Globalisation Press Releases
Under Attack: Development and Democracy
Large corporations and wealthy individuals are increasingly avoiding their obligation to contribute to society through taxation. With the aid of governments, they are shifting the tax burden further onto ordinary citizens and smaller businesses.
Governments claim that revenues are too low to achieve social justice through decent public goods and services; privatisation and cuts in social expenditure are presented as the only solutions.
Parallel universe for the rich
The scale and importance of what is happening is not widely recognised, but this is changing. Networks of academics, researchers, professionals and campaigners are joining forces to expose the threat to development and democracy that tax competition and tax havens present. States are losing sovereignty over taxation policy, as they are effectively forced to compete to attract mobile capital. Democratic control – the influence of the majority of citizens over tax policy - is fading, to be replaced by a race to the bottom in the taxation of capital over which we have no say. Taxing the rich at higher rates than the poor (progressive taxation) is rapidly becoming problematic. This not only undermines ethical tax policy - it is also economically inefficient. Mainstream theories of taxation all recommend progressive taxation as a practical and effective way to finance public goods and services. Despite economic growth, the tax revenue raised from capital is shrinking in comparison to that raised from ordinary citizens. In other words, the tax burden is shifting from the rich towards the poor. Poor countries lose billions
This shifting tax burden threatens to be particularly disastrous for the developing world. It may prevent the growth of domestic demand and internal markets; it creates unfair tax disadvantages for local businesses, encourages capital flight rather than domestic investment, stunts economic growth, and generally skews economic development towards an unsustainable reliance on foreign capital and markets. Tax competition and tax havens reduce tax revenues that could otherwise contribute to public services, development, and the reduction of poverty: an increased annual return of just 0.5% on assets held offshore could finance entirely the UN Millennium Development Goals for 2015. For more information download our briefing paper above. War on Want is a member of the Tax Justice Network. Visit their website:www.taxjustice.net/"class="url"target="_ ">www.taxjustice.net
The scale and importance of what is happening is not widely recognised, but this is changing. Networks of academics, researchers, professionals and campaigners are joining forces to expose the threat to development and democracy that tax competition and tax havens present. States are losing sovereignty over taxation policy, as they are effectively forced to compete to attract mobile capital. Democratic control – the influence of the majority of citizens over tax policy - is fading, to be replaced by a race to the bottom in the taxation of capital over which we have no say. Taxing the rich at higher rates than the poor (progressive taxation) is rapidly becoming problematic. This not only undermines ethical tax policy - it is also economically inefficient. Mainstream theories of taxation all recommend progressive taxation as a practical and effective way to finance public goods and services. Despite economic growth, the tax revenue raised from capital is shrinking in comparison to that raised from ordinary citizens. In other words, the tax burden is shifting from the rich towards the poor. Poor countries lose billions
This shifting tax burden threatens to be particularly disastrous for the developing world. It may prevent the growth of domestic demand and internal markets; it creates unfair tax disadvantages for local businesses, encourages capital flight rather than domestic investment, stunts economic growth, and generally skews economic development towards an unsustainable reliance on foreign capital and markets. Tax competition and tax havens reduce tax revenues that could otherwise contribute to public services, development, and the reduction of poverty: an increased annual return of just 0.5% on assets held offshore could finance entirely the UN Millennium Development Goals for 2015. For more information