Thursday, April 09, 2015

The tax race to the bottom

Countries slow race to bottom on tax competition -

With the Senate asking questions about how the multinationals shift money around to minimise tax, the whole question of whether international tax competition is an ultimately harmful "race to the bottom" that countries ought to stop is of greater interest than ever.

The article above (which you may have to answer a question to get to) seems a decent summary of the controversy regarding the matter.   (Of course, seeing libertarians are of the view that tax competition is fine and dandy, I think its a very reasonable conclusion that of course tax competition has become harmful, and that it can all be fixed by war being declared on Ireland, Bermuda, Singapore and any other country that is getting rich by enabling companies to impoverish the rest of the world.)

In other tax musings, I see that many are talking about the advantages of increasing land tax for revenue, and reducing stamp duty and other taxes.

While Jessica Irvine did a good job the other day explaining the advantages, transitioning to such a system would surely be complicated, and the idea that people having attained the "Australian dream" of home ownership with no mortgage now having to pay for the privilege is surely a hard, hard sell politically.

How much easier from a fairness point of view is it to say that companies have to pay local tax in the country where they generate the profit?   Of course, achieving that result with international co-operation is the trick.  I think my warfare plan, as well as rounding up the libertarians as enemies of the State to be interned until the cessation of hostilities, might have trouble being endorsed by politicians:  although I may be in with a chance with the Greens.

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