What Is Really Wrong With Global Tax Governance And How To Properly Fix It

During the course of the last 100 years, the wealthiest and most powerful nations on the planet have systematically gathered around in small groups of experts, scientific committees and working parties, under the auspices of the League of Nations and the OECD, to decide on the appropriate tax policy norms for global implementation. The immediate consequence was, and still is, the creation of an exclusionary architecture that deprives the majority of the world's countries from meaningfully influencing legal-institutional choices vis-à-vis what countries should tax cross-border transactions, a process that has clear global distributional implications. This article sets off to investigate this process of exclusion. It identifies two central elements that constrain broad participation in global tax governance, engendering the under-representation of the interests of developing countries: expertise and power. As further argued, the international tax arena is better understood as an entrenched political space, where influential actors maintain their privileged positions by dominating the debate and decision-making procedures. The author then proceeds to analyse possible remedies to this cartelistic and bureaucratic club model of international taxation governance, such as the creation of new intergovernmental organizations or forums, concluding that all proposals so far end up reproducing the same top-down technocratic mentality embedded in the work of the League of Nations and the OECD. Rejecting old and new solutions for a just world tax order, what the author believes is actually needed is a completely different approach, grounded on contested multilateral practices and diversity of world views. Using critical legal theory, the goal is to provide an alternative way to think (politically) about fiscal relations among developed and developing states.Full-text Paper.

During the course of the last 100 years, the wealthiest and most powerful nations on the planet have systematically gathered around in small groups of experts, scientific committees and working parties, under the auspices of the League of Nations and the OECD, to decide on the appropriate tax policy norms for global implementation. The immediate consequence was, and still is, the creation of an exclusionary architecture that deprives the majority of the world's countries from meaningfully influencing legal-institutional choices vis-à-vis what countries should tax cross-border transactions, a process that has clear global distributional implications. This article sets off to investigate this process of exclusion. It identifies two central elements that constrain broad participation in global tax governance, engendering the under-representation of the interests of developing countries: expertise and power. As further argued, the international tax arena is better understood as an entrenched political space, where influential actors maintain their privileged positions by dominating the debate and decision-making procedures. The author then proceeds to analyse possible remedies to this cartelistic and bureaucratic club model of international taxation governance, such as the creation of new intergovernmental organizations or forums, concluding that all proposals so far end up reproducing the same top-down technocratic mentality embedded in the work of the League of Nations and the OECD. Rejecting old and new solutions for a just world tax order, what the author believes is actually needed is a completely different approach, grounded on contested multilateral practices and diversity of world views. Using critical legal theory, the goal is to provide an alternative way to think (politically) about fiscal relations among developed and developing states.

High-profile scandals and increasing public debt after the financial crisis have put international taxation high on the political agenda. This book offers a rare combination of empirical analysis with normative and institutional proposals for global tax governance.

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.

Why has global tax governance been politicized and how can we explain the varying intensity and content of public debates? This book offers an integrated theory of the politicization of international institutions and a detailed account of how the institutional design and policy output of tax governance by the EU and OECD have developed over time. Offering the first in-depth empirical analysis to compare politicization across international institutions, it blends institutionalist explanations that focus on the growing authority of international institutions, and sociological and political economy approaches that take into account domestic context. Exploring why and how international institutions have become increasingly contested in the 21st century, this book will be of particular interest to the scholars of the transfer of authority from the nation-state to international institutions, and the societal repercussions and political struggles that connect these processes. Researchers in the fields of political science, international relations, sociology, and political communication will also find it useful and insightful.

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.

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 systems, and aggravates the inequality between developed and developing countries. Further, I demonstrate that the effects of international tax competition are unjust irrespective of whether a globalist or less demanding internationalist perspective on justice is adopted. The minimum requirement of justice is to devise global rules which ensure that national tax systems remain capable to implement distributive justice as they see fit. Finally, I present and discuss a concrete proposal for the global governance of business tax competition, namely, unitary taxation with formula apportionment.