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