International tax competition undermines states’ capacity for redistributive taxation. It is thus problematic from the point of view of both cosmopolitan and internationalist theories of justice. This article examines the proposal of a fiscal policy constraint that prohibits tax policies if they are strategically motivated and harmful to effective fiscal self-determination internationally. I argue that we should opt for a more robust, preference-independent mechanism to prevent harmful tax competition instead. States should, as a matter of justice, accept global (...) minimum tax rates on mobile tax bases. (shrink)

Does globalization undermine the fiscal basis of the welfare state? Some observers are not convinced. They claim that aggregate data on Organization for Economic Cooperation and Development countries show no drop in tax levels and conclude from this that tax competition is not a serious challenge for the welfare state. This conclusion is unwarranted. The article shows that tax competition systematically constrains national tax autonomy in a serious way. It prevents governments from raising taxes in response to rising (...) spending requirements and from detaxing labor in response to growing unemployment. (shrink)

Rich people stash away trillions of dollars in tax havens like Switzerland, the Cayman Islands, or Singapore. Multinational corporations shift their profits to low-tax jurisdictions like Ireland or Panama to avoid paying tax. Recent stories in the media about Apple, Google, Starbucks, and Fiat are just the tip of the iceberg. There is hardly any multinational today that respects not just the letter but also the spirit of tax laws. All this becomes possible due to tax competition, with countries (...) strategically designing fiscal policy to attract capital from abroad. The loopholes in national tax regimes that tax competition generates and exploits draw into question political economic life as we presently know it. They undermine the fiscal autonomy of political communities and contribute to rising inequalities in income and wealth.Building on a careful analysis of the ethical challenges raised by a world of tax competition, this book puts forward a normative and institutional framework to regulate the practice. In short, individuals and corporations should pay tax in the jurisdictions of which they are members, where this membership can come in degrees. Moreover, the strategic tax setting of states should be limited in important ways. An International Tax Organisation should be created to enforce the principles of tax justice.The author defends this call for reform against two important objections. First, Dietsch refutes the suggestion that regulating tax competition is inefficient. Second, he argues that regulation of this sort, rather than representing a constraint on national sovereignty, in fact turns out to be a requirement of sovereignty in a global economy. The book closes with a series of reflections on the obligations that the beneficiaries of tax competition have towards the losers both prior to any institutional reform as well as in its aftermath. (shrink)

Journal of Political Philosophy, EarlyView.

In the global justice literature, growing attention has been given to problems particular to a globalised economy such as tax competition. Political philosophers have started to reflect on how these problems intersect with theories of global justice. This paper explores the idea according to which action-guiding principles of justice can only be formulated at such intersections. This is the starting point from which I develop a ‘non-ideal theory’ of global justice. The methodology of this theory posits that principles of (...) justice are formulated according to the practice they are intended to regulate. Individual practices provide insights about the formulation of principles, for the non-ideal circumstances that prevent the realisation of justice are only revealed through the interpretation of each practice. With regard to the content of principles, I reject the notion that non-ideal theory is applied ideal theory. I offer instead an overview of the main features of a conception of justice for a non-ideal world based on the ideas of compliance, fact-sensitivity, feasibility and path-dependence. The contribution of this paper is twofold: to provide the conceptual framework for an action-guiding non-ideal theory of global justice and to show why this theory is well-suited to address problems of a globalised economy, such as tax competition. (shrink)

In today’s globalised economy, characterised by high capital mobility but largely domestic tax policy, individuals and corporations can pick and choose between different tax regimes. In Catching Capital: The Ethics of Tax Competition, Peter Dietsch offers a commanding analysis covering the moral assessment and an institutional solution to the problem of tax competition. This book will prove useful to political philosophers and legal theorists seeking a thorough approach to global justice that proceeds from real-world practice. And, more importantly, (...) it will also assist policymakers, lawyers and economists from fiscal policy sectors looking for a proposal that binds together the interdisciplinary theory and practice of tax competition. (shrink)

In 2011, two Chinese municipalities, Chongqing and Shanghai, enacted a property tax on rich homeowners. However, the two municipal governments sharply diverged in their designs of the tax and the justifying frames used. Whereas Chongqing explicitly framed the tax as a redistributive measure targeting the economic elite, Shanghai framed it as an ad hoc technical intervention in the housing market that would antagonize no one. This article explains how the only two Chinese cities that introduced this unconventional tax ended up (...) enacting the tax in such different ways. In doing so, this article proposes a theoretical framework synthesizing two main pillars of Bourdieu’s state theory – a conceptualization of the state as a field of competition, and a careful consideration of the symbolic dimension of state power. The political competition in which the top leaders of the two municipalities were engaged drove them to enact the tax. The positions these leaders occupied in the field of competition shaped their specific strategies of accumulating competition-specific capital, getting their capital noted and recognized by other players in the field, and theatricalizing their capital-seeking acts as serving some universal interest. These dynamics gave rise to divergent styles of enacting the tax. (shrink)

Under conditions of high capital mobility, states are pressurised into various forms of tax competition to attract or retain capital and investors. When this occurs, the capacity of domestic institutions autonomously to generate fiscal policies is constrained. What exactly, if anything, is unjust about this phenomenon? This paper argues that tax competition puts particular pressure on internationalists, who must acknowledge that its occurrence makes our obligations of global justice more demanding, and that such obligations require supranational institutions in (...) order to be discharged. However, to the extent that tax competition is unjust from an internationalist point of view, this is due to the specific harm it does to states. Thus, the paper makes three contributions to the literature: it shows that tax competition has an impact on the demandingness of internationalist obligations of justice; discharging such obligations commits internationalists to accept a higher level of supranational institutionalization than is currently acknowledged; yet both the specific content of such obligations, and the kind of supranational regulation that is needed to discharge them, differ from those which cosmopolitans support. In sum, there are some cosmopolitan bullets which internationalists must bite, and others which they should continue to resist. (shrink)

