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	The Corporate Tax Haven Index by John Christensen Tax Justice Network   The Corporate Tax Haven Index ranks the world's most important tax havens for multinational corporations, according to how aggressively and how extensively each jurisdiction contributes to helping the world's multinational enterprises escape paying tax, and erodes the tax revenues of other countries around the world. It also indicates how much each place contributes to a global 'race to the bottom' on corporate taxes.   In rich and poor countries, multinational corporations rely on a wide range of public services to support their activities: the health and education systems that underpin their workforces and their intellectual property; the roads and other infrastructure that they use to ship their goods and services; or the public courts and police forces that protect their property and their rights.   All these things need to be paid for, largely through raising tax. When multinationals use corporate tax havens to escape paying their contributions to these public goods and services, they are free-riding off the taxes paid by other people - you and me.   When Amazon, arguably the world's biggest monopolist, pays minus one percent in US federal corporate taxes, it's clear that the international tax rules are rigged. Corporate tax havens are the heart of the problem.   This cheating, whether 'legal' or not, generates great harm. First, it undermines support for democracy and for markets, by fostering a widespread (and correct) sense that there is one set of light, low-tax rules for large and powerful corporations and wealthy individuals, and a harsher set of rules for everyone else.   Second, it generates enormous economic and political inequalities, by shifting the burden of tax away from the wealthy shareholders of corporations and onto the backs of ordinary people, who must either suffer higher taxes themselves or reduced public services.   In this sense, corporate tax cuts are best viewed as a burden - a burden that falls most heavily on women and on disadvantaged minorities. Third, by helping large players to out-compete and kill their smaller, more locally based rivals on a factor 'tax cheating', that has nothing to do with genuine productivity or innovation or wealth creation, this distorts markets and contributes to the rapid rise of monopoly and market power.   Fourth, it damages innovation, by rewarding corporate managers for turning their attention away from building better products and services, and towards tax minimisation and financial engineering.   Fifth, it worsens financial instability by boosting too-big-to-fail banks and disproportionately rewarding highly profitable risk-taking at taxpayers expense, over more mundane industrial and other wealth-creating activities. Sixth, for all these reasons and more, it creates 'Robber Baron' recessions, and reduces economic growth.   Race to the bottom   Corporate tax havens also foster a worldwide race to the bottom. As one jurisdiction introduces a new tax loophole or incentive or tax cut to attract mobile capital, others will try to put in place an even more attractive offering, triggering others in turn to join in, resulting in an unseemly race to the bottom that steadily shifts the tax burden away from wealthy shareholders of multinational corporations, who are mostly wealthy people, and towards lower-income groups.   That is why, in many countries, corporate taxes are falling while corporate profits are rising. As a result of this race, tax cuts and incentives don''t stop at zero: they turn negative.   There is no limit to multinationals appetite for free-riding off public goods and subsidies paid for and provided by others. This race to the bottom gets called "competition" but it is a completely different beast from the market competition we are familiar with, and for the reasons given above it is always pernicious.   Current data and research suggests that governments around the world lose over US$500 billion - half a trillion dollars - in tax each year due to corporate tax havens. The IMF, for instance, recently estimated that rich countries lose some $450 billion annually to tax-haven related corporate tax dodging, while lower-income countries lose $200 billion (which represents a bigger share relative to their smaller economies).   But remember: tax losses are just one dimension of the damage. The harm that corporate tax havens inflict on democracy, on society, and on our trust in politics and markets, is incalculable.   The scale of corporate tax haven activity has been growing remarkably fast, especially since the 1990s: a Tax Justice Network study in 2018 found that US-headquartered multinationals alone used tax havens to escape paying $130 billion in corporate taxes in 2012 - up from just $12 billion in 1994. At the same time as tax avoidance has been soaring, headline corporate tax rates have been falling fast.   John Christensen, Tax Justice Network: "The Corporate Tax Haven Index provides one of those really rare glimpses of what actually happens underneath the bonnet of the global economy. It tells several disturbing stories, in what we can only describe as a full frontal assault on the national tax sovereignty of every country on the planet. That's what they're doing. They're attacking the tax regimes of other countries.   What it reveals is a really disturbing picture of international failure. We see the powerful European countries and especially Britain lying behind their clusters of tax havens and they have wrecked economies across the world and are now threatening social stability and democracy across the world.   But when countries like India say, no, that doesn't work for us, we're going our own way, then it gets very serious indeed. And the G20 simply cannot afford to ignore this any longer. So the road is open for the next steps. And of course the next steps are going to take us in the direction the Tax Justice Network has always been talking about. And that is in the direction of proper apportionment of profits to the countries where the profits are aligned with the economic substance.   In other words, we're moving towards unitary taxation and formula apportionment. And I think we should all welcome the opportunity now to create a framework protecting multinational companies that suits the entire world, not just the most powerful countries in the world."   http://corporatetaxhavenindex.org/ http://www.taxjustice.net/2019/06/26/the-corporate-tax-haven-index-solving-the-worlds-broken-tax-system-in-our-monthly-podcast-the-taxcast/   * Legally binding instrument to regulate, in International Human Rights Law, the activities of Transnational Corporations and other Business Enterprises. (Revised draft July 2019): http://bit.ly/2YRLiSi Visit the related web page
