinational companies shifted 40% of their profits offshore, totalling $US900 billion in 2018, at the expense of $US 200 billion, or 10%, of global tax revenue.
The indicator is OECD-only, which omits Singapore, which receives a lot of shifted profits. The Netherlands gets in on the action within its kingdom’s territories in the Caribbean e.g., Curacao and Aruba. The UK is the king of shifting profits to tax haven jurisdictions - to island territories Jersey and Guernsey, off the coast of Great Britain in the English Channel. Other British territory tax havens in the Caribbean or Atlantic include Bermuda, the Cayman Islands and the British Virgin Islands.
The UK is the biggest offender of tax havens, but its government can pretend it's doing the right thing at face value within the bounds of Great Britain and Northern Ireland. All the while, the government and wealthy know they have a valve for those with little compunction about depriving their home country of tax revenue.
The most sickening part is such tax avoidance is legal for those able to afford the tax lawyers - such are the benefits of being a multinational corporation, where you can shift profits wherever the tax law is most advantageous. The Irish people fail to enjoy the huge profits shifted from the multinational operations. This is because the Irish corporate tax rate is so low to encourage such practices, creating a race to the bottom for other countries to compete.
What can you, as an individual, do about these tax regimes if you live in the above countries? Although the targeted action should be upon the countries off-track, we’ll instead lay this at the feet of managers and shareholders of multinational companies engaging in such practice.
Summary: For managers and shareholders of companies shifting profits to the countries off-track, repatriate the profits to the countries of business operation. For shareholders of companies failing to heed this demand, divest your shareholdings.
For high-income and all OECD DAC countries: International concessional public finance, including official development assistance (% of GNI)
Readers must assume I have a lot of gall to put this indicator to page, such has been its ubiquity heretofore. Still, it'd be remiss to list all indicators except one, even if readers may have grown tired of the point it's been attempting to make throughout the tapestry of other indicators.
For clarification, the measure is a percentage of gross national income, rather than total aid. For example, the US is the biggest aid giver in total dollars, but as a proportion of gross national income, this amounts to one of the worst percentages, at 0.18% of GNI as of 2021.
Prior to the setbacks of COVID-19, the OECD estimated the annual financing shortfall to achieve the SDGs amounted to $2.5 trillion. Within a 2020 gross world product (GWP) of $85 trillion, this is only 3%. You already know 0.7% of GNI of the OECD DAC members will end extreme poverty. Even now, after the devastation of COVID-19 increased the annual funding shortfall to $4.2 billion, the global economy has this money lying around. The equivalent of a quarter of the GWP in savings is at the world's disposal, $22 trillion worth - enough to achieve the SDGs fivefold.
Of note, the optimum for this indicator is 1% of GNI, rather than 0.7%, justified as an average of the 5 best performers. I’ve encouraged 0.7% throughout, because this has been affirmed on repeated occasions in international agreements. However, to achieve this indicator, please round up to a full 1% of your gross income.
Summary: For high-income country readers, give 1% of your gross income as aid.
Other countries: Government revenue excluding grants (% of GDP)
This indicator focuses on the means of developing countries to raise revenue, which could then be spent on poverty alleviation, financing progress toward the respective Goals.
This revenue originates from levying taxes, fines, fees, rents from resources, and property and sales taxes, aiming by 2030 for a government revenue equal to 40% of GDP. The world total (including high-income countries) for government revenue as a percentage of GDP equals 23.4%, close to the same as from the start of the SDG period.
What happens if a government is unable or unwilling to raise enough revenue to then spend on its populace? What also happens if the high-income countries are withholding aid, as they are? This leaves citizens to fend for themselves, in a state of vulnerability few of us from countries with higher levels of government revenue would envy.
Citizens living at or near subsistence are unable to give whatever income they have to the government. If they could, this would be in the hope their government will translate this revenue into services like health or education. What will come with a rising of the populace out of poverty? A greater capacity to tax the population, affording the capacity to put such revenue toward yet more poverty alleviation efforts. When one pays taxes, they expect its disbursement to benefit the greater good, but also to benefit oneself, in the provision of services such as public health and education. Countries with increased government revenue will build out a middle-class able to shoulder greater levels of taxation above the poverty line.