Who should tax multinationals? National political figures sometimes signal their assumptions by making superior or even exclusive claims about who may tax “their” multinational companies, and it is common to hear such companies or their incomes referred to as “belonging” to one nation or another. The rhetoric reflects conventional wisdom about sovereign nations and their assumed entitlements, and is often invoked to curb or even sanction the seemingly excessive tax jurisdictions of some nations. But this conventional wisdom often ignores the (...) fundamental dependence of multinationals on ongoing, extensive, and multifaceted regulatory cooperation involving most of the nations of the world. The goal of this essay is to demonstrate that given this dependence, there are no clear legal or normative boundaries to virtually any asserted tax jurisdiction. The claim provides a solution for neither double taxation nor the problems associated with excessive tax competition, but the essay concludes that recognizing the dependence of governments and “their” multinationals on multilateral cooperation should lead to an increase in focus on how nations go about negotiating the terms of their cooperation on tax. (shrink)

Inequality, as well as the scope of the duty of justice to reduce it, has always been a central concern of political justice. Income taxation has been seen as a key tool for redistribution and the state was the arena for discussions of justice. Globalization and the tax competition it fosters among states change the context for the discussion of distributive justice. Given the state’s fading coercive power in taxation and the decreasing power of its citizenry to co-author its (...) collective will due to global competition, we can no longer assume that justice can be realized within the parameters of the state. International tax policy in an effort to retain justice often opts for cooperation as a vehicle to support distributive justice. But cooperation among states is more than a way for them to promote their aims through bargaining. Rather, it is a way for states to regain legitimacy by sustaining their very ability to ensure the collective action of their citizens and to treat them with equal respect and concern. The traditional discussion in international taxation seems to endorse a statist position — implicitly assuming that when states bargain for a multilateral deal, justice is completely mediated by the agreement of the states. In contrast, this Article argues that such a multilateral regime intended to provide the state with fundamental legitimacy requires independent justification. Contrary to the conventional statist position, I maintain that cooperating states have a duty to ensure that the constituents of all cooperating states are not treated unjustly because of the agreement. I argue that not only cosmopolitanism but political justice too requires that a justifiable cooperative regime must improve the welfare of the least well-off citizens in all cooperating states. I explain that cooperation alone is no guarantee of improved welfare and that certain transfer payments between rich and poor countries might be required to ensure this. (shrink)

One of the central issues in comparative law and political economy is whether the forces of globalization will result in the convergence of public policies across countries. Noting in particular that taxes collected still cover a considerable range across industrialized countries — from a low of 20% of GDP to a high of 50% — some have argued that globalization has not resulted in a loss of tax sovereignty. However, following a review of the evidence, in this Article we conclude (...) that globalization has had significant but subtle effects on tax levels and structures. Moreover, these pressures will make it increasingly difficult for countries to raise revenue to finance new public needs and to structure their tax systems in order to achieve a more socially acceptable distribution of income than what market forces dictate. Tax levels in most countries have remained essentially flat over the past twenty years, but there is a host of reasons for thinking they would have continued to rise were it not for the pressures of globalization. Statutory corporate tax rates have declined dramatically and, although corporate tax revenues have remained robust, this has been due to factors unrelated to deliberate tax policy choices. Personal marginal tax rates have also declined sharply and tax revenues have been increasingly raised by regressive consumption taxes. These trends stem from tax competition brought on by the forces of globalization, not from changing ideas or other political variables. In this Article we conclude that in order to prevent tax competition from completely eroding the ability of countries to fashion their own tax systems, there will have to be considerable cooperation among the major countries and some harmonization of aspects of their tax systems, particularly as they apply to footloose factors of production. (shrink)

Within the health care industry, the move from regulatory cost controls to market competition has generated rapid and dramatic restructuring of providers. To enhance their competitive positions in the evolving market, many health care organizations are pursuing the ownership and integration of all elements and stages of health care delivery and payment, with the goal of increasing access to capital and lowering costs through administrative efficiencies and economies of scale. As of July 1994, 24 percent of hospitals were members (...) of an integrated delivery system, and 47 percent were involved in IDS development.IDSs pose a singular challenge to the Internal Revenue Service. The IRS recognizes that its traditional policies for granting tax exempt status are not flexible enough for the competitive and rapidly changing health care market. In recent years, the IRS has taken a more active role in scrutinizing emerging health care institutions seeking taxexempt status. (shrink)

Competitive Governments, explores in a systematic way the hypothesis that governments are internally competitive, that they are competitive in their relations with each other and in their relations with other institutions in society which, like them, supply consuming households with goods and services. Breton contends that competition not only serves to bring the political system to an equilibrium, but it also leads to a revelation of the households' true demand functions for publicly provided goods and services and to the (...) molding of a link between the quantities and the qualities demanded and supplied and the tax prices paid for these goods and services. In the real world where information is costly, the links may not be first-best, but they will be efficient if competition is vigorous. (shrink)

Imagine two friends. Anna inherits nothing and works for every penny she has, while Mary inherits millions. How should a world that respects individual autonomy and private property rights treat Anna’s earnings and Mary’s inheritance? Should it tax them the same, or tax one more heavily than the other? If the latter, which one? The conventional wisdom holds that although some “right” libertarian theories justify taxing income, none justify taxing inheritances. Such taxes are “expropriations” and “an especially cruel injury” that (...) “run[] roughshod over [a] deceased’s interest in the ends his property will serve.” This essay explores the standard libertarian objections to taxing gifts and bequests and argues that libertarians overstate their case when distinguishing the taxation of gratuitous transfers from other types of taxation. At minimum, the benefit theory of taxation embraced by many minimal statists and classical liberals mandates that the receipt of gifts and bequests should be taxed to the recipient. Moreover, the goals of curbing inherited political power and preventing wealthy families from insulating their members from market competition provide two additional explanations for why taxing inheritances to recipients is compatible with classical liberal values. (shrink)