	After Neoliberalism by Joseph Stiglitz Project Syndicate, agencies   May 2019   What kind of economic system is most conducive to human wellbeing? That question has come to define the current era, because, after 40 years of neoliberalism in the United States and other advanced economies, we know what doesn't work.   The neoliberal experiment - lower taxes on the rich, deregulation of labor and product markets, financialization, and globalization - has been a spectacular failure. Growth is lower than it was in the quarter-century after World War II, and most of it has accrued to the very top of the income scale. After decades of stagnant or even falling incomes for those below them, neoliberalism must be pronounced dead and buried.   Vying to succeed it are at least three major political alternatives: far-right nationalism, center-left reformism, and the progressive left (with the center-right representing the neoliberal failure). And yet, with the exception of the progressive left, these alternatives remain beholden to some form of the ideology that has (or should have) expired.   The center-left, for example, represents neoliberalism with a human face. Its goal is to bring the policies of former US President Bill Clinton and former British Prime Minister Tony Blair into the twenty-first century, making only slight revisions to the prevailing modes of financialization and globalization.   Meanwhile, the nationalist right disowns globalization, blaming migrants and foreigners for all of today's problems. Yet as Donald Trump's presidency has shown, it is no less committed - at least in its American variant - to tax cuts for the rich, deregulation, and shrinking or eliminating social programs.   By contrast, the third camp advocates what I call progressive capitalism, which prescribes a radically different economic agenda, based on four priorities.   The first is to restore the balance between markets, the state, and civil society. Slow economic growth, rising inequality, financial instability, and environmental degradation are problems born of the market, and thus cannot and will not be overcome by the market on its own.   Governments have a duty to limit and shape markets through environmental, health, occupational-safety, and other types of regulation.   It is also the government's job to do what the market cannot or will not do, like actively investing in basic research, technology, education, and the health of its constituents.   The second priority is to recognize that the 'wealth of nations' is the result of scientific inquiry - learning about the world around us - and social organization that allows large groups of people to work together for the common good. Markets still have a crucial role to play in facilitating social cooperation, but they serve this purpose only if they are governed by the rule of law and subject to democratic checks.   Otherwise, individuals can get rich by exploiting others, extracting wealth through rent-seeking rather than creating wealth through genuine ingenuity.   Many of today's wealthy took the exploitation route to get where they are. They have been well served by Trump's policies, which have encouraged rent-seeking while destroying the underlying sources of wealth creation. Progressive capitalism seeks to do precisely the opposite.   This brings us to the third priority: addressing the growing problem of concentrated market power. By exploiting information advantages, buying up potential competitors, and creating entry barriers, dominant firms are able to engage in large-scale rent-seeking to the detriment of everyone else.   The rise in corporate market power, combined with the decline in workers bargaining power, goes a long way toward explaining why inequality is so high and growth so tepid.   Unless government takes a more active role than neoliberalism prescribes, these problems will likely become much worse, owing to advances in robotization and artificial intelligence.   The fourth key item on the progressive agenda is to sever the link between economic power and political influence. Economic power and political influence are mutually reinforcing and self-perpetuating, especially where, as in the US, wealthy individuals and corporations may spend without limit in elections.   As the US moves ever closer to a fundamentally undemocratic system of 'one dollar, one vote', the system of checks and balances so necessary for democracy likely cannot hold: nothing will be able to constrain the power of the wealthy.   This is not just a moral and political problem: economies with less inequality actually perform better. Progressive-capitalist reforms thus have to begin by curtailing the influence of money in politics and reducing wealth inequality.   There is no magic bullet that can reverse the damage done by decades of neoliberalism. But a comprehensive agenda along the lines sketched above absolutely can. Much will depend on whether reformers are as resolute in combating problems like excessive market power and inequality as the private sector is in creating them.   A comprehensive agenda must focus on education, research, and the other true sources of wealth. It must protect the environment and fight climate change with the same vigilance as the Green New Dealers in the US and Extinction Rebellion in the United Kingdom.   And it must provide public programs to ensure that no citizen is denied the basic requisites of a decent life. These include economic security, access to work and a living wage, health care and adequate housing, a secure retirement, and a quality education for one's children.   This agenda is eminently affordable; in fact, we cannot afford not to enact it. The alternatives offered by nationalists and neoliberals would guarantee more stagnation, inequality, environmental degradation, and political acrimony, potentially leading to outcomes we do not even want to imagine.   Progressive capitalism is not an oxymoron. Rather, it is the most viable and vibrant alternative to an ideology that has clearly failed. As such, it represents the best chance we have of escaping our current economic and political malaise.   http://www.project-syndicate.org/commentary/oecd-proposal-multinational-tax-avoidance-by-joseph-e-stiglitz-2019-10 http://www.icrict.com/press-release/2019/10/9/icrict-oecds-proposals-are-canonising-gradualism-and-increasing-inequality-1 http://www.taxjustice.net/2019/10/07/oecd-reform-weak-on-corporate-tax-havens-harsh-on-poorer-countries/ http://bit.ly/2ou802C Visit the related web page
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