Taxing the Brain Drain

There is a way to compensate for the brain drain from the less developed countries (LDCs) to the developed countries (DCs). A supplementary income tax can be imposed on immigrants' earnings in the developed countries; the funds raised in this manner can then be routed to the less developed countries for development spending. I first put forth this proposal in Daedalus in 1972. Since then, it has attracted attention in both LDCs and DCs, as well as in the work of international agencies. Two important conferences have been held this year, in which documentation by the Secretariats for intergovernmental deliberations included an extended discussion of this tax proposal. These are the Nairobi Conference on Trade and Development (UNCTAD) and the International Labor Organization (ILO) Conference on World Employment. The international conference at Bellagio in February 1974, funded by the Rockefeller Foundation, dealt with the feasibility and optimal format of such a tax, from the viewpoint of constitutionality, compatibility with human rights, and revenue possibilities in developed countries receiving the most immigrants. Distinguished lawyers, economists, and social scientists interested in problems of world order contributed to that discussion. (The proceedings, plus legal and economic conclusions, are published in Bhagwati and Partington, eds., Taxing the Brain Drain: A Proposal Amsterdam: North-Holland, 1976.*) Pakistan even paid the proposal the compliment of