Historically, it is safe to say that very few laws did as much to stoke inequality as laws touching descents and hereditary transmissions. This paper attempts to see if the classical liberal tradition can endorse inheritance taxation so as to further fair equality of opportunity, as well as to lessen inequality of undeserved wealth. It argues that fair equality of opportunity is a necessary feature of market societies to make sure that they remain competitive. Hence, inheritance taxation is most likely (...) necessary from a classical liberal point of view as an instrument of social mobility to counter notable problems of social immobility, say hereditary vocational stratification, which a system of private property rights creates. (shrink)

This article points to the highly centralized nature of the British tax system. A first section shows how all tax law derives from Parliament, the “onlie begetter” of legally enforceable instruments. It is suggested that this system is not democratically accountable at sub-national levels of government. Reforms of the Thatcher era have resulted in the privatization of many public services, leading to the stabilization of State expenditure as a proportion of GDP. However, at the same time, both tax revenue and (...) expenditure have become increasingly centralized. Public service tasks are determined and financed by central government, and local government is for the most part merely the agent through which government policy is realized. The creation of the Scottish and Welsh Assemblies does not alter this overall assessment. Given the high level of centralization, taxes are uniform throughout the country and there is no scope for meaningful regional fiscal competition. Since regional economic development in Britain is notoriously uneven, the author notes that fiscal uniformity does not lead to economic convergence. A final section is devoted to showing why this is not surprising and why fiscal harmonisation at a European level would be a source of growing, not reduced, disparities.Cet article met l’accent sur la nature hautement centralisée du système fiscal britannique. Une première section montre comment toutes les lois fiscales proviennent du Parlement, la “source unique” des instruments légaux exécutoires. Nous considérons que ce système n’est pas démocrat- iquement defendable aux niveaux subnationaux de gouvernement. Les réformes de l’ère Thatcher ont conduit à une privatisation de beaucoup de services publics, entrainant une stabilisation des dépenses de l’Etat en pourcentage du PIB. Cependant, dans le meme temps, à la fois les recettes fiscales et les dépenses sont devenues de plus en plus centralisées. Les taches du service public sont définies et financées par le gouvernement central et le gouvernement local est dans la majeure partie des cas l’agent à travers lequel la politique du gouvernement s’exerce. La creation des Assemblées Ecossaises et galloises ne modifie pas cette evaluation d’ensemble. Etant donné le niveau élevé de centralisation, les impôts sont uniformes à travers le pays et il n’y a pas de possibilité pour une concurrence fiscale régionale significative. Alors que le développement économique regional en Grande Bretagne est notoirement inégal, l’auteur remarque que l’uniformité fiscale ne conduit pas à uneconvergence économique. Une section finale est consacrée à montrer pourquoi cela n’est en rien surprenant et pourquoi l’harmonisation fiscale à un niveau européen serait une source de disparités croissantes, et non décroissantes. (shrink)

Using an international sample of firms from 32 countries, we study the relation between media independence and corporate tax aggressiveness. We measure media independence by the extent of private ownership and competition in the media industry. Using an indicator variable for tax aggressiveness when the firm’s corporate tax avoidance measure is within the top quartile of each country-industry combination, we find strong evidence that media independence is associated with a lower likelihood of tax aggressiveness, after controlling for other institutional (...) determinants, including home-country tax system characteristics. We also find that the effect of media independence is more pronounced when the legal environment is weaker, and when the information environment is less transparent. We contribute to the business ethics literature by documenting the role of independent media as an external monitoring mechanism in constraining corporate tax aggressiveness. (shrink)

Developing countries often rely on consumption taxes, because these are broad, easy to administer, and harder to evade. However, the taxation system becomes inherently regressive. To counter this problem of the regressive nature of consumption taxes, there is a temptation among policymakers to address equity concerns through a multiplicity of rates, making the consumption tax system complex. Here, complexity is considered the by-product, or companion, to pursuing goals of equity. Complex tax systems, however, pose a different problem relating to equity. (...) Assuming a minimum fixed cost of compliance imposed by a complex tax system, smaller firms and individuals face a much higher cost of compliance relative to larger firms and richer individuals. Oligarchic sectors dominated by a few large firms also find it easier to organize and lobby to get favorable rates compared to competitive sectors with small firms. Though complexity is considered a by-product of several equity-enhancing measures, the Indian experience with its Goods and Services Tax reform serves demonstrates the opposite, that there is a trade-off between equity and complexity. (shrink)

Some sharing economy firms have adopted a strategy of “regulatory entrepreneurship,” openly violating regulations with the aim of rendering them dead letters. This article argues that in a democracy, regulatory entrepreneurship is a presumptively unethical business strategy. In all but the most corrupt political environments, businesses that seek to change their regulatory environment should do so through the democratic political process, and they should do so without using illegal business practices to build a political constituency. To show this, the article (...) defends a qualified moral obligation for businesspeople to obey the law even in societies that fall short of ideal democracy and that are rife with economic injustice. Owners and managers of successful businesses have strong moral reasons to obey laws concerning resource allocation. Such laws include not only property law, but also tax laws, environmental regulations, and other laws that regulate businesses in competitive markets. The moral reasons to obey such laws apply even to laws that business leaders think unfair or inefficient, provided that the laws in question have reasonable, good faith defenders. (shrink)

