John Christensen ■ Oxfam calls for World Tax Summit
From the Oxfam blog:
The corporate tax rules we live with today are from a by-gone era and remain essentially unchanged since the 1920s, from a time when world trade was less than 1 percent of what it is today, a time when companies “resided” very clearly in one country and “sourced” from another, a time when the digital economy didn’t exist and it was much more difficult to manipulate your companies’ activities to take advantage of different tax regimes to pay less tax.
Today’s multinationals can exploit yesterday’s tax system to shift profits and dodge tax. Big companies are running rings around the current tax system. And our government leaders are letting them get away with it.
Countries not companies
It’s countries, not companies, that need to do the job of re-writing the global tax rules. To some extent, that work has already begun. Oxfam has welcomed global efforts to reform the international tax system. But current efforts don’t go far enough. Under the current reform process, not all countries have a say, big companies have too much influence and countries that are effectively tax havens – like Luxembourg – are given a seat at the negotiating table. Would you let a tobacco company write cancer prevention policy? Would you let a fast food chain write healthy eating policy? Will we let tax havens make new global tax rules even less fair?
At the same time, developing countries – which may lose $100 billion a year from tax dodging and generous tax incentives – aren’t given an equal voice in the negotiations under way to rewrite the tax rules. This means that current talks exclude more than a third of the world’s population. That’s why Oxfam is calling for a World Tax Summit, where all countries are invited and where the rights and needs of citizens are prioritised over the profits of corporate giants. We can’t make tax fair if the journey to change isn’t fair. That journey must begin with a truly inclusive World Tax Summit.
Read more here.
The author
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This is a Trojan horse. Pick a class that people don’t like (companies). Make a claim they don’t pay enough. Then increase their taxes.
Low and behold you find out the tax affects more than the class described or as in this case the company just passes on the tax to the customers, employees and shareholders.
Only people can pay taxes not companies.
The hoary old ‘tax incidence’ myth. It’s nonsense, I’m afraid Neill. We will be publishing a whole lot more on tax incidence, and a whole lot more, in the coming weeks. In the meantime, see e.g. this
http://taxjustice.blogspot.de/2013/01/tax-incidence-is-corporate-income-tax.html
There is no refutation of my claim that you can only tax people in your link. The tax will by paid by share holders, employees and customers. The proportions will be determined by the flexibility each has to walk away and take a different deal. A share holder can just sell the stock and put the money in a foreign company that has a better corporate tax structure. Take the foreign tax credit and pay the same dividend and capital gains tax rate.
Taxing capital reduces the capital stock of a country.
From the comments left it is obvious that some of the remarks are made by those who could not run a modern company. These tax structures are important. They must be built correctly. Once the US came off the Gold Standard in 1971, the Balance of Payments stopped being a worry. Not till we discover that only negative interest will begin to move the economy forward, will be recognize that Trade either is balanced by a responsible country, or left to people who only think that austerity works.
This is the line from Avaaz:
“A summit this week will discuss a new independent international tax body that would make tax dodgers pay”
Clear as mud, will they be wanting a global gov’t to go with that?
If we have a global govt then democracy can kiss it’s a**e goodbye – there will be no effective representation for citizens with a global sized gov’t, it’ll be corporate control every step of the way, complete dystopia, destruction of the planet. We need to be very careful to make sure that this does not happen no matter how bad wars or terrorism get.
Talk about global taxes and make a treaty, fine.
But we must not have global taxation.
No taxation without representation, ever, under any circumstances.
this isn’t global government they’re talking about; it’s a body to set international guidelines that countries can adopt into their laws if they see fit. The system exists already: it’s run by the OECD, a club of rich countries – the idea is to shift power towards the UN which is a more representative body and includes rich and poor countries.
And the elephant in the room is the ‘hidden economy’
20% of the EU economy is fraudulent and doesn’t pay tax. Even Germany is at 13% hidden economy.