Thomas Rixen

Freie Universität Berlin | FUB · Otto-Suhr-Institute for Political Science

Commercial banks such as UBS and HSBC embroiled in scandals that in some cases exposed lawmakers themselves as tax evaders, multinationals such as Google and Apple using the Double Irish and other tax avoidance strategies, governments granting fiscal sweetheart deals behind closed doors as in Luxembourg - the stream of news items documenting the cr...

A crucial element in the complex chain of factors that caused the recent financial crisis was the lack of regulation and oversight in the shadow banking sector, which is largely incorporated in offshore financial centers (OFCs), but instead of swift and radical regulatory reform in that sector after the crisis, we observe only incremental and ineff...

Stalled progress on explaining institutional change is, in part, the result of two conceptual challenges that hinder effective theory building: concept stretching and concept proliferation. These problems affect a hallmark concept of institutional change, path dependence, whose usefulness has been curtailed by the variety of meanings attributed to...

The transnational legal order (TLO) of international taxation consists of a body of multilateral, bilateral, and unilateral hard and soft laws regulating the tax treatment of cross-border economic activities, especially investment activities. The chapter reconstructs the dynamics of change of this TLO since its creation in the 1920s. Taking a diach...

Covering the period from the 1920s, when international tax policy was solely about avoiding double taxation, to the present era of international tax competition, Rixen investigates the fate of 'the power to tax' in an era of globalization, illustrating that tax sovereignty is both shaped and constrained by an international tax regime. http://paper...

This article makes four claims: First, tax systems at the national, regional and global level are regulatory systems. They can and should be studied as that. Second, taxation is an important extension to regulatory scholars’ empirical field of inquiry. It is a hard case to test prominent theories of new, softer modes of governance. Third, in the er...

Financial transparency, financial secrecy, tax competition, international cooperation, capital flight, exchange of information, tax evasion, tax avoidance, OECD, BEPS

This chapter addresses the causes and consequences of automatic cross-border exchange of taxpayer information (AEI). First, we argue that the introduction of AEI was enabled by the willingness of the United States to exert its superior economic power. Second, we find that AEI leads to shifts of international investment out of tax havens, while at t...

The multilateral adoption of the automatic exchange of information (AEI) on bank accounts held by nonresidents was a breakthrough in the fight against cross-border tax evasion, which led to a substantial reduction in the value of bank deposits and investment portfolios in traditional tax havens. However, there is suspicion that sophisticated tax ev...

The downward trend in capital taxes since the 1980s has recently reversed for personal capital income. At the same time, it continued for corporate profits. Why have these tax rates di-verged after a long period of parallel decline? We argue that the answer lies in different levels of change in the fights against tax evasion and tax avoidance. The...

The downward trend in capital taxes since the 1980s has recently reversed for personal capital income. At the same time, it continued for corporate profits. Why have these tax rates diverged after a long period of parallel decline? We argue that the answer lies in different levels of change in the fights against tax evasion and tax avoidance. The f...

Postprint. Please cite as: Leibrecht, Markus and Thomas Rixen (2010) Double Tax Avoidance and Tax Competition for Mobile Capital, in: Martin Zagler (Ed.): International Tax Coordination. An Interdisciplinary Perspective on Virtues and Pitfalls, Routledge, 61-97. https://doi.org/10.4324/9780203849026

Postprint. Please cite as: Rixen, Thomas and Ingo Rohlfing (2007) The Institutional Choice of Bilateralism and Multilateralism in International Trade and Taxation, International Negotiation 12 (3), 389-414. https://doi.org/10.1163/138234007X240718

Postprint. Please cite as: Dietsch, Peter and Rixen, Thomas (2014) Tax Competition and Global Background Justice. Journal of Political Philosophy, Vol. 22, No. 2. https://doi.org/10.1111/j.1467-9760.2012.00419.x

Postprint. Please cite as: Genschel, Philipp and Thomas Rixen (2015) Settling and Unsettling the Transnational Legal Order of International Taxation, in: Gregory Shaffer, Terence Halliday (Ed.): Transnational Legal Orders. Cambridge, Cambridge University Press, 154-184. https://doi.org/10.1017/CBO9781107707092.006