Debates concerning the taxation of prostitution have occurred in taxation law and in feminist literature. This article will integrate the case of Polok v. C.E.C. [2002] E.W.H.C, 156; [2002] S.T.C. 361, within the feminist legal canon. The case is discussed in the context of the argument of the European doctrine of fiscal neutrality, which dictates that, regardless of legality as amongst member states, if an activity is levied to V.A.T. in one member state, V.A.T. should be levied on it in (...) all member states. The doctrine of sovereignty accepts the possibility that the integrity of the V.A.T. system may be compromised by the levying of tax on illegal activities, in terms of the cooperation between tax and other aspects of the U.K.’s legal system. European law, feminist law, commodification and the marketplace are all considered within the context of these principles. The article also considers the place of Polok within standard feminist texts on prostitution. Different paradigms of prostitution define different aspects of prostitution as ‘problems’, and the article considers the implications within a feminist reconstruction of Polok of this. The article suggests that the challenge for a feminist analysis of Polok is to remain within the realm of European tax and competition law, and to render the perspective of the employees of the Polok taxpayers part of the substance of the deliberations of the case. (shrink)

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 being implemented. Moreover, as the case of tax competition illustrates, such regulation can help to shore up the capacity of nation states to redistribute internally, which indirectly tends to (...) reduce global inequalities, too. Against this background, we formulate the conditional subsidiarity principle of redistribution. It states that when the case for direct supranational redistribution is built on the alleged incapacity of the state to redistribute due to the pressures of globalisation, our first instinct should be regulatory reform in order to restore this capacity. Finally, the article asks whether two prominent proposals for global taxation – the global resource dividend and the financial transaction tax – pass the test of the conditional subsidiarity principle. (shrink)

The paper illustrates the evolution of the territorial system of government in Italy. A traditionally centralized state is turning into a quasifederation. The reasons underpinning this transformation are the growing insatisfaction with the inefficiency of the central government, the quest for autonomy by the fastest growing regions and the opposition by the latter to the interterritorial redistribution of resources made by the central government with the use of nontransparent and inefficient instruments.A substantial degree of subnational tax autonomy has been reintroduced. (...) The powers of subnational governments have been expanded. The main impact on decentralization derives, however, from the direct, popular, election of mayors and of presidents of regional and provincial governments.The transformation is far from complete. The central government is still reluctant to relinquishing its powers. The increased local tax autonomy did not yet introduce substantial tax competition. More precisely, tax rates were not reduced, but rather increased, due to the fiscal stringency of the whole public sector.L’article illustre l’évolution du système territorial de gouvernement en Italie. Un Etat traditionnellement centralisé est en train de devenir quasi-fédéral. Les raisons fondamentales de cette transformation sont l’insatisfaction croissante vis-à-vis de l’inefficacité du gouvernement central, la quête de plus d’autonomie de la part des régions à croissance rapide et l’opposition de ces dernières à la redistribution interterritoriale des ressources qu’opère le gouvernement central en utilisant des instruments opaques et inefficaces.Un degré substantiel d’autonomie fiscale subnationale a été réintroduit. Les pouvoirs des gouvernements subnationaux ont été étendus. L’impact principal de la décentralisation provient, cependant, de l’élection, directe et populaire, des maires et des présidents de gouvernements régionaux et provinciaux.La transformation est loin d’être complète. Le gouvernement central reste réticent à abandonner ses pouvoirs. L’autonomie croissante des impôts locaux n’a pas introduit pour le moment de concurrence fiscale. Plus précisément, les taux d’imposition n’ont pas été réduits, mais plutôt augmentés, en raison de la rigueur budgétaire de l’ensemble du secteur public. (shrink)

