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Tax Competition and Global Background Justice
Abstract
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 lays out two principles of international taxation: a membership principle and a constraint on fiscal policy that rules out fiscal arrangements. Next, the chapter proposes the establishment of an International Tax Organization (ITO) and endorses unitary taxation with formulary apportionment (UT+FA) as a reform of corporate taxation. The chapter also discusses the objection that these principles are incompatible with defending a cosmopolitan theory of global justice. Furthermore, it argues that the two principles serve as a normative toolkit to specify to what extent the interdependence of states in fiscal matters calls for normative interdependence.
... Laurens van Apeldoorn, in Chapter Ten, discusses the contours of a modern understanding of the idea of fiscal sovereignty. He critically discusses recent attempts to define this sovereignty in a way that extends, at least to some extent, to the protection of the effectiveness of fiscal policy (Dietsch and Rixen 2014; Ronzoni 2016, Chapter Nine in this volume). While these accounts maintain that the mobility of tax-bases constitutes a variable that polities, at least to some extent, should be able to control, van Apeldoorn defends the idea that capital outflows in reaction to tax incentives elsewhere should be viewed as a parameter of national tax policies. ...
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 crisis of global tax governance is not about to dry up. Much work has been done in individual disciplines on the phenomenon of tax competition that lies at the heart of this crisis. Yet, the combination of issues of democratic legitimacy, social justice, economic efficiency, and national sovereignty that tax competition raises clearly requires an interdisciplinary analysis. This book offers a rare example of this kind of work, bringing together experts from political science, philosophy, law, and economics whose contributions combine empirical analysis with normative and institutional proposals. It makes an important contribution to reforming international taxation.
International treaties create a layer of law that is particularly hard to change: While modern treaties entail significant constraints on domestic law-making, amendments require a new consensus of state parties. This creates a conflict with a core aspect of democratic constitutions: the power of new majorities to revise the laws made by their predecessors. In particular, several obligations of international economic law, namely regulatory stability promises in investment protection treaties, but also criminalization requirements under the UN drug control conventions face critique for overly diminishing domestic policy space. How can democratic constitutions deal with those tensions? One approach that is common in some countries accepts a power to legislate in violation of treaty obligations. But denying treaties the quality as real law in the domestic sphere risks to undermine the benefits of the instrument without truly solving the democracy concerns. Instead, democratic constitutions can be read to entail certain standards for engaging in treaties, namely (i) procedure-related duties to include denunciation clauses and political reform mechanisms in the treaty, and (ii) the need to establish a substantive justification for treaty constraints on future domestic law-making by legitimate aims of international constitutionalism or co-operation.
Zusammenfassung
Zahlreiche Großunternehmen dokumentieren im Rahmen ihrer gesellschaftlichen Verantwortung (Corporate social responsibility, CSR) erbrachte Leistungen in CSR-Reports. Wenn eine ausgeprägte CSR-Publizität mit extrem niedrigen Steuerquoten von Unternehmen einhergeht, kann es wie bei Starbucks 2012 in Großbritannien zu Protesten in der politischen Öffentlichkeit kommen: Während Unternehmen bislang Beiträge zum Steueraufkommen nicht zu ihren CSR-Pflichten zählten, erwartet die Öffentlichkeit von ihnen, dass sie freiwillig einen „fairen“ Anteil am Steueraufkommen der Staaten übernehmen, in denen sie ihre Geschäftstätigkeit ausüben; Unternehmen können Reputationsschäden drohen, wenn sie keine „Good corporate citizens“ sind. Franz W. Wagner bezieht deshalb in seinem konzeptionellen Überblick über die umfangreiche CSR-Fachliteratur die Steuerbelastung von Unternehmen mit ein. Er erörtert CSR-Aktivitäten von Unternehmen und steuerfinanzierte Staatstätigkeit als alternative Organisationsformen der Produktion und Finanzierung spezifischer privater und öffentlicher Güter unter Effizienz- und Verteilungskriterien. Im Vergleich zu einer steuerfinanzierten Staatstätigkeit können CSR-Aktivitäten von Unternehmen vor allem wegen ihrer ungünstigeren Verteilungswirkungen nachteilig sein.
The present article explores 'anti-cosmopolitan' arguments that shared institutions above the state, such as there are, are not of a kind that support or give rise to distributive claims beyond securing minimum needs. The upshot is to rebut certain of these 'anti-cosmopolitan' arguments. Section I asks under which conditions institutions are subject to distributive justice norms. That is, which sound reasons support claims to a relative share of the benefits of institutions that exist and apply to individuals? Such norms may require strict equality, Rawls' Difference Principle, or other constraints on inequality. Section 2 considers, and rejects, several arguments why existing international institutions are not thought to meet these conditions.
- Simon Caney
- Justice Beyond
- Borders
Simon Caney, Justice Beyond Borders: A Global Political Theory
(Oxford: Oxford University Press, 2006);
65 These are some of the classic reasons given for a federal structure. See e.g. Andreas Follesdal Federal inequality among equals: a contractualist defense An essay on fiscal federalism
- E Robert
- E Goodin Wallace
- Oates
Robert E. Goodin, " What is so special about our fellow countrymen? " Ethics, 98 (1988),
663–86 at p. 681.
65 These are some of the classic reasons given for a federal structure. See e.g. Andreas Follesdal,
" Federal inequality among equals: a contractualist defense, " Global Justice, ed. T. Pogge (Oxford:
Blackwell, 2001), pp. 242–61 at pp. 251–53; Wallace E. Oates, " An essay on fiscal federalism, "
Journal of Economic Literature, 37 (1999), 1120–49. In addition, the existence of several smaller
units allows for different experiments of life.
- Thomas Pogge
Thomas Pogge, World Poverty and Human Rights
(Cambridge: Polity Press, 2008).
663-86 at p. 681. 65 These are some of the classic reasons given for a federal structure
- Robert E Goodin
Robert E. Goodin, "What is so special about our fellow countrymen?" Ethics, 98 (1988),
663-86 at p. 681.
65 These are some of the classic reasons given for a federal structure. See e.g. Andreas Follesdal,
"Federal inequality among equals: a contractualist defense," Global Justice, ed. T. Pogge (Oxford:
Blackwell, 2001), pp. 242-61 at pp. 251-53;
In addition, the existence of several smaller units allows for different experiments of life
- Wallace E Oates
Wallace E. Oates, "An essay on fiscal federalism,"
Journal of Economic Literature, 37 (1999), 1120-49. In addition, the existence of several smaller
units allows for different experiments of life.