Steffen Ganghof
- Published in print:
- 2000
- Published Online:
- November 2003
- ISBN:
- 9780199240920
- eISBN:
- 9780191600180
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/0199240922.003.0013
- Subject:
- Political Science, Comparative Politics
While tax competition is widely regarded as a major fiscal constraint on the welfare state, in fact, very little is known about its real impact. How have advanced industrialized states reacted to the ...
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While tax competition is widely regarded as a major fiscal constraint on the welfare state, in fact, very little is known about its real impact. How have advanced industrialized states reacted to the growing mobility of parts of their tax base? To what extent has tax competition resulted in a shift of burdens to less mobile tax bases? In answering these questions, the article identifies the different shape and force of tax competition in different areas of taxation, and the differing ways in which countries have responded. The conclusion is that the pressures of international tax competition are real, but so are countervailing economic and political pressures that work against a general ‘race to the bottom’ in the taxation of potentially mobile bases. At the same time, revenue‐preserving adjustment strategies have prevented large‐scale revenue losses at the price of creating politically more controversial structures of taxation.Less
While tax competition is widely regarded as a major fiscal constraint on the welfare state, in fact, very little is known about its real impact. How have advanced industrialized states reacted to the growing mobility of parts of their tax base? To what extent has tax competition resulted in a shift of burdens to less mobile tax bases? In answering these questions, the article identifies the different shape and force of tax competition in different areas of taxation, and the differing ways in which countries have responded. The conclusion is that the pressures of international tax competition are real, but so are countervailing economic and political pressures that work against a general ‘race to the bottom’ in the taxation of potentially mobile bases. At the same time, revenue‐preserving adjustment strategies have prevented large‐scale revenue losses at the price of creating politically more controversial structures of taxation.
STEVEN A. BANK
- Published in print:
- 2010
- Published Online:
- May 2010
- ISBN:
- 9780195326192
- eISBN:
- 9780199775811
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780195326192.003.008
- Subject:
- Law, Legal History
This chapter examines recent corporate tax reform activities and the future of corporate income tax. Topics covered include the dividend tax cut of 2003, the 2007 Treasury Conference and Rangel Bill, ...
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This chapter examines recent corporate tax reform activities and the future of corporate income tax. Topics covered include the dividend tax cut of 2003, the 2007 Treasury Conference and Rangel Bill, the corporate income tax and dividend policy, the trend away from corporations and toward alternative forms of business enterprises, and the globalization of corporate tax competition.Less
This chapter examines recent corporate tax reform activities and the future of corporate income tax. Topics covered include the dividend tax cut of 2003, the 2007 Treasury Conference and Rangel Bill, the corporate income tax and dividend policy, the trend away from corporations and toward alternative forms of business enterprises, and the globalization of corporate tax competition.
Fritz W. Scharpf and Vivien A. Schmidt (eds)
- Published in print:
- 2000
- Published Online:
- November 2003
- ISBN:
- 9780199240920
- eISBN:
- 9780191600180
- Item type:
- book
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/0199240922.001.0001
- Subject:
- Political Science, Comparative Politics
This is the second of a two‐volume study of the adjustment of advanced welfare states to international economic pressures, in which leading scholars detail the wide variety of responses in 12 ...
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This is the second of a two‐volume study of the adjustment of advanced welfare states to international economic pressures, in which leading scholars detail the wide variety of responses in 12 countries to the challenges to their employment and social policy systems in the period between the first oil‐price crises of the early 1970s and the increasing economic globalization of the 1980s and 1990s. Chapters in this volume provide in‐depth studies of countries’ adjustment experiences over three decades, beginning with a snapshot of the ‘golden age’ of the welfare state c.1970, then proceeding with a chronology of the successive external economic challenges and internal policy responses up until today, ending with a depiction of the new model or model in the making, and of what went right and what went wrong. The country studies include three welfare states representing the ‘Anglo‐Saxon’ model (the UK, Australia, and New Zealand), seven varieties of the ‘Continental’ welfare state (Switzerland, Austria, Belgium, and the Netherlands, Germany, France, and Italy), and two ‘Scandinavian’ welfare states (Sweden and Denmark). In addition, the volume includes analyses focusing on cross‐national differences in the labour‐market participation of women and of older workers, on the employment effects of service liberalization, and on international tax competition.Less
This is the second of a two‐volume study of the adjustment of advanced welfare states to international economic pressures, in which leading scholars detail the wide variety of responses in 12 countries to the challenges to their employment and social policy systems in the period between the first oil‐price crises of the early 1970s and the increasing economic globalization of the 1980s and 1990s. Chapters in this volume provide in‐depth studies of countries’ adjustment experiences over three decades, beginning with a snapshot of the ‘golden age’ of the welfare state c.1970, then proceeding with a chronology of the successive external economic challenges and internal policy responses up until today, ending with a depiction of the new model or model in the making, and of what went right and what went wrong. The country studies include three welfare states representing the ‘Anglo‐Saxon’ model (the UK, Australia, and New Zealand), seven varieties of the ‘Continental’ welfare state (Switzerland, Austria, Belgium, and the Netherlands, Germany, France, and Italy), and two ‘Scandinavian’ welfare states (Sweden and Denmark). In addition, the volume includes analyses focusing on cross‐national differences in the labour‐market participation of women and of older workers, on the employment effects of service liberalization, and on international tax competition.