Competition – more specifically economic competition – is relevant to ethical reflection in different ways. Some of its features exacerbate the intensity of moral problems we may otherwise come across in a context of scarcity. For instance, when competition is especially tough – think about winner-takes-all cases – one agent is likely to lose significantly if he or she acts ethically, to the benefit of others who act in ways that seem ethically questionable. Whenever ‘ethics does not (...) pay’ and competition is intense, an economic actor can lose business as a result. Admittedly, business death does not necessarily amount to a person’s death, which makes it different from lifeboat cases. But running out of business is still a very serious problem. Consider also the issues that arise in the context of strong tax competition. Imposition of a fair corporate tax structure may simply chase the most mobile players to low-tax jurisdictions.Another fact about economic competition that renders ethical issues more vivid is company replaceability. Often, if a single agent renounces acting in a way considered morally problematic – e.g. investing in natural resource infrastructure and exploration in a country such as Burma – other players may step in to replace the single agent and immediately assume its morally problematic role. As a result, the people the single agent was concerned about – the citizens of Burma – may reap no positive consequences at all from what we consider the right act by the single agent.There is of course a connection between the first phenomenon – “competition may make it more costly for me to be moral” – and the second – “it makes no difference whether I act morally or not”. I lose in both cases, while no one other than a competitor who has no more moral status than I do wins. If I lose business because I aim at doing the right thing, and others immediately replace me, I will be the only loser. The only winner will be another company. And the very people I am most concerned about may gain nothing at all.It seems legitimate to expect moral theory to have at least something to tell us about what individual agents are supposed to do in such types of contexts. It is also moral theory’s task to consider under which conditions competition itself can be seen as a good thing, whether more competition is always better – as consumer protection too often assumes – and whether there is some connection between coming closer to perfect competition and getting closer to what could be called a fair price. The question is not only “how to be fair when there is competition”, it is also “can competition be fair?”These questions invite us to look more closely at markets. The marketplace allows for supply-demand coordination. It also allows consumers to compare products from different suppliers. We often operate under the assumption that the existence of competition helps to reduce the degree to which producers can exploit consumers. This assumption is, indeed, key to justifying policies that aim at fighting monopolies. But is this salutary effect enough to render even perfect competition fair? One might claim, for example, that while markets permit a reduction in producer exploitation of consumers, it may in fact exacerbate the reverse phenomenon, i.e. by allowing consumers to “exploit” workers and capitalists.Three papers offered in the present edition of Ethical Perspectives are the outcome of a workshop organized in October 2010 as part of a project entitled “Social Responsibility in Economic Life”. This workshop took place with the financial support of the Fondation Emile Bernheim at the Université catholique de Louvain. The first two papers – by Roberts and Dietsch – look at issues of fairness in competition, whereas the third – by Arnsperger – addresses the problem of fairness of competition.Competition is a location in which people continuously harm one another – e.g. my competitive practices can easily make you lose clients or your leadership position. Against this backdrop, the only important issue is often considered to be whether – and to what extent – such a harm should also be seen as a wrong.Roberts focuses on cases in which the very harm itself seems impossible to locate – a finding that would itself seem to moot the issue of wrongdoing from the start. Multiple-agent situations in particular challenge our ability to discern harm in any clear sense. Consider the case in which one agent’s acting in a questionable way seems to make no difference to the alleged victim, since had the one agent not acted in that way a second agent would have stepped in to replace the one agent and imposed at least the same degree of damage on that victim. In such an instance, how can the one agent’s acting in a questionable way be said to harm the victim, when the fact is that it makes no difference from the victim’s perspective whether the one agent acts in this way or not?Relying on an account of how individual agents can be said to participate in what is in effect a group harm, Roberts argues that that ‘no difference’ assessment is a mistake. She then demonstrates how the application of this concept of harm can translate into ethical constraints on specific agents.Dietsch focuses on regulatory competition and more specifically on the duties of one type of actor – the tax planning industry. He considers three definitions of corporate social responsibility before offering an even weaker definition. The latter consists in the following double obligation. According to Dietsch, corporations should ‘pay their taxes’ and ‘not undermine the respect of fiscal obligations by third parties’. He does not directly question the legitimacy of tax planning as a whole. He insists instead that self-regulation in this sector is utopian – more than in other sectors – even if one assigns to the actors in question a truly minimal social responsibility. In this connection, he identifies a twofold challenge that the ethical actor must, in Dietsch’s view, be prepared to meet.Finally, Arnsperger shows that the relationship between solidarity and competition can be understood in at least three ways. Competition can be seen as a source of solidarity. Solidarity can be seen as a counterweight to some effects of competition. And competition can be considered as a dynamic threat to genuine solidarity. He defends the third view as central, with clear implications for the claim according to which competition can be seen as fair. (shrink)

Switzerland provides a potential laboratory for testing various hypotheses connected with tax competition because of its extremely decentralized fiscal system. Twenty-six cantons have retained the ultimate power of deciding tax questions, and hence not only to limit the Federal level of the State to about 1/3 of total public expenditure, but also to retain absolute power to set their own levels of taxation. Furthermore, citizens can launch referenda on tax issues at any level of government.Fiscal competition between cantons (...) should therefore be easy to spot, resulting in lower tax cantons enjoying higher economic growth, or in a “race to the bottom” with lower tax cantons offering a lower level of public services. In fact, neither of these hypotheses is confirmed. This leads the author to suggest a third hypothesis based on public choice theory. The author suggests that the classical and the public choice hypotheses cancel each other out, leaving a mixed picture. The article ends with some reflexions on the implications of the Swiss experience for fiscal harmonization at a European level.La Suisse offre un véritable laboratoire pour tester plusieurs hypothèses de concurrence fiscale en raison de son système fiscal extrêmement décentralisé. Vingt six cantons ont conservé le pouvoir suprême de décider les questions fiscales et, donc, non seulement de limiter le niveau fédéral de l’Etat à 1/3 des dépenses publiques totales, mais aussi de conserver le pouvoir absolu pour fixer leurs propres niveaux de taxation. De plus, les habitants peuvent lancer des référendums en matière fiscale à tout niveau du gouvernement.La concurrence fiscale entre les cantons devrait être par conséquent plus facile à repérer, les cantons les moins imposés ayant une croissance économique supérieure, ou en un « nivellement par le bas » face aux cantons les moins imposés offrant un niveau inférieur de services publics. En fait, aucune de ces hypothèses n’est confirmée. Cela conduit l’auteur à suggérer une troisième hypothèse basée sur la théorie des décisions publiques. L’auteur suggère que les hypothèses classiques et celles des décisions publiques se neutralisent l’une l’autre, laissant place à un modèle mixte. L’article se termine par quelques réflexions quant aux implications de l’expérience Suisse pour une harmonisation fiscale au niveau européen. (shrink)

This article argues that capital flight of real investment presents governments with a quadrilemma. First, governments can tailor their policies to attract investors – but this is incompatible with a whole range of alternative policy choices. Second, they can simply accept capital flight – but this is incompatible with a robust capital stock and tax base. Third, they can harmonize its taxes and regulations with other states – but this is incompatible with international independence. Fourth, they can impose capital controls (...) – but this is incompatible with international capital mobility. These incompatibilities make up four different goals, the value of which are described. Strategies may be mixed, but the pursuit of any three goals must always come at the expense of the fourth. (shrink)

