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Tax Competition and Global Background Justice

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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.

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... 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. ...
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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.