Lukas Hakelberg
- Published in print:
- 2020
- Published Online:
- September 2020
- ISBN:
- 9781501748011
- eISBN:
- 9781501748035
- Item type:
- chapter
- Publisher:
- Cornell University Press
- DOI:
- 10.7591/cornell/9781501748011.003.0003
- Subject:
- Political Science, Public Policy
This chapter shows that the Clinton administration promoted an international campaign against underregulated financial centers. It did so because it was concerned about the impact of tax havens on ...
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This chapter shows that the Clinton administration promoted an international campaign against underregulated financial centers. It did so because it was concerned about the impact of tax havens on the perceived fairness of the US tax system, international financial stability, and the US sanctions regime. The Organisation for Economic Co-operation and Development (OECD), however, made the strategic mistake to tackle tax evasion by individuals and tax avoidance by multinationals in a single project, creating opposition from business associations in the United States and elsewhere. Instead of credibly linking noncompliance with OECD recommendations to economic sanctions, the Clinton administration thus accepted the severe dilution of the harmful tax competition initiative's anti-avoidance elements even before the Bush administration took office in 2001. A nested comparison of two unilateral tax initiatives moreover reveals that the Clinton administration generally failed to pass regulations curbing tax avoidance but succeeded in passing regulations against tax evasion.Less
This chapter shows that the Clinton administration promoted an international campaign against underregulated financial centers. It did so because it was concerned about the impact of tax havens on the perceived fairness of the US tax system, international financial stability, and the US sanctions regime. The Organisation for Economic Co-operation and Development (OECD), however, made the strategic mistake to tackle tax evasion by individuals and tax avoidance by multinationals in a single project, creating opposition from business associations in the United States and elsewhere. Instead of credibly linking noncompliance with OECD recommendations to economic sanctions, the Clinton administration thus accepted the severe dilution of the harmful tax competition initiative's anti-avoidance elements even before the Bush administration took office in 2001. A nested comparison of two unilateral tax initiatives moreover reveals that the Clinton administration generally failed to pass regulations curbing tax avoidance but succeeded in passing regulations against tax evasion.
Lukas Hakelberg
- Published in print:
- 2020
- Published Online:
- September 2020
- ISBN:
- 9781501748011
- eISBN:
- 9781501748035
- Item type:
- chapter
- Publisher:
- Cornell University Press
- DOI:
- 10.7591/cornell/9781501748011.003.0004
- Subject:
- Political Science, Public Policy
This chapter demonstrates that the Bush administration was critical of the Organisation for Economic Co-operation and Development's (OECD) harmful tax competition initiative from the outset of the ...
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This chapter demonstrates that the Bush administration was critical of the Organisation for Economic Co-operation and Development's (OECD) harmful tax competition initiative from the outset of the administration's first term and therefore had an open ear for the anti-OECD narrative proposed by libertarian advocacy groups. Despite recurrent exchanges between senior Bush appointees and these lobbyists, however, the US Treasury did not fully embrace their requests. Much to their chagrin, it merely removed the anti-tax avoidance elements from the project, while still providing nominal support to its anti-tax evasion measures. The Bush administration's policy was thus more in line with the position of US multinationals represented by the United States Council for International Business (USCIB) than with the fundamental libertarian critique of tax cooperation in general. The administration's ability to transform this position into actual OECD policy despite being isolated within the Group of Seven (G7) is testimony to US power in international bargaining over tax matters.Less
This chapter demonstrates that the Bush administration was critical of the Organisation for Economic Co-operation and Development's (OECD) harmful tax competition initiative from the outset of the administration's first term and therefore had an open ear for the anti-OECD narrative proposed by libertarian advocacy groups. Despite recurrent exchanges between senior Bush appointees and these lobbyists, however, the US Treasury did not fully embrace their requests. Much to their chagrin, it merely removed the anti-tax avoidance elements from the project, while still providing nominal support to its anti-tax evasion measures. The Bush administration's policy was thus more in line with the position of US multinationals represented by the United States Council for International Business (USCIB) than with the fundamental libertarian critique of tax cooperation in general. The administration's ability to transform this position into actual OECD policy despite being isolated within the Group of Seven (G7) is testimony to US power in international bargaining over tax matters.