The main characteristic of the French local tax system undoubtedly resides in a convoluted structure which impedes any progress in the development of tax competition between local authorities. On the contrary, recent legislative evolutions make obvious a trend of recentralization of the French local finance system illustrated by the fact the State is presently the first tax contributor to the local authorities’ budgets. As a result, it becomes blatant that any new competence transfer to the local authorities without setting (...) up an explicit financing scheme for these transfers will put an end to the local authorities’ autonomy.L’ensemble du système fiscal local français est caractérisé par une structure complexe peu propice au développement de la concurrence fiscale entre collectivités locales. Bien au contraire, les évolutions récentes témoignent d’un phénomène de recentralisation des finances locales françaises par lequel l’Etat devient le premier contributeur à la fiscalité des collectivités locales. Au total, il semble évident que tout accroissement de transfert de compétences non accompagné d’une remise à plat du système fiscal local français ne peut conduire à terme qu’à la fin de l’autonomie des collectivités locales. (shrink)

Intense competition can compel lobbyists to exaggerate the benefits the government would see in tax returns and social welfare if agency officials allocate such resources to the lobbyist's members. This incentive to misrepresent grows when information asymmetry exists between lobbyists and government officials. A large body of literature has investigated how interest groups compete and interact, but it disregards the interdependency of interests between competing groups and associated strategic behaviors of other players. Our signaling model of lobbying reveals ways (...) in which agency officials can compel lobbyists for competing interests to lobby truthfully and what the policy implications of this compulsion can be. We also present case-study evidence of how this works in practice. (shrink)

Considering the lack of substantive scientific or theoretical studies about ethics in small and medium sized enterprises (SMEs) in Latin America, this paper examines the context of an existent paradox, based upon the perspective of experts and academicians of Latin America and the Caribbean. These countries live different realities, due to their respective European cultural influences, as well as to racial and economic issues. Such facts impact the size and characteristics of their industries. On the other hand, the SMEs face (...) more similarities in the region, so they will be treated as a group in the discussion of ethics and corporate social responsibility (CSR) in Latin American SMEs. As this topic has not been sufficiently investigated in this geographic area, the objective of this exploratory study is to offer a contribution for future research. It raises the main dilemmas and intends to explain how legislation and common practices enable and perhaps lead SMEs to choose unethical strategies to survive and compete in the market. These enterprises are growing in number and in job creation, but do not participate in the Gross National Product in the same proportion. Informality, tax evasion and corruption are gradually caused or erode morality in business, but can contribute to corporate social responsibility in the region. The paper tries to show positive and negative aspects of apparently unethical practices and discusses challenging ways to solve complex problems that are common in most Latin America. (shrink)

It is an article of almost religious faith in the United Kingdom that the National Health Service is far superior to a competitive market in health care services. In this brief and informal paper I show that the opposite is true. In contrast to market provision, the existence of the National Health Service entails the following. First, consumer sovereignty is virtually destroyed, since what services the consumer receives and how much he pays (through taxation) are determined by the government of (...) the day in consultation with vested and ideological interests. Second, a person may be denied a life-saving service despite having contributed more than his fair share to National Health Service over the course of his working life. Third, people often spend less on health care than they would like to spend, because any additional contributions (via increased taxes) are not linked to any benefit specifically for the person who makes them. Fourth, provision of services free at the point of need which is not linked to what a person pays encourages a wasteful misuse of resources. Fifth, absence of competition between health care providers leads to high cost and poor quality of service and a tendency to produce a standardised service rather than a tailored one; and government attempts to address this problem usually make it worse. Sixth, people’s freedom to engage in particular activities or lifestyles is likely to be curtailed because the costs of those activities are artificially socialised. I also point out that issues of inequality or poverty are much better addressed by means other than a nationalised health service. (shrink)

While it is widely believed that bribery is ubiquitous among Asian firms, few studies have offered systematic evidence of such activities, and the dynamics of bribery in Asian firms have not been well understood. The research reported here used World Business Environment Survey data to examine some distinct characteristics of bribery in Asian firms and to empirically test 10 hypotheses on determinants of bribery. We find that firm characteristics such as firm size, growth rate, and corporate governance are important determinants (...) of bribery activities at the firm level, and that Asian firms are more likely to bribe when faced with fierce market competition, corrupted court systems, convoluted licensing requirements, nontransparent interpretation of laws and regulations, inefficient government service delivery, and high taxes. (shrink)

ABSTRACT The main cause of the crisis was the behavior of the banks—largely a result of misguided incentives unrestrained by good regulation. Conservative ideology, along with unrealistic economic models of perfect information, perfect competition, and perfect markets, fostered lax regulation, and campaign contributions helped the political process along. The banks misjudged risk, wildly overleveraged, and paid their executives handsomely for being short‐sighted; lax regulation let them get away with it—putting at risk the entire economy. The mortgage brokers neglected due (...) diligence, since they would not bear the risk of default once their mortgages had been securitized and sold to others. Others can be blamed: the ratings agencies that judged subprime securities as investment grade; the Fed, which contributed low interest rates; the Bush administration, whose Iraq war and tax cuts for the rich made low interest rates necessary. But low interest rates can be a boon; it was the financial institutions that turned them into a bust. (shrink)

