Tax Competition and Inequality - The Case for Global Tax Governance

Global Governance: A Review of Multilateralism and International Institutions, Vol. 17, 2011

39 Pages Posted: 19 Oct 2009 Last revised: 4 Feb 2011

Thomas Rixen

University of Bamberg - Department of Political Science

Date Written: December 13, 2010

Abstract

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.

Keywords: international taxation, tax competition, global justice

JEL Classification: H83

Suggested Citation

Rixen, Thomas, Tax Competition and Inequality - The Case for Global Tax Governance (December 13, 2010). Global Governance: A Review of Multilateralism and International Institutions, Vol. 17, 2011. Available at SSRN: https://ssrn.com/abstract=1488066 or http://dx.doi.org/10.2139/ssrn.1488066

Thomas Rixen (Contact Author)

University of Bamberg - Department of Political Science ( email )

Feldkirchenstrasse 21
96045 Bamberg
Germany

Paper statistics

Downloads
590
Rank
36,037
Abstract Views
2,796