Nicholas Shaxson and John Christensen
- Published in print:
- 2016
- Published Online:
- March 2016
- ISBN:
- 9780198725343
- eISBN:
- 9780191792687
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780198725343.003.0013
- Subject:
- Economics and Finance, International, Macro- and Monetary Economics
This chapter addresses the promotion by many politicians around the world of so-called “tax competitiveness.” It proposes that this ideologically driven phenomenon is reframed as “tax wars” and ...
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This chapter addresses the promotion by many politicians around the world of so-called “tax competitiveness.” It proposes that this ideologically driven phenomenon is reframed as “tax wars” and suggests a set of recommendations for how developing countries can respond to such economic warfare. It also argues for the creation of a think tank whose mission would be to counteract tax competition as an ideology, that is, as a belief system that falsely promotes tax competition as a demand of economic realities. The world understands now that offering tax incentives to tempt investment, hot money, and individual wealth shrinks the tax base, distorts markets, and results in a “race to the bottom” in which nobody (except for the very richest people) wins. The chapter makes a compelling case for ending the race to the bottom since it harms sustainable development while also undermining democratic governments and diminishing human rights.Less
This chapter addresses the promotion by many politicians around the world of so-called “tax competitiveness.” It proposes that this ideologically driven phenomenon is reframed as “tax wars” and suggests a set of recommendations for how developing countries can respond to such economic warfare. It also argues for the creation of a think tank whose mission would be to counteract tax competition as an ideology, that is, as a belief system that falsely promotes tax competition as a demand of economic realities. The world understands now that offering tax incentives to tempt investment, hot money, and individual wealth shrinks the tax base, distorts markets, and results in a “race to the bottom” in which nobody (except for the very richest people) wins. The chapter makes a compelling case for ending the race to the bottom since it harms sustainable development while also undermining democratic governments and diminishing human rights.
Francesco de Cecco
- Published in print:
- 2012
- Published Online:
- September 2012
- ISBN:
- 9780199695706
- eISBN:
- 9780191741302
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199695706.003.0012
- Subject:
- Law, EU Law
This chapter considers whether, under which conditions, tax measures that have a regional (sub-national) scope should be treated as State aid and assesses the constitutional implications of this ...
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This chapter considers whether, under which conditions, tax measures that have a regional (sub-national) scope should be treated as State aid and assesses the constitutional implications of this question. Clearly, the regional scope of a measure cannot automatically lead to the conclusion that there is a State aid; to do so would lead to suppressing a crucial aspect of regional autonomy, in contravention to the EU Treaty's renewed commitment to national constitutional identity and regional autonomy enshrined in Article 4(2) TEU. At the same time, however, the standard approach to the definition of State aid, and EU law orthodoxy, would imply the irrelevance of internal constitutional arrangements. While this chapter finds the Court's approach to be consistent with the view that internal market law should not undermine national constitutional identity, it also argues that this solution has important consequences as far as the relationship between State aid, on the one hand, and tax (and regulatory) competition, on the other, is concerned.Less
This chapter considers whether, under which conditions, tax measures that have a regional (sub-national) scope should be treated as State aid and assesses the constitutional implications of this question. Clearly, the regional scope of a measure cannot automatically lead to the conclusion that there is a State aid; to do so would lead to suppressing a crucial aspect of regional autonomy, in contravention to the EU Treaty's renewed commitment to national constitutional identity and regional autonomy enshrined in Article 4(2) TEU. At the same time, however, the standard approach to the definition of State aid, and EU law orthodoxy, would imply the irrelevance of internal constitutional arrangements. While this chapter finds the Court's approach to be consistent with the view that internal market law should not undermine national constitutional identity, it also argues that this solution has important consequences as far as the relationship between State aid, on the one hand, and tax (and regulatory) competition, on the other, is concerned.
Peter Dietsch
- Published in print:
- 2015
- Published Online:
- August 2015
- ISBN:
- 9780190251512
- eISBN:
- 9780190251543
- Item type:
- book
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780190251512.001.0001
- Subject:
- Philosophy, Political Philosophy, Moral Philosophy
When individuals stash away their wealth in offshore bank accounts and multinational corporations shift their profits or their actual production to low-tax jurisdictions, this undermines the fiscal ...