The Ukrainian legislator’s differentiation of criminal liability for certain manifestations of collaboration has led to unjustified competition and considerable difficulties in qualifying the relevant unlawful acts. The purpose of this study was to analyse the specific features of criminal liability for aiding and abetting the aggressor state in the national and international dimensions. To complete the tasks of this study, a set of scientific methods was employed: dogmatic – in the analysis of legal constructions of elements of collaboration and (...) abetting the aggressor state; comparative legal – in the context of comparing the rules on liability for collaboration and the rules of international humanitarian law. The study showed that Ukrainian criminal law theory and court practice have not developed consistent approaches to the application of the rules on liability for collaboration. The study focused on the fact that the criminal legislation of Ukraine applies an approach whereby certain types of economic collaboration are factually identified with military collaboration, which does not follow international humanitarian law. It was concluded that when qualifying the transfer of material resources to representatives of the aggressor state, there is a competition between the provisions of Part 4 of Article 111- 1 and Article 111-2 of the Criminal Code of Ukraine. In such a situation, it is reasonable to apply the rule on liability for collaboration. It was found that the payment of taxes, fees, and other mandatory payments to the Russian budget of any level, made in the occupied territory of Ukraine by a citizen of Ukraine, a foreigner, a stateless person for themselves and/or in the interests of legal entities registered in the territory of the Russian Federation cannot be covered by the objective side of abetting the aggressor state, as it does not follow international humanitarian law and does not contain such a feature as voluntariness, which is a mandatory feature of the crime under Article 111-2 of the Criminal Code of Ukraine. The practical significance of this study lies in defining certain rules for qualifying aiding and abetting the aggressor state which may be used by pre-trial investigation authorities in the legal assessment of such behaviour. (shrink)

We are already witnessing the emergence of a new economic paradigm - the sharing economy - that will radical transform way of life of society. The new economic paradigm is based on the values of a post-modern society - the imperative of sustainable development models, the growth of meaningful consumption and the development of new types of solidarity. The diversity of business and non-profit sharing services is a result of the growing areas of the sharing economy, the improvement of the (...) technological infrastructure. The sharing economy takes place in organized systems or networks, in which participants conduct sharing activities in the form of renting, lending, trading, bartering, donation and swapping of different physical and non-material resources. The sharing economy framework is an "umbrella" concept. This approach generates not only problems, but has benefits. "Flexible" methodologies that focus on the process of changing sharing practices provide great opportunities for understanding current socio-economic changes and making trustworthy forecasts. Global and country-specific factors determinate the development of sharing projects. Specific factors can include specific tax regimes; expansion of foreign digital platforms that popularize the culture of sharing, socio-cultural practices of non-market exchanges that have developed in countries, which are easily transferred and scaled from an offline to an online, etc. Russian authorities provide the best competitive conditions for sharing services, increase participants' trust, provide information support and promotion. The lack of state support for some sharing sector leads to a slower its development. (shrink)

An arms race for an artificial general intelligence would be detrimental for and even pose an existential threat to humanity if it results in an unfriendly AGI. In this paper, an all-pay contest model is developed to derive implications for public policy to avoid such an outcome. It is established that, in a winner-takes-all race, where players must invest in R&D, only the most competitive teams will participate. Thus, given the difficulty of AGI, the number of competing teams is unlikely (...) ever to be very large. It is also established that the intention of teams competing in an AGI race, as well as the possibility of an intermediate outcome, is important. The possibility of an intermediate prize will raise the probability of finding the dominant AGI application and, hence, will make public control more urgent. It is recommended that the danger of an unfriendly AGI can be reduced by taxing AI and using public procurement. This would reduce the pay-off of contestants, raise the amount of R&D needed to compete, and coordinate and incentivize co-operation. This will help to alleviate the control and political problems in AI. Future research is needed to elaborate the design of systems of public procurement of AI innovation and for appropriately adjusting the legal frameworks underpinning high-tech innovation, in particular dealing with patenting by AI. (shrink)

State ownership, worker ownership, and household ownership are the three main forms in which productive assets (firms) can be held. I argue that worker ownership is not wise in economies with high capital-labor ratios, for it forces the worker to concentrate all her assets in one firm. I review the coupon economy that I proposed in 1994, and express reservations that it could work: greedy people would be able to circumvent its purpose of preventing the concentration of corporate wealth. Although (...) extremely high corporate salaries are the norm today, I argue these are competitive and market determined, a consequence of the gargantuan size of firms. It would, however, be possible to tax such salaries at high rates, because the labor - supply response would be small. The social-democratic model remains the best one, to date, for producing a relatively egalitarian outcome, and it relies on solidarity, redistribution, and private ownership of firms. Whether a solidaristic social ethos can develop without a conflagration, such as the second world war, which not only united populations in the war effort, but also wiped out substantial middle-class wealth in Europe - thus engendering the post-war movement towards social - insurance is an open question. (shrink)

My name is Doug Adam. I am a convicted felon. I turned myself in, in mid-1987, to a U.S. attorney in New York, pleading guilty to felony charges of tax fraud and fraud on a mutual fund. It leftme scared to death, millions of dollars in debt, with no job, and at the age of37 back living with my parents while I awaited sentencing. What began then was a painful process of self discovery. After thriving on competition and perfection (...) all my life, how could I admit I wasn't perfect? Perfection wasn't even close. I was a felon. (shrink)

Since 1974 Belgian traditional sectors have been facing important financial difficulties, which compelled them to seek both increased productivity through more capital intensive techniques, and goods with higher valued added.This twofold evolution implied investments and job-reductions that could hardly have been possible without adequate public policies. As far as steel and textile are concerned those policies used mainly a common scheme based on public financial intervention and social measures. Public financial support required to cover annual losses and investments consisted of (...) either grants or state equities. It amounted to over 200 billions BEF.Besides, policies were designed in favour of people losing their jobs : early retirement was made possible and was even accompanied with tax cuts. However the budgetary cost of those policies is very high, they may be considered successful as Belgian producers now seem able to stand unternational competition. (shrink)

A collection of essays on economic policy in the open economy. If a country is opening up its economy, that is, allowing its domestic production to become competitive with that of the rest of the world, how do policy choices critically influence its economic performance? This book highlights the choices that can be made in several areas: monetary policy, exchange-rate policy, financial reform, protection, tax reform, and foreign capital. It includes detailed case-studies of Nigeria and Bolivia.

