Winter School in Political Economy

Lecture 3

Inequality

Where do we stand

• 1985 to 2019 decrease from 49% to 23% in the global average statutory corporate tax rate
• Largely driven by tax competition – race to the bottom
• Distinction between real and nominal tax rate
• Distinction between optimisation and avoidance
• Weak international efforts

Direction of change

• Tax deficit
  • as if all profits were subject to min rate
  • min rate at 21% for foreign earning of US MNC
  • CIT in US at 28%
  • tax collector of last resort
• Coordination through OECD and G20
  • moving ahead of BEPS
• Unilateral actions against non-adopting tax havens

Thank you and see you in the Q&A