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When individuals stash away their wealth in offshore bank accounts and multinational corporations shift their profits or their actual production to low-tax jurisdictions, this undermines the fiscal autonomy of political communities and contributes to rising inequalities in income and wealth. These practices are fuelled by tax competition, with countries strategically designing fiscal policy to attract capital from abroad. Building on a careful analysis of the ethical challenges raised by a world of tax competition, the book puts forward a normative and institutional framework to regulate the practice. In short, individuals and corporations should pay tax in the jurisdictions of which they are members, where this membership can come in degrees. Moreover, the strategic tax setting of states should be limited in important ways. An international tax organization (ITO) should be created to enforce the principles of tax justice. The book defends this call for reform against two important objections. First, it refutes the suggestion that regulating tax competition will harm economic efficiency. Second, the book argues that regulation of this sort, rather than representing a constraint on national sovereignty, in fact turns out to be a requirement of sovereignty in a global economy. The book closes with a series of reflections on the obligations that the beneficiaries of tax competition have towards the losers both prior to any institutional reform and in its aftermath.Less
When individuals stash away their wealth in offshore bank accounts and multinational corporations shift their profits or their actual production to low-tax jurisdictions, this undermines the fiscal autonomy of political communities and contributes to rising inequalities in income and wealth. These practices are fuelled by tax competition, with countries strategically designing fiscal policy to attract capital from abroad. Building on a careful analysis of the ethical challenges raised by a world of tax competition, the book puts forward a normative and institutional framework to regulate the practice. In short, individuals and corporations should pay tax in the jurisdictions of which they are members, where this membership can come in degrees. Moreover, the strategic tax setting of states should be limited in important ways. An international tax organization (ITO) should be created to enforce the principles of tax justice. The book defends this call for reform against two important objections. First, it refutes the suggestion that regulating tax competition will harm economic efficiency. Second, the book argues that regulation of this sort, rather than representing a constraint on national sovereignty, in fact turns out to be a requirement of sovereignty in a global economy. The book closes with a series of reflections on the obligations that the beneficiaries of tax competition have towards the losers both prior to any institutional reform and in its aftermath.
Peter Dietsch
- Published in print:
- 2015
- Published Online:
- August 2015
- ISBN:
- 9780190251512
- eISBN:
- 9780190251543
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780190251512.003.0002
- Subject:
- Philosophy, Political Philosophy, Moral Philosophy
The chapter establishes the concept of fiscal autonomy as the normative criterion the book will use to evaluate tax competition. After presenting a taxonomy of the various kinds of tax competition ...
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The chapter establishes the concept of fiscal autonomy as the normative criterion the book will use to evaluate tax competition. After presenting a taxonomy of the various kinds of tax competition and a discussion of examples to illustrate them, the author shows that tax competition harms fiscal autonomy. More specifically, it undermines the choices political communities make with respect to the size of the state and the level of redistribution. In addition, tax competition tends to exacerbate income inequalities both within countries and internationally. The chapter closes with a discussion of the incentives different types of states face in a world of tax competition.Less
The chapter establishes the concept of fiscal autonomy as the normative criterion the book will use to evaluate tax competition. After presenting a taxonomy of the various kinds of tax competition and a discussion of examples to illustrate them, the author shows that tax competition harms fiscal autonomy. More specifically, it undermines the choices political communities make with respect to the size of the state and the level of redistribution. In addition, tax competition tends to exacerbate income inequalities both within countries and internationally. The chapter closes with a discussion of the incentives different types of states face in a world of tax competition.
M. Govinda Rao and Nirvikar Singh
- Published in print:
- 2006
- Published Online:
- October 2012
- ISBN:
- 9780195686937
- eISBN:
- 9780199080571
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780195686937.003.0007
- Subject:
- Economics and Finance, Development, Growth, and Environmental
This chapter examines the problem of overlapping jurisdictions of governmental units in a federal system of government. It explains that fiscal overlapping can occur due to concurrent assignments, ...
