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	Shoring up our public services starts with fighting tax avoidance and tax evasion more aggressively by World Inequality Lab, agencies International Consortium of Investigative Journalists   July 2020   The Missing Profits of Nations by Thomas Torslov, Ludvig Wier, Gabriel Zucman - World Inequality Lab   Between 1985 and 2018, the global average statutory corporate tax rate has fallen by about half, from 49% to 24%. One reason for this decline is international tax competition.   In this paper, Thomas Torslov, Ludvig Wier and Gabriel Zucman explore the extent to which globalization and tax competition are redistributing profits across nations. They analyze how the location of corporate profits would change if all countries adopted the same effective corporate tax rate, keeping global profits and investment constant.   To do so, they exploit new macroeconomic data known as foreign affiliates statistics. As a result, the authors find that profits would increase by about 15% in high-tax European Union countries and 10% in the United States.   These results can be used to quantify the tax revenues that individual countries could gain under different corporate tax reform scenarios, and to quantify the revenue implications of a formulary apportionment system.   Key-results   Close to 40% of multinational profits are shifted to tax havens globally;   European Union countries appear to be the tax competition largest losers: about 35% of the shifted profits come from E.U. (non-haven) countries, close to 30% from developing countries, and about 25% from the United States;   Profitability in Local vs. Foreign Firms: foreign firms are more profitable than local firms in tax havens, and local firms are more profitable in high-tax countries;   U.S. multinationals are the main “shifters”: about half of all the shifted profits ultimately accrue to U.S. parents, while about 30% accrue to E.U. parents;   Profit shifting reduces the corporate tax revenue of the European Union by around 20%. Globally, the tax revenue loss is around 10%;   The havens that collect the largest amount of revenue appear to be those that impose the lowest tax rate on foreign profits: the revenue-maximizing tax rate appears to be less than 5%.   As an example, Ireland has a 5% corporate tax rate and generates much more revenue than non-haven countries.   Policy conclusions:   Cutting corporate tax rates is less likely to generate quick positive effects on wages than textbook economic models suggest. For wages to rise, factors of production that complement labor need to increase. This can happen fast if tangible capital flows from abroad, less so if it is mostly paper profits that move across borders.   Profit shifting reduces the effective rates paid by multinationals compared to local firms, which could affect competition.   Profit shifting also reduces the taxes paid by the wealthy, as ownership of these firms is concentrated. This might call for offsetting changes in individual income taxation, or changes in the way multinational companies are taxed.   http://wid.world/news-article/missing-profits-of-nations/ http://wid.world/news-article/how-much-are-the-poor-losing-from-tax-competition-10/ http://wid.world/news-article/ten-facts-about-inequality-in-advanced-economies/ http://wid.world/news-article/accounting-for-wealth-inequality-dynamics-methods-estimates-and-simulations-for-france/ http://wid.world/news   http://www.ips-journal.eu/regions/global/article/show/tax-justice-is-more-important-than-ever-4430/ http://www.icij.org/investigations/panama-papers/crumbling-economies-must-tackle-tax-evasion-to-tackle-coronavirus-crisis-experts-warn/ http://www.icij.org/investigations/panama-papers/what-is-a-tax-haven-offshore-finance-explained/ http://www.icij.org/investigations/ http://taxjustice.net/take-back-control/#taken_over http://fsi.taxjustice.net/en/ http://bit.ly/3hAXyvT   Apr. 2020   Shoring up our public services starts with fighting tax avoidance and tax evasion more aggressively, by Scilla Alecci for the International Consortium of Investigative Journalists.   As emergency coronavirus medical and social programs lay bare economic and social deficiencies around the world, experts are calling for a more forceful tax response to the crisis.   They said the dramatic spike in jobless claims combined with the vast additional burden on health systems should be a tax call-to-arms for governments internationally.   The pandemic has highlighted global reliance on digital and pharmaceutical behemoths, and at the same time should shine a spotlight on their tax behavior, said Rasmus Corlin Christensen, a researcher with the International Centre for Tax and Development.   'Digital giants [and other companies] have been exploiting the international tax system, using its legal opportunities to reduce their tax burden and design their business model around minimizing their tax bill', Christensen told the International Consortium of Investigative Journalists. 'There is this mismatch between the important role that they play in our society and their tax behavior'.   