Postprint. Please cite as: Rixen, Thomas (2011) From Double Tax Avoidance to Tax Competition: Explaining the Institutional Trajectory of International Tax Governance, Review of International Political Economy 18 (2), 197-227. https://doi.org/10.1080/09692290.2010.481921

Postprint. Please cite as: Rixen, Thomas (2011) Tax Competition and Inequality: The Case for Global Tax Governance. Global Governance 17 (4), 447-467. www.jstor.org/stable/23104286

The global financial crisis led G20 states to conclude that stronger regulatory standards and improved compliance were needed to ensure global financial stability. To this end, the G20, as collective governor, granted an institutional intermediary, the Financial Stability Board (FSB), authority to develop and supervise financial market regulations....

Why have Organisation for Economic Co-operation and Development (OECD) governments raised taxes on dividends at the shareholder level since 2008? Previous research points to the importance of budget deficits and voter demand for compensatory fairness in the aftermath of the financial crisis. We complement this literature by showing that the effect...

Why have OECD governments raised taxes on dividends at the shareholder level since 2008? Previous research points to the importance of budget deficits and voter demand for compensa-tory fairness in the aftermath of the financial crisis. We complement this literature by showing that the effect of domestic drivers of tax increases on capital income c...

Der Beitrag analysiert die Steuer- und Haushaltspolitik der zweiten Großen Koalition unter Angela Merkel. Nachdem die Fiskalpolitik im Wahlkampf ein zentrales Thema war, hat die Regierung in der anschließenden Legislaturperiode eine kleinteilige, reaktive und passive Politik betrieben. Anstatt die konjunkturell günstige Lage und die niedrigen Zinss...

This article studies the tax and fiscal policies of the second grand coalition under Chancellor Merkel. It demonstrates that the government contented itself with merely administering balanced budgets or surpluses, instead of seizing the opportunity of exceptionally good economic conditions and low interest rates to implement important structural re...

Dieser Artikel sucht nach Lösungen für ein Dilemma: Ein starker Steuerstaat ist die Grundvoraussetzung für die politische Stabilität der wirtschaftlichen Globalisierung. Die Globalisierung – in Form des Steuerwettbewerbs – unterminiert aber die demokratische Selbstbestimmung der Nationalstaaten über die Höhe, Struktur und Verteilungswirkung ihrer S...

In Zeiten latenter ökonomischer Unsicherheit und steigender sozialer Ungleichheit ist ein leistungsfähiger Wohlfahrtsstaat wichtiger denn je. Diese Einschätzung wird von einem Großteil der deutschen Bevölkerung geteilt. So plädiert eine deutliche Mehrheit der Bürger_innen für den Beibehalt oder den Ausbau staatlicher Leistungen in allen relevanten...

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2745157

Die schwarz-gelbe Regierung definierte als ihr zentrales Reformprojekt eine erhebliche Vereinfachung und Senkung der Steuern. Tatsächlich war die Regierung aber, wie in diesem Kapitel gezeigt wird, die steuerpolitisch inaktivste der letzten vier Jahrzehnte. Warum? Ich argumentiere, dass sich dieses Politikergebnis mit der Parteiendifferenz und der...

This chapter first sketches the impact of three different kinds of tax competition (for portfolio capital, so-called paper profits, and foreign direct investment (FDI)) on the de facto sovereignty of states. It shows how tax competition exacerbates social inequalities in order to explain why it is a case of background injustice. The chapter then la...

The observation that the international institutional order has proven highly resilient in the face of exogenous shocks, while at the same time undergoing significant changes, has focused scholarly attention on questions of "institutional development" This book addresses the challenge of explaining both stability and change in international institut...

Tax policy was at the heart of the Merkel II government's reform agenda. The CDU/CSU and FDP promised significant tax cuts and simplifications of the tax system. During their term, however, they remained the least active of all German governments of the last four decades. Why? This article argues that a combination of factors relating to the dynami...

Global income inequalities are met with increasing calls for direct supranational redistribution. This article argues that from the perspective of political feasibility, this approach should not be prioritised. We use the example of tax competition to show that supranational regulation that stops short of direct redistribution has better chances of...