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This chapter examines the problem of overlapping jurisdictions of governmental units in a federal system of government. It explains that fiscal overlapping can occur due to concurrent assignments, interdependence of fiscal revenue bases and expenditure functions, and competition among hierarchically ordered governmental layers and jurisdictions within each layer. Fiscal overlapping can occur both in tax and expenditure functions. This chapter also discusses major issues concerning vertical fiscal disharmony, inter-jurisdictional tax competition and allocative efficiency, and taxation of interstate trade.Less
This chapter examines the problem of overlapping jurisdictions of governmental units in a federal system of government. It explains that fiscal overlapping can occur due to concurrent assignments, interdependence of fiscal revenue bases and expenditure functions, and competition among hierarchically ordered governmental layers and jurisdictions within each layer. Fiscal overlapping can occur both in tax and expenditure functions. This chapter also discusses major issues concerning vertical fiscal disharmony, inter-jurisdictional tax competition and allocative efficiency, and taxation of interstate trade.
Peter Dietsch
- Published in print:
- 2015
- Published Online:
- August 2015
- ISBN:
- 9780190251512
- eISBN:
- 9780190251543
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780190251512.003.0004
- Subject:
- Philosophy, Political Philosophy, Moral Philosophy
The concept of efficiency is used in different ways in economics. First, the practical relevance of models that conclude that tax competition is either Pareto optimal or not is limited, because we do ...
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The concept of efficiency is used in different ways in economics. First, the practical relevance of models that conclude that tax competition is either Pareto optimal or not is limited, because we do not live in the idealized circumstances of the Pareto frontier. Second, the more relevant criterion of Pareto improvement is silent on the prospect of regulating tax competition because, as previous chapters have shown, the latter has redistributive effects. Third, efficiency as an instrumental value to arbitrate trade-offs between two or more policy goals—a role it plays in optimal tax theory, for example—can in fact be used to show that regulating tax competition is a requirement of efficiency rather than an obstacle to it.Less
The concept of efficiency is used in different ways in economics. First, the practical relevance of models that conclude that tax competition is either Pareto optimal or not is limited, because we do not live in the idealized circumstances of the Pareto frontier. Second, the more relevant criterion of Pareto improvement is silent on the prospect of regulating tax competition because, as previous chapters have shown, the latter has redistributive effects. Third, efficiency as an instrumental value to arbitrate trade-offs between two or more policy goals—a role it plays in optimal tax theory, for example—can in fact be used to show that regulating tax competition is a requirement of efficiency rather than an obstacle to it.
Harry Grubert
- Published in print:
- 2001
- Published Online:
- February 2013
- ISBN:
- 9780226341736
- eISBN:
- 9780226341750
- Item type:
- chapter
- Publisher:
- University of Chicago Press
- DOI:
- 10.7208/chicago/9780226341750.003.0006
- Subject:
- Economics and Finance, International
Many claims have been made in recent years, both by the popular media and by prominent economists, that we are living in a period of more aggressive tax planning by multinational corporations (MNCs) ...
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Many claims have been made in recent years, both by the popular media and by prominent economists, that we are living in a period of more aggressive tax planning by multinational corporations (MNCs) and more intense tax competition by governments. This chapter examines and analyzes changes in average effective tax rates in sixty countries to determine the responses of governments to the new global environment. It looks at various areas of MNC and government behavior, including the effective tax rates that MNCs pay to host governments. After reviewing the incentives for tax planning by MNCs from the United States and how these may have changed as a result of the Tax Reform Act of 1986, the chapter compares income-shifting behavior in 1984 and 1992 to see if the reported profitability of controlled foreign corporations (CFCs) has become more sensitive to local tax rates. Finally, it examines the relationship between excess credit expectations and the change in royalties received by the parent and reviews CFC rules that eliminate the benefits of using tax havens.Less
Many claims have been made in recent years, both by the popular media and by prominent economists, that we are living in a period of more aggressive tax planning by multinational corporations (MNCs) and more intense tax competition by governments. This chapter examines and analyzes changes in average effective tax rates in sixty countries to determine the responses of governments to the new global environment. It looks at various areas of MNC and government behavior, including the effective tax rates that MNCs pay to host governments. After reviewing the incentives for tax planning by MNCs from the United States and how these may have changed as a result of the Tax Reform Act of 1986, the chapter compares income-shifting behavior in 1984 and 1992 to see if the reported profitability of controlled foreign corporations (CFCs) has become more sensitive to local tax rates. Finally, it examines the relationship between excess credit expectations and the change in royalties received by the parent and reviews CFC rules that eliminate the benefits of using tax havens.
Peter Dietsch
- Published in print:
- 2015
- Published Online:
- August 2015
- ISBN:
- 9780190251512
- eISBN:
- 9780190251543
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780190251512.003.0001
- Subject:
- Philosophy, Political Philosophy, Moral Philosophy
The introduction gives an overview of the phenomenon of tax competition, as well as the ethical issues it raises. It situates the topic in an interdisciplinary theoretical context. Finally, after ...