Now that governments are facing an economic meltdown, they are confronted with a reality that many economists and tax justice advocates have been warning about for a long time: more than $800 billion in lost tax revenues, annually.   In 2016, the ICIJ-led Panama Papers investigation exposed the offshore financial dealings of politicians, companies and criminals, helping governments recover at least $1.2 billion in fines and back taxes by April 2019. But trillions of dollars remain hidden offshore.   Gabriel Zucman, an economist at the University of California, Berkeley, told ICIJ one of the clear lessons of the current economic dislocation was: Tax havens are at the heart of the financial and budgetary crisis.   Each year, he estimates, 40% of multinational profits are shifted to tax havens and 8% of personal wealth is stashed offshore.   As past ICIJ investigations revealed, some of those multinationals include tech companies like Facebook, Uber and Amazon that have become vital links across the world, as it scrambles to deal with the viral outbreak through mass quarantines.   The list continues with Apple, which said it's producing protective gear for medical workers, medtech companies like Medtronic, which produces ventilators, and Johnson & Johnson, which is working on a vaccine in partnership with a U.S. state agency.   Experts say the paradox of the current crisis is that the revenue lost due to the actions of tax havens, and these and other corporate giants, could have been used to save lives and keep entire economies afloat as governments responded to the crisis.   Zucman said if there was one lesson we could take from the current economic crisis, it was: 'Shoring up our public services starts with fighting tax avoidance and tax evasion more aggressively'.   'When countries like Luxembourg offer tailored tax deals to multinational companies, when the British Virgin Islands enables money launderers to create anonymous companies for a penny, and Switzerland keeps the wealth of corrupt elites out of sight in its coffers', Zucman said, 'they all steal the revenue of foreign nations'.   Developing countries are particularly vulnerable to such a system, with yearly tax losses estimated at around $200 billion, a figure roughly equivalent to the amount the United Nations predicts they will lose due to the coronavirus pandemic.   While often rich in natural resources, those nations routinely see their precious commodities extracted by multinationals that shift profits out to their offshore shell companies and deprive the source country of much-needed tax revenue.   Last year, ICIJ's Mauritius Leaks investigation revealed how many corporations and wealthy individuals exploit so-called tax treaties to essentially divert tax revenue from poor nations back to their coffers. While legal, tax treaties often become a way to avoid paying tax in developing countries, which may not be able to compete with the incentives offered by tax havens like Mauritius and others.   'Sustainable, robust public responses to shocks require administrative capacity and tax resources', Christensen said. 'Tax avoidance and global tax competition, more broadly, strain the ability of countries to raise those resources'.   To level the playing field, member states of the Organisation for Economic Co-operation and Development (OECD) have been working on reforming the global tax system, which was set up in a pre-internet era.   The plan would include new ways of taxing digital companies and reallocating some of their profits to the countries where they have customers - often different from their business address or the subsidiary holding their intellectual property. (Think, for instance, of social media, e-commerce or mobile banking companies that may be incorporated in Europe but make lots of profits in developing countries.)   The OECD plan would also call for a minimum global effective tax rate for multinationals, making it harder to move profits around and cut their tax bills. The result is estimated to be an additional $100 billion of revenue a year, Christensen said.   However, many important details, such as the minimum tax rate, are yet to be decided. And, in a tragic turn of events, the negotiations - which could benefit the countries whose economies are being badly hit by the coronavirus - may stall because of the pandemic.   To mitigate COVID-19's impact on global economies, some experts have also suggested more effective reforms targeting wealthy individuals and tax evasion.   'Tax systems play another crucial role in that economic question at the heart of this crisis', wrote Tax Justice Network's Nicholas Shaxson, also the author of 'Treasure Islands: Tax havens and the Men who Stole the World'.   'Now is the time to push hard for tax justice', he added, calling for a strong fiscal stimulus which will lead to poor and vulnerable people paying less and rich people and strong, profitable corporations paying more.   The outbreak and the ensuing lockdown have disproportionately hit the most vulnerable, as high-income earners can continue to work from home or use their wealth to weather the shock, according to a recent study by Zucman, Camille Landais and Emmanuel Saez.   