Previous empirical studies have mainly analyzed tax competition, neglecting the role of tax cooperation in international taxation. We focus on German double taxation agreements (DTAs) and show for up to 45 tax treaties that the bargaining outcomes depend on investment asymmetries between the countries. A transition from a purely symmetrical country...

Taxes on the rich will only be useful instruments in the fight against inequality if they are effectively enforced. Therefore, this article assesses international cooperation to counter harmful tax flight and tax competition. It describes different forms of tax avoidance, evasion and competition and the respective instruments to counter them. Using...

A crucial element in the complex chain of factors that caused the recent financial crisis was the lack of regulation and oversight in the shadow banking sector, which is largely incorporated in offshore financial centers (OFCs), but instead of swift and radical regulatory reform in that sector after the crisis, we observe only incremental and ineff...

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2734869

Recent research has noted a trend of increased “politicization” of international politics, i.e., decisions of international institutions are increasingly debated and contested within civil society. What is lacking so far are explanations for this trend. In this paper we derive four potential explanations and empirically test them. The first two, so...

The international regime or “transnational legal order” (TLO) (Shaffer & Halliday this volume) of taxation consists of a body of multilateral, bilateral, and unilateral hard and soft laws regulating the tax treatment of cross-border economic activities, especially investment activities. The chapter reconstructs the dynamics of change of this TLO si...

Versions of this article have been presented at the Canadian Political Science Association (Montréal, 2010), the ECPR General Conference (Reykjavik, 2011), the Social Science Research Center Berlin (WZB) as well as at the Centre de Recherche en Éthique de l'Université de Montréal (CREUM). For comments on previous drafts of this article we thank par...

This article examines the strategies employed by individual investors to evade cross‐border capital income taxation, and evaluates the effectiveness of the European Union Savings Tax Directive (STD). Using data for four European countries, the results are, first, individual investors adapted to the institutional changes implemented by the STD befor...

In this article I present the normative case for global tax governance. I argue that, contrary to an influential part of the literature, national tax policy choices cause significant externalities for other nation states. Focusing in business taxation, I show that tax competition undermines the integrity and distributive principles of domestic tax...

Why do states cooperate bilaterally or multilaterally? This article addresses the issue using the example of international double tax avoidance. It is argued that double tax avoidance exhibits the strategic structure of a coordination game with a distributive conflict. The distribution of tax revenues depends on the asymmetry of investment flows be...

Abstract will be provided by author.

In a globalized economy states compete for mobile tax bases. This tax competition undermines the fiscal self-determination of states and exacerbates inequalities of income and wealth both within countries and across borders. The paper provides a normative evaluation of the rules gov-erning international tax competition. It is premised on the idea t...

In der Finanzkrise erfährt die Problematik sogenannter Steuer-und Regulierungsoasen eine neue Dringlichkeit und öffentliche Aufmerksamkeit. Die G 20 haben auf ihren Weltfi-nanzgipfeln erklärt, dass sie eine bessere Aufsicht über Steuer-und Regulierungsoasen an-streben. Der deutsche Finanzminister Peer Steinbrück droht der Schweiz mit dem Ausritt de...

This article presents a history of international tax governance and offers a rationalist reconstruction of its institutional trajectory. As an unintended consequence of its institutional setup, the tax regime, which originally only dealt with double tax avoidance, endogenously produces harmful tax competition. Despite this negative effect there are...

This paper gives an overview of the institutional arrangements of international taxation and shows that they can be understood as a structure of multi-level governance.

There are two largely distinct bodies of literature and corresponding research areas in international taxation. On the one hand, there is the big and continuously growing body of theoretical and empirical literature on tax competition, mainly in the field of economics; on the other, there is a large body of mostly legal literature dealing with inte...

Im August 2005 wurde der Universitätsprofessor Paul Kirchhof von Angela Merkel zum Schattenfinanzminister nominiert. Diese Entscheidung war ein wesentlicher Grund für das enttäuschende Wahlergebnis der CDU. Kirchhofs steuerpolitische Ideen boten der SPD eine willkommene Angriffsfläche, um die CDU als unsozial und neoliberal darzustellen. Bei den Wa...

