In this new brief just published by the Sheffield Political Economics Research Institute authors John Mikler and Ainsley Elbra address the issue of global corporate tax avoidance and consider how multinational corporations can be made to pay their fair share of tax.
2016 was the year when the world underwent profound political change. Most notably there were a series of political earthquakes in the US and Europe, with the election of Donald Trump and the decision of the UK to exit the European Union.
Going into 2017 these changes look likely to have a deep and lasting impact on tax policy and the distribution of wealth.
In July we wrote a blog entitled Luxembourg backing down on supporting tax haven USA. Now it’s Switzerland’s turn.
This concerns the OECD’s Common Reporting Standard (CRS,) a global scheme to share banking information. The United States isn’t a participating jurisdiction: it has its own FATCA project, which as we’ve remarked before, is good at ferreting out US taxpayers overseas, but provides relative little information in the other direction to help other countries enforce their own tax laws. Making the United States a giant tax and secrecy haven.
From Americans for Tax Fairness, a major new report about corporate taxes in the United States. It’s called Corporate Tax Chartbook: How Corporations Rig the Rules to Dodge the Taxes They Owe, and it contains many useful facts, such as this:
- Corporate profits are way up, and corporate taxes are way down. In 1952, corporate profits were 5.5 percent of the economy, and corporate taxes were 5.9 percent. Today, corporate profits are 8.5 percent of the economy, and corporate taxes are just 1.9 percent of GDP.
Updated with further information about Brazil’s decision – see below.
From the Financial Times:
More precisely, a group of 185 American CEOs has sent letters, co-ordinated by the Business Roundtable lobby group, to the leaders of 28 EU member states to try and get the European Commission to row back from claiming €13bn in underpaid taxes from Apple. They call the attempt a “grievous self-inflicted wound”.