Taxing across Borders: Tracking Personal Wealth and Corporate Profits
- (pp. 121-48)
AbstractThis article attempts to estimate the magnitude of corporate tax avoidance and personal tax evasion through offshore tax havens. US corporations book 20 percent of their profits in tax havens, a tenfold increase since the 1980; their effective tax rate has declined from 30 to 20 percent over the last 15 years, and about two-thirds of this decline can be attributed to increased international tax avoidance. Globally, 8 percent of the world's personal financial wealth is held offshore, costing more than $200 billion to governments every year. Despite ambitious policy initiatives, profit shifting to tax havens and offshore wealth are rising. I discuss the recent proposals made to address these issues, and I argue that the main objective should be to create a world financial registry.
CitationZucman, Gabriel. 2014. "Taxing across Borders: Tracking Personal Wealth and Corporate Profits." Journal of Economic Perspectives, 28 (4): 121-48. DOI: 10.1257/jep.28.4.121
- D31 Personal Income, Wealth, and Their Distributions
- H25 Business Taxes and Subsidies including sales and value-added (VAT)
- H26 Tax Evasion and Avoidance
- L25 Firm Performance: Size, Diversification, and Scope
Naive and dangerous
The proposal is also legally naÃ¯ve in that it assumes "ownership" always exists. Such proposals will only lead to greater demand for the services of skilled lawyers and as both an economist and a lawyer I see no reason why taxpayers should not be assisted in finding new and lawful ways to escape the "vexatious inquisition" - to quote Adam Smith - proposed by people such as this writer.
Dr Terry Dwyer