The prior indicator relating to high-income country aid interrelates. The benefits of such aid flows will in time provide a sustainable tax base to the donor-recipient country. The donor-recipient country’s hand will be on the first rung of the development ladder, and will then be able to raise revenue from their domestic tax base.
Summary: For OECD country readers, affirm your annual commitment to give 1% of your gross income as aid.
Corporate Tax Haven Score (best 0-100 worst)
The Corporate Tax Haven Score is a ranking of countries by the Tax Justice Network. Some of the biggest culprits are territories of countries, outside the main jurisdiction of the home country. The top tax haven rankings go to the UK territories of the British Virgin Islands, the Cayman Islands, Bermuda, and Jersey. The Brits are complicit in perpetuating this system, a reflection of their libertarian, mercantile history.
A company’s operations may be outside the country of its headquarters, but it creates value from production in the country it operates from, benefiting from the infrastructure and talent of the country of operation. Thus, it should pay taxes to the country it operates in. Yet companies finagle the system to claim as their tax base a country with low company tax rates, or tax-free altogether, which is legal in tax havens. In many instances, the tax havens appear to exist as a separate territory only as a means to operate as a tax haven.
The overwhelming majority of countries are on track for this indicator, whilst the offenders flout their tax haven status. Following the UK territories in the ranking is the Netherlands, the Dutch having similar historical antecedents to the UK as a nation built upon international trading. Switzerland and Luxembourg, fortresses of secret banking, score red, as does Ireland, which promotes itself as a darling of large corporations wishing to take advantage of its low company tax rates. We know from the infamy of the Panama Papers that the isthmus nation has set itself up as the offshore haven of Latin America. Singapore also, can trace its laissez-faire corporate environment to its British forebears.
If you’re a citizen of one of these countries, managing a company in your resident country, or otherwise a shareholder, and are benefitting from such low company rates, is it your fault your government has established such a low rate? Whatever the answer, you and your compatriots will pay for it in the guise of lost revenue, hindering the spending of such tax revenue toward social goods benefitting the people.
Are you managing or holding shares in a company domiciled in one of these countries, but operating elsewhere? Is the company taking advantage of this country’s competitive company tax rates? Is it claiming this country as its headquarters, without it being a major location of operations? If so, relocate the business’ tax residency to the country of operation.
If you have manufacturing facilities or a sizable workforce outside the tax haven, you should be paying tax where you're operating. What you’re doing is in likelihood legal in the tax haven you’re taking advantage of, yet it’s incompatible with the spirit of sustainable development.
If you know you’re taking advantage of such low company tax rates in the above jurisdictions, pull out, and contribute to the tax authority where you’ve reaped the benefits of a sound business environment to create such profits. Even if your leanings are libertarian or laissez-faire, the country of operation educated your staff, and invested in R&D based on tax dollars. It is illogic and incorrect to claim you alone were responsible for the boons of your entrepreneurialism. It's false to idealise you alone deserve the full benefits of its bounty. An entire business ecosystem of government investments, centuries in the making, allowed such an opportunity. You harnessed it, and made the most of the situation, but after all your successes, you live in a society which deserves to share in your success, rather than an island nation you’re yet to set foot in.
Summary: Sell shareholdings in companies domiciled in a country or territory of a country off-track.
Statistical Performance Index
The availability of reliable, high-quality data is imperative for monitoring progress on the SDGs, very much true in poverty-stricken countries with meagre resources to mobilise. The importance of data is more crucial, as these corners of the planet are in the direst need of monitoring their progress. There’s little you, as a reader, can do to affect the resourcing and quality of output from your national statistical office. The Statistical Performance Index aims for each country to score 100 by 2030, its optimal score. The countries facing major challenges are the LDCs, or countries in a form of crisis such as active conflict. We fall back on the prescription of DAC countries offering aid to finance the resourcing of national statistical offices of countries off-track.
Summary: For OECD country readers, annually give 1% of your gross income as aid, aiming for a global Statistical Performance Index score of 100.
Financial Secrecy Score (best 0-100 worst) *
Like the Corporate Tax Haven Score indicator, the Financial Secrecy Index (FSI) is also run by the Tax Justice Network, scoring 0 to 100, with 0 being the optimal score, aiming by 2030 for a score of 42.7.
