Paul L. Caron
Dean



Wednesday, December 14, 2016

Oxfam:  The Dangerous Race To The Corporate Tax Bottom

OxfamOxfam, Tax Battles: The Dangerous Race to the Bottom on Corporate Tax (summary) (methodology):

Collecting tax is one of the key means by which governments are able to address poverty and inequality. But big business is dodging tax on an industrial scale, depriving governments across the globe of the money they need to address poverty and invest in healthcare, education and jobs. This report exposes the world’s worst corporate tax havens — extreme examples of a destructive race to the bottom on corporate tax which has seen governments across the globe slash corporate tax bills in an attempt to attract business. It calls on governments to work together to put a stop to this before it is too late.

Table 1

(Hat Tip: Mike Talbert.)

https://taxprof.typepad.com/taxprof_blog/2016/12/oxfamthe-dangerous-race-to-the-corporate-tax-bottom.html

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Comments

Where, in the US Constitution, does it state that the role of government is to address poverty and inequality? Certainly, there exists a filicific calculus that reasonable opportunity and access to capital is healthy; but, when did we decide that society was to "level" its populace except "under law?"

Posted by: Tom N. | Dec 14, 2016 4:10:20 PM

Tom N. you certainly are not a charitable person nor very religious.....see that eye of the needle....you won't make through. It would be to our benefit as a country to educate our populace so as to benefit the country as a whole which just involve helping people along the way.

Posted by: Sid | Dec 14, 2016 9:13:48 PM

Congress is trying to get the U.S. on this list, but in order to support our militart spending they will enact a very regressive VAT to put the burden on those with less property even though they think the primary function of the federal government is to protect the property of the wealthy.

Posted by: Sterling | Dec 15, 2016 6:31:36 AM

Tom N.: In the preamble two of the six purposes of the Constitution are to "establish Justice . . . and . . . to promote the general Welfare." We might reasonably disagree what the elements of justice and welfare are, but those purposes are clearly stated.

Posted by: Publius Novus | Dec 15, 2016 4:21:10 PM

Publius, glib as always and lacking anything factual, is referring to the General Welfare Clause in Article I, though the term "general welfare" is nowhere defined in the Constitution, except that it was not synonymous with "common defense". Congress only has the enumerated power to tax and spend, not an obligation to do so for unspecified reasons.

From 1790 to 1936, total federal government spending represented on average 2-4% of GDP. From 1936 to the present, total federal government spending averaged approximately 20% of GDP. And if current spending trends are not addressed, that will rise to 30% by 2050. Obviously, providing for the general welfare is far from cheap and light years beyond what the founders who drafted the Constitution ever contemplated. Just looking at social spending, which includes domestic government spending plus private sector health care and non-profit spending, the U.S. ranks #2 in the world behind France. Clearly, we're not getting the same bang for our buck as Europe does, even though the U.S. spends quite a bit more.

Since you suggest there is reasonable disagreement on this issue, I'll pose this simple question, Pubs: How much does the public sector (federal, state, local) spend annually on all means-tested welfare programs? If you're knowledgeable about such things and open to debate, that should be an easy one...

Posted by: MM | Dec 15, 2016 9:22:02 PM

While I agree with Tom (and I don't care if you call me a meanie), everyone is missing the point of this article; namely, we are in a race to the bottom. I believe the PM of England just said nobody is going to beat the UK when it comes to having the lowest tax rates.

Meanwhile all our trading partners are tanking their currencies while the dollar continues to rise. This of course will hit those bad US corporations who export goods and services.

Bottom line? The US corporate tax rate is coming down. The Obama administration said 25% in its last study. I wouldn't be too surprised to see Trump get his 15%, and like the 28% in the '86 Act, this will rock everybody's world. I was doing real-estate deals in 1986. It was amazing how fast the market turned. You just couldn't make the numbers work at 28%. I predict the same will happen for C Corps.

Posted by: Dale Spradling | Dec 16, 2016 7:17:23 AM

Nothing, huh Pubs? No taste for discussion, despite paying lip service to reasonable disagreement. I have to say, considering your record on answering simple questions and general frankness, you've been batting less than a hundred all year.

Oh well, happy holidays anyway...

Posted by: MM | Dec 18, 2016 5:53:54 PM