'This book is an excellent, theoretically sound and politically relevant reader', Professor Wolfschaefer, Universitat des Bundeswehr, Hamburg 'Up to date complete overview of European monetary and fiscal policy issues. Highly readable, good mix of theory and data' 'I think the book contains a wealth of useful, precise information, presented in a straightforward, readable way in a quintessentially comparative perspective', Dr M Mclean, Royal Holloway University 'Excellent treatment - quite comprehensive, full references, accessible for non-economists', Charlotte Bretherton, Liverpool John Moores Univesity (...) 'A useful addition to student literature', MJ Macmillan, Exeter University 'This is a top class book and does not limit itself to assessing the adequacy of the European political economy to the precepts of advanced monetary economics...This book is an excellent tool for teaching EMU economics, and raising the level of EMU economics in the reaserch-field of international political economy. Students and scholars will appreciate the explicit assessment the authors make of complex economic issues, and their unbiased stance in the study of EMU economic and political interplay.' Miriam L.Campamella, Jean Monnet Professor, Faculty of Political Science, University of Turin. ECSA Review, Winter 2001This textbook offers a fresh and comprehensive examination of European monetary and fiscal policy in the third stage of Economic and Monetary Union. Professors Eijffinger and de Haan give a brief history of European economic integration before the transition to EMU, and continue with a comprehensive analysis of institutions, legislation, and policies. Their analysis includes the functions and goals of the European Central Bank, the Treaty on European Union, the Stability and Growth Pact, and the harmonization of taxes. Other topics discussed include the targets and instruments of European monetary policy, the integration of European financial markets, and the competition between financial institutions in Europe. (shrink)

Recent studies of conceptual metaphors in a legal context have often dealt with the power of embodiment. However, the connotations of culturally originated metaphors could be different when they appear in laws and regulations. In particular, the role of metaphor when the legislator wishes to define intention in hybrid organizations is investigated here. The case studied is how a conceptual metaphor of ‘business’ manifesting itself in the Swedish simile adjective affärsmässig has spread over 40 years. ‘Business’ early on acquired connotations (...) such as impartiality and methodical approach, and can be used metaphorically. Introduced in the regulation of public procurement, ‘businesslike’ was later used to regulate conflicts of interest, restrict state aid and also entered tax legislation. Analysis of Swedish court decisions where ‘businesslike’ occurs shows how the emphasis has shifted from public sector efficiency to neo-liberal principles of competition, while stronger social norms related to environmental effects have led to the term being removed from the Public Procurement Act. Elements of a mixed jurisdiction arise from reliance on EU case-law, and national use of ambiguous cultural metaphors in legal texts and court decisions is a plausible response. (shrink)

This article and the following ones by Slife and Westerman represent a coordinated effort on the authors' part to begin to mine the resources of what has been termed the "practice turn in contemporary theory" for psychology. The liberal approach tends to focus on a fear of power and how it can corrupt our best ideals, while the postmodernist tends to focus on a fascination with power flowing through the social and institutional expressions of these very ideals. Given modern Western (...) culture's deep antiauthoritarian tenor, these two responses can be seen as reflecting what might be termed an underlying "control or be controlled" dilemma. We suggest the practice turn and hermeneutics offer an avenue for effectively getting past this basic dilemma. They make it clear that in everyday life, we are both profoundly shaped and influenced by the world and other people and influence them, in turn, by the way we interpret them and adjust to them as we engage in the fields of practices in which we find ourselves. Personal and social influences at play in the everyday business of human living create a continuum rather than a dichotomy regarding issues of control and power, leading to a dissolution of our taxing "control or be controlled" dilemma. Such an ontology clearly entails rethinking some prominent cultural ideals, leading us perhaps to think as much or more in terms of character than achievement, of cooperation than competition, of patience than striving restlessly to get somewhere. 2012 APA, all rights reserved). (shrink)

Abstract Conventional wisdom holds that the rigors of fiscal competition unleashed by globalization are forcing governments to roll back welfare programs, reduce or eliminate taxes on capital, and reduce regulation on mobile assets. In Freer Markets, More Rules, Steven Vogel attacks the latter contention, arguing that regulatory reform has been more often reregulatory than deregulatory, though it is generally undertaken with an eye to increasing market competition. He also maintains that governments have acted autonomously of social interests and (...) market pressures in formulating regulatory reform. While Vogel is mistaken to contend that there has been no net reduction of government control worldwide, his revision of the conventional wisdom requires a fresh look at how susceptible states really are to the global competition for revenue. (shrink)

Based on the perspective of the regional innovation system, this study constructs an analytical framework for the influence of government R&D funding on regional innovation quality and uses 283 Chinese cities as research samples to empirically test the influence of government R&D funding methods such as subsidies and tax preferences on regional innovation quality by the spatial Durbin model. According to the study, China’s regional innovation quality has a positive spatial correlation. Subsidies can improve regional innovation quality, which is mainly (...) realized by increasing the input of innovation resources from local direct innovation subjects, attracting the inflow of innovation resources from neighboring areas, and increasing the innovation support from local indirect innovation subjects. Besides, spatial competition for subsidies makes it beneficial to improve the regional innovation quality in neighboring regions, while the promotion effect of tax preferences is not significant. When considering the heterogeneity of the city location and administrative hierarchy, it shows that the government R&D funding cannot improve the innovation quality of the Eastern cities and higher-administrative-hierarchy cities, while it can improve that of the Middle and Western cities and general-administrative-hierarchy cities. Furthermore, government R&D funding widens the gap of regional innovation quality, which may be related to the existing “insufficient intervention” and “excessive intervention” of government R&D funding. This study provides insights into the implementation of R&D funding by the government to promote the development of regional innovation quality. (shrink)