Previous empirical studies have mainly analyzed tax competition, neglecting the role of tax cooperation in international taxation. We focus on German double taxation agreements (DTAs) and show for up to 45 tax treaties that the bargaining outcomes depend on investment asymmetries between the countries. A transition from a purely symmetrical country...

"Dieses Papier untersucht den institutionellen Wandel des internationalen Steuerregimes in Reaktion auf eine zunehmende Politisierung internationaler Steuerangelegenheiten. Gesellschaftliche Politisierung, die im Bereich der internationalen Besteuerung ein sehr junges Phänomen ist, hat ihre Ursache in einer Governancelücke. Das traditionelle instit...

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2745155

Die Bürger akzeptieren die Ziele und Aufgaben des Steuersystems, zugleich wird es aber als unverständlich und ungerecht angesehen. Ändern lässt sich dies durch die Herstellung von Transparenz. Richtig und umfassend verstanden, ist Transparenz die Voraussetzung für ein gerechtes und effi zientes Steuersystem. Ein System mit einem informierteren Bürg...

This article analyzes the institutional design of international double tax avoidance. The basic argument is that double tax avoidance exhibits the strategic structure of a coordination game with a distributive conflict. The distribution of tax revenues depends on the asymmetry of investment flows between treaty partners. Since investment flows are...

Anfang der 90er Jahre war man sich unter Sozialwissenschaftlern einig, dass die Vollendung des Binnenmarktes zu erheblichem Wettbewerb zwischen den Mitgliedstaaten führen werde (statt vieler Gatsios/Seabright 1989; Giovannini 1989; Scharpf 1994; Sinn 1995). Je freier sich Güter, Dienstleistungen, Kapital und Personen über nationale Grenzen hinweg b...

In the previous chapter, institutional choice in double tax avoidance was analysed. In this chapter, I broaden the perspective to include double nontaxation. I first briefly summarize the major developments in the fight against double non-taxation and show that they can be characterized as indirect and implicit changes in the international tax regi...

Initially, international cooperation in direct taxation was only concerned with avoiding double taxation. Over time, the issue of tax evasion and avoidance was added to the agenda. I first formulate questions concerning the institutional form of double tax avoidance and then turn to the issue of institutional reactions to the problem of double non-...

In this chapter and Chapter 6, I describe how international tax governance emerged and developed over time. In doing so, I cover the entire history of international taxation. Since this is a period of almost a century, I concentrate on the most important developments on the multilateral, bilateral and unilateral levels. With respect to unilateral p...

In this chapter, I construct an explanation for the institutional form of double tax avoidance by reconsidering and refining the baseline model of Chapter 3. First, I summarize the basic features of the institutional setup as the empirical account has revealed them in the language of rational choice institutionalism. Then I argue that the baseline...

The tax regime’s growth and success also caused problems in the form of increased possibilities for tax avoidance and evasion. After a description of the development through which increased possibilities for tax avoidance and evasion were created, I outline how governments have reacted to this challenge by engaging in incremental reform since the 1...

In this chapter, a simple model of tax cooperation is developed. The basic model is not meant to capture all the relevant characteristics of international tax policy; instead, the intention is to develop first predictions about countries’ strategic concerns in international tax policy. I first discuss why single taxation is the collectively optimal...

In international tax policy, countries follow the twin goals of eliminating double taxation and double non-taxation. According to the first goal international transactions should not be disadvantaged in relation to purely national transactions so that states can realize the benefits of international economic liberalization.1 The problem in this cas...

In this book, I have explored the governance structure of international income taxation. The causal reconstruction has shown that the underlying strategic structure of double tax avoidance — historically states’ only concern — is a coordination game with a distributive conflict. Distinguishing between different stages of the cooperation process — b...

Trade relations are governed by a multilateral agreement, whereas the avoidance of double taxation rests on a network of about 2000 separate bilateral treaties. What accounts for the difference in the institutional form? Distinguishing between the bargaining and agreement stage of international cooperation, we first show that the institutional desi...