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The introduction gives an overview of the phenomenon of tax competition, as well as the ethical issues it raises. It situates the topic in an interdisciplinary theoretical context. Finally, after commenting on the link between tax competition and the financial crisis, the introduction provides an outline of the argument of the book.Less
The introduction gives an overview of the phenomenon of tax competition, as well as the ethical issues it raises. It situates the topic in an interdisciplinary theoretical context. Finally, after commenting on the link between tax competition and the financial crisis, the introduction provides an outline of the argument of the book.
Michael P. Devereux, Alan J. Auerbach, Michael Keen, Paul Oosterhuis, Wolfgang Schön, and John Vella
- Published in print:
- 2021
- Published Online:
- March 2021
- ISBN:
- 9780198808060
- eISBN:
- 9780191845826
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/oso/9780198808060.003.0001
- Subject:
- Law, Company and Commercial Law
The key problems confronting the international tax system are introduced in this chapter—including problems of tax avoidance through shifting profit to low tax countries, distortions to international ...
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The key problems confronting the international tax system are introduced in this chapter—including problems of tax avoidance through shifting profit to low tax countries, distortions to international investment and trade created by the existing system, and two different forms of competition between countries. The main ideas of the book are introduced, including the approach of the book which addresses the issue of designing an international tax system on business profit from first principles. It explains the key direction of reform—moving to allocating tax rights to the country in which businesses sell their goods and services.Less
The key problems confronting the international tax system are introduced in this chapter—including problems of tax avoidance through shifting profit to low tax countries, distortions to international investment and trade created by the existing system, and two different forms of competition between countries. The main ideas of the book are introduced, including the approach of the book which addresses the issue of designing an international tax system on business profit from first principles. It explains the key direction of reform—moving to allocating tax rights to the country in which businesses sell their goods and services.
Patricia Hofmann and Nadine Riedel
- Published in print:
- 2021
- Published Online:
- January 2022
- ISBN:
- 9780192855244
- eISBN:
- 9780191945373
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/oso/9780192855244.003.0007
- Subject:
- Economics and Finance, Financial Economics
A review of corporate tax policy in the Netherlands is provided, focusing in particular on international aspects and corporate tax competition. Empirical evidence shows that corporate tax policy is ...
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A review of corporate tax policy in the Netherlands is provided, focusing in particular on international aspects and corporate tax competition. Empirical evidence shows that corporate tax policy is important and that it determines the international location of investment and profits of multinational enterprises (MNEs). In terms of tax policy instruments, especially low statutory corporate tax rates—more than narrow tax base definitions—attract internationally mobile business and profits. In addition, ‘smart tax competition’ elements of the Dutch tax system, such as the ‘innovation box’ and generous research and development (R&D) tax credits, help to attract R&D investments that may exert positive spill-over effects on the local economy. Recent tightening of anti-profit-shifting provisions through the European Union’s Anti-Tax Avoidance Directive (ATAD) and the OECD’s Base Erosion and Profit Shifting (BEPS) have not eliminated the incentives to engage in corporate tax competition, and the associated detrimental welfare effects, in consequence, prevail. If appropriately designed, further corporate tax policy coordination will likely be beneficial from a global and a Dutch perspective.Less
A review of corporate tax policy in the Netherlands is provided, focusing in particular on international aspects and corporate tax competition. Empirical evidence shows that corporate tax policy is important and that it determines the international location of investment and profits of multinational enterprises (MNEs). In terms of tax policy instruments, especially low statutory corporate tax rates—more than narrow tax base definitions—attract internationally mobile business and profits. In addition, ‘smart tax competition’ elements of the Dutch tax system, such as the ‘innovation box’ and generous research and development (R&D) tax credits, help to attract R&D investments that may exert positive spill-over effects on the local economy. Recent tightening of anti-profit-shifting provisions through the European Union’s Anti-Tax Avoidance Directive (ATAD) and the OECD’s Base Erosion and Profit Shifting (BEPS) have not eliminated the incentives to engage in corporate tax competition, and the associated detrimental welfare effects, in consequence, prevail. If appropriately designed, further corporate tax policy coordination will likely be beneficial from a global and a Dutch perspective.
Peter Dietsch
- Published in print:
- 2018
- Published Online:
- December 2018
- ISBN:
- 9780199609222
- eISBN:
- 9780191862878
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/oso/9780199609222.003.0012
- Subject:
- Philosophy, Political Philosophy, Moral Philosophy
Governments increasingly use their fiscal policy to attract mobile capital from abroad. This tax competition puts a strain on the international fiscal system by undermining the capacity of states to ...