Solidarity is the best strategy, the economists wrote in the report which focuses on Europe and its tax system. However, past crises have shown that more long-term reforms are necessary to create a sustainable system that lasts long after the emergency is over.   A time-limited wealth tax on Europe's 1%, they explained, could generate a large amount of tax revenue while preserving wealth for the rest of the population.   Globally, bold measures are also needed to enforce laws against tax evasion, which causes an increased tax burden and an unequal distribution of such burden.   Take for example, Italy, which has the world's highest number of COVID-19-related deaths and recently announced a $28 billion plan to rescue the virus-hit economy. The country has a 30% evasion rate and, in 2016, it lost $118.5 billion to tax dodging and underreporting, according to the latest government estimates.   'The taxes that are evaded have to be compensated for by higher taxes on the law-abiding', Zucman told ICIJ or else they translate into less public goods and services for the rest of us - such as less access to health care.   http://www.icij.org/investigations/panama-papers/crumbling-economies-must-tackle-tax-evasion-to-tackle-coronavirus-crisis-experts-warn/ http://www.transparency.org/news/feature/panama_papers_four_years_anonymous_companies_corporate_secrecy http://www.corporatetaxhavenindex.org/en/ http://gfintegrity.org/ http://www.icrict.com/ http://www.globaltaxjustice.org/en/news Visit the related web page
	168 million people worldwide need humanitarian assistance and protection by Mark Lowcock UN Office for Coordination of Humanitarian Affairs   May 2020   COVID-19 has now affected every country and almost every person on the planet. But the most devastating and destabilizing impacts will be felt in the world's poorest countries.   They face a double whammy. First, the direct health impact, second, the impact of the global recession and the domestic measures taken to contain the virus.   We can right now see incomes plummeting and jobs disappearing, food supplies falling and prices soaring, children missing vaccinations, meals and school.   We must be prepared for a rise in conflict, hunger, poverty and disease as economies contract, export earnings, remittances and tourism disappear, and health systems are put under great strain. Lockdowns and economic recession may mean a hunger pandemic ahead for millions.   In many places the impact of national measures to contain the spread of the virus and the global recession may be larger than the direct impact of the disease.   We must fight the disease, but in the poorest countries it won't be the only battle we face. A coronavirus vaccine is essential, but it will not save a child starving to death.   If we do not act swiftly, we face a reversal of the development gains we have made over several decades.   Based on our analysis, the cost of protecting the most vulnerable 10 percent of people in the world is equivalent to just 1 percent of the global stimulus package the world's richest countries have put in place to save the global economy.   To meet these costs, wealthy countries will need to make significant one-off increases in their foreign aid commitments. And international financial institutions will need to change lending agreements with vulnerable countries.   The alternative is dealing with the spill-over effects over many years to come. That would prove even more painful, and much more expensive. For everyone. This cannot be business as usual. Extraordinary measures are needed, reflecting the extraordinary problem we face.   The humanitarian system is collaborating in a concerted effort to respond to the humanitarian impacts of the virus on the world's poorest and most vulnerable people.   In March we published the COVID-19 Global Humanitarian Response Plan. This is the international community's primary fundraising vehicle to fight the virus in the most vulnerable low and middle income countries.   It brings together appeals from across the UN system. Non-governmental organizations and NGO consortiums are key partners in delivering it. They have been instrumental in helping shape the plan and they will be funded through it.   Humanitarian needs continue to rise. Today's update includes programs to tackle the growth in food insecurity. It outlines measures to address the needs of the most vulnerable, including women and girls, children, the elderly, and people living with disabilities.   Despite operational challenges, our UN and NGO partners on the ground are ready to fully implement this updated plan.   I urge donors to act with empathy and self-interest today. As the Secretary-General has said, this pandemic threatens the whole of humanity. The whole of humanity must respond.   http://www.unocha.org/global-humanitarian-overview-2021 http://unocha.exposure.co/ http://www.wfp.org/stories/hunger-pandemic-food-security-report-confirms-wfps-worst-fears http://www.ipcinfo.org/ipcinfo-website/ipc-alerts/ Visit the related web page
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