At least, the IMF’s latest edition of Finance & Development is focused on the “hidden corners of the global economy” – which naturally involves tax havens. It carries a feature by TJN contributor Nicholas Shaxson (author of Treasure Islands and the more recent The Finance Curse,) entitled Tackling Tax Havens.
Here’s (maybe) the most arresting sentence, in case you didn’t know this:
We are now at the start of the most significant period of change to the international corporate tax system in a century
But the core argument of the article is in the subtitle:
The billions attracted by tax havens do harm to sending and receiving nations alike.
That is the Finance Curse analysis, co-developed over many years by your humble correspondent today, in partnership with TJN’s John Christensen. This analysis potentially changes everything in terms of the political dynamics of the debate. As the article explains:
It seems that for many economies, hosting an offshore financial center is a lose-lose proposition: it not only transmits harm outward to other countries, but inward, to the host.
Countries that recognize this danger can act unilaterally to rein in their offshore financial centers, simply stepping out of the race to the bottom and curbing tax haven activity while also improving their own citizens’ well-being.
This is a powerful, winning formula. Crack down, and there’s no loss of anything you might call “international competitiveness.” International collaboration and co-operation help, but you don’t need to wait for this before acting.
We can act against tax havens immediately. Indeed, we must.