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Governments increasingly use their fiscal policy to attract mobile capital from abroad. This tax competition puts a strain on the international fiscal system by undermining the capacity of states to make autonomous fiscal choices and by exacerbating inequalities. The existing regulatory framework is not able to address these challenges. Yet, what considerations should guide our efforts for reform? This chapter argues that a first necessary step consists in understanding the principles that justify the state as the principal locus of fiscal control in the first place. Building on an account of the legitimacy of the state and its fiscal powers, the chapter shows how tax competition is in tension with the principal objectives this account assigns to the state. It then outlines a normative response to tax competition that relies on both reforming jurisdictional rules and redistribution between states.Less
Governments increasingly use their fiscal policy to attract mobile capital from abroad. This tax competition puts a strain on the international fiscal system by undermining the capacity of states to make autonomous fiscal choices and by exacerbating inequalities. The existing regulatory framework is not able to address these challenges. Yet, what considerations should guide our efforts for reform? This chapter argues that a first necessary step consists in understanding the principles that justify the state as the principal locus of fiscal control in the first place. Building on an account of the legitimacy of the state and its fiscal powers, the chapter shows how tax competition is in tension with the principal objectives this account assigns to the state. It then outlines a normative response to tax competition that relies on both reforming jurisdictional rules and redistribution between states.
Allison Christians and Laurens van Apeldoorn
- Published in print:
- 2021
- Published Online:
- January 2022
- ISBN:
- 9780192848673
- eISBN:
- 9780191943928
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/oso/9780192848673.003.0003
- Subject:
- Law, Comparative Law
This chapter offers two explanations for the following disconnect: the first chapter established that source states may have to tax away some of the investment returns earned within their territories ...
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This chapter offers two explanations for the following disconnect: the first chapter established that source states may have to tax away some of the investment returns earned within their territories in order to receive an equal share of the benefits of cooperation on international capital mobility. One might therefore expect most source states to routinely impose taxes to the fullest extent on all returns to capital that they can plausibly link to their jurisdictions, at least within the bounds of accepted norms. In fact, the opposite is true: many states do not appropriate a share of the cooperative surplus of international capital mobility through source-based taxation, even—perhaps especially—when they keenly rely on inbound capital investment for economic development. In the previous chapter we suggested that this likely means that these states do not receive a fair share of the benefits of tax cooperation. This chapter offers two explanations, namely tax competition and peer pressure to conform to international tax norms, both through treaties and soft law. It examines why and how these factors impede the capacity of source states to tax cross-border income. It also reviews some of the reforms currently under consideration in multilateral fora, now that a confluence of factors has resulted in a willingness even among the most affluent states to consider modifications to traditional principles and norms of tax cooperation.Less
This chapter offers two explanations for the following disconnect: the first chapter established that source states may have to tax away some of the investment returns earned within their territories in order to receive an equal share of the benefits of cooperation on international capital mobility. One might therefore expect most source states to routinely impose taxes to the fullest extent on all returns to capital that they can plausibly link to their jurisdictions, at least within the bounds of accepted norms. In fact, the opposite is true: many states do not appropriate a share of the cooperative surplus of international capital mobility through source-based taxation, even—perhaps especially—when they keenly rely on inbound capital investment for economic development. In the previous chapter we suggested that this likely means that these states do not receive a fair share of the benefits of tax cooperation. This chapter offers two explanations, namely tax competition and peer pressure to conform to international tax norms, both through treaties and soft law. It examines why and how these factors impede the capacity of source states to tax cross-border income. It also reviews some of the reforms currently under consideration in multilateral fora, now that a confluence of factors has resulted in a willingness even among the most affluent states to consider modifications to traditional principles and norms of tax cooperation.
Tsilly Dagan
- Published in print:
- 2018
- Published Online:
- July 2018
- ISBN:
- 9780198825210
- eISBN:
- 9780191863844
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/oso/9780198825210.003.0017
- Subject:
- Law, Public International Law
This chapter describes the multilateral efforts regarding four key concerns of the international community: Prevention of double taxation, fighting “harmful tax competition,” sharing of information, ...