Forms of financial secrecy can also act as forms of tax avoidance and tax competition with other jurisdictions, for individuals and entities to avoid the levies imposed by governments intended to go toward the public. Each of the countries and territories scoring red has its unique mechanisms and forms of financial secrecy. The contents of the FSI’s report outline why each country or territory has earned the score they have.
Though the 2022 SDG Index displays the 2020 FSI scores, the 2022 FSI published since shows the US ranked first for most secretive, with a score of 76, followed by Switzerland and Singapore.
Casey Michel’s American Kleptocracy is an illuminating book outlining how the US has evolved into one of the modern era’s great bastions of financial secrecy, surpassing Switzerland’s vaunted reputation, bringing the stereotype of offshore havens onto the shores of the US mainland. Entities incorporated in the US states of Delaware, Nevada and Wyoming can operate as shell companies, the beneficial owner’s unknown, often even to state authorities, offering a negligible threshold of accountability for the beneficiaries. Such shell companies could be financing terrorism or any manner of ills, also making tax evasion easier - legal entities in the country founded upon the tax revolt of the Boston Tea Party.
What can individuals do to curb damage incurred from such countries? Non-residents should incorporate entities in countries, states, or territories other than those mentioned. To do otherwise is to further the secrecy credentials of these countries, states, or territories. The purpose of establishing such opaque frameworks is to attract those looking to incorporate an entity, customers spending incorporation fees, and other related administrative fees in the state or territory. Otherwise, such countries, states or territories have little other means to generate revenue - Delaware being an example, due to its small land area and lack of natural resources. Thus, Delaware became the most competitive among US states for the incorporation of businesses.
If you're a citizen of a country scoring red for this indicator, you could advocate for your country’s government to alter its laws around financial secrecy. This has been difficult to change, as it's a prime means for the richest to maintain and further concentrate their wealth. It is, in effect, a parallel system, which government authorities are protective of. It requires a mass movement from an electorate and respective parliaments to alter, outside our scope for this book’s purposes.
Summary: Sell shareholdings in companies domiciled in a state, territory, or country off-track, if business operations are based outside.
Shifted profits of multinationals (US$ billion) *
We need only focus on a couple of countries off-track for this indicator:
Ireland & UK
Switzerland
Belgium, Netherlands & Luxembourg
This indicator aims to end profit shifting by 2030. The countries considered off-track for this indicator are the tax havens, rather than the countries shifting the profits. For instance, Apple or Meta are headquartered in Silicon Valley in the US, but shift their profits to Ireland, therefore, the country receiving the shifted profits scores negative, even though the multinational company's headquarters is in the US.
Research estimates multinational companies shifted 40% of their profits offshore, totalling $US900 billion in 2018, at the expense of $US 200 billion, or 10%, of global tax revenue.
The indicator is OECD-only, which omits Singapore, which receives a lot of shifted profits. The Netherlands gets in on the action within its kingdom’s territories in the Caribbean e.g., Curacao and Aruba. The UK is the king of shifting profits to tax haven jurisdictions - to island territories Jersey and Guernsey, off the coast of Great Britain in the English Channel. Other British territory tax havens in the Caribbean or Atlantic include Bermuda, the Cayman Islands and the British Virgin Islands.
The UK is the biggest offender of tax havens, but its government can pretend it's doing the right thing at face value within the bounds of Great Britain and Northern Ireland. All the while, the government and wealthy know they have a valve for those with little compunction about depriving their home country of tax revenue.
The most sickening part is such tax avoidance is legal for those able to afford the tax lawyers - such are the benefits of being a multinational corporation, where you can shift profits wherever the tax law is most advantageous. The Irish people fail to enjoy the huge profits shifted from the multinational operations. This is because the Irish corporate tax rate is so low to encourage such practices, creating a race to the bottom for other countries to compete.
What can you, as an individual, do about these tax regimes if you live in the above countries? Although the targeted action should be upon the countries off-track, we’ll instead lay this at the feet of managers and shareholders of multinational companies engaging in such practice.
Summary: For managers and shareholders of companies shifting profits to the countries off-track, repatriate the profits to the countries of business operation. For shareholders of companies failing to heed this demand, divest your shareholdings.