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This chapter describes the multilateral efforts regarding four key concerns of the international community: Prevention of double taxation, fighting “harmful tax competition,” sharing of information, and the “gaps and frictions” between the tax systems of various countries noted by the recent BEPS report. It then asks what, in fact, constitutes the community’s interest in the international tax area, arguing that where tax policy is concerned, there is no clear “textbook answer” regarding the best way to tax internationally. The chapter criticizes two proxies which are often implicitly endorsed in order to evaluate international tax policy: Cooperation among states, and the prevention of market failures. It argues that cooperation, contrary to conventional wisdom, is neither a goal in itself nor is it a good enough proxy for the collective good, and that the elimination of market failures, although indisputably beneficial, may raise a second-best problem.Less
This chapter describes the multilateral efforts regarding four key concerns of the international community: Prevention of double taxation, fighting “harmful tax competition,” sharing of information, and the “gaps and frictions” between the tax systems of various countries noted by the recent BEPS report. It then asks what, in fact, constitutes the community’s interest in the international tax area, arguing that where tax policy is concerned, there is no clear “textbook answer” regarding the best way to tax internationally. The chapter criticizes two proxies which are often implicitly endorsed in order to evaluate international tax policy: Cooperation among states, and the prevention of market failures. It argues that cooperation, contrary to conventional wisdom, is neither a goal in itself nor is it a good enough proxy for the collective good, and that the elimination of market failures, although indisputably beneficial, may raise a second-best problem.
Johanna Stark
- Published in print:
- 2019
- Published Online:
- April 2019
- ISBN:
- 9780198839491
- eISBN:
- 9780191875441
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/oso/9780198839491.003.0002
- Subject:
- Law, Philosophy of Law
This chapter introduces regulatory competition as a conceptual framework and factual phenomenon. It discusses the structural preconditions of a ‘law market’, including state suppliers’ incentives to ...
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This chapter introduces regulatory competition as a conceptual framework and factual phenomenon. It discusses the structural preconditions of a ‘law market’, including state suppliers’ incentives to compete at all. It closes with a glance at a number of areas in which competitive dynamics among legislators can be found to operate. Law markets have emerged in a growing number of fields, most prominently in the ‘charter competition’ between US states for being chosen as a place of incorporation, with Delaware being the market leader. Another example that has been under intense academic scrutiny is tax competition: states compete for tax revenue and try to offer ‘tax products’ that appeal to mobile individuals and corporations. Further examples discussed in this chapter are drawn from contract, labour, and insolvency law, as well as dispute resolution.Less
This chapter introduces regulatory competition as a conceptual framework and factual phenomenon. It discusses the structural preconditions of a ‘law market’, including state suppliers’ incentives to compete at all. It closes with a glance at a number of areas in which competitive dynamics among legislators can be found to operate. Law markets have emerged in a growing number of fields, most prominently in the ‘charter competition’ between US states for being chosen as a place of incorporation, with Delaware being the market leader. Another example that has been under intense academic scrutiny is tax competition: states compete for tax revenue and try to offer ‘tax products’ that appeal to mobile individuals and corporations. Further examples discussed in this chapter are drawn from contract, labour, and insolvency law, as well as dispute resolution.
Peter Dietsch
- Published in print:
- 2015
- Published Online:
- August 2015
- ISBN:
- 9780190251512
- eISBN:
- 9780190251543
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780190251512.003.0007
- Subject:
- Philosophy, Political Philosophy, Moral Philosophy
Instead of summarizing, the conclusion highlights five central insights of the book. First, while the author argues for an effective right of states to tax capital, his argument abstains from ...
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Instead of summarizing, the conclusion highlights five central insights of the book. First, while the author argues for an effective right of states to tax capital, his argument abstains from recommending any particular rate of capital taxation. Second, the ethics of tax competition defended in the book emphasizes the importance of just institutions rather than appealing to the motivations of individual persons or corporations. Third, parallel to the fiscal context discussed here, the economic interdependence between states arguably creates forms of normative interdependence in other policy fields such as monetary or trade policy. Fourth, of the principles of global tax justice defended in the book, the fiscal policy constraint is likely to be more controversial than the membership principle. Finally, regulating tax competition is not only a requirement of justice but also a matter of sound economic policy.Less
Instead of summarizing, the conclusion highlights five central insights of the book. First, while the author argues for an effective right of states to tax capital, his argument abstains from recommending any particular rate of capital taxation. Second, the ethics of tax competition defended in the book emphasizes the importance of just institutions rather than appealing to the motivations of individual persons or corporations. Third, parallel to the fiscal context discussed here, the economic interdependence between states arguably creates forms of normative interdependence in other policy fields such as monetary or trade policy. Fourth, of the principles of global tax justice defended in the book, the fiscal policy constraint is likely to be more controversial than the membership principle. Finally, regulating tax competition is not only a requirement of justice but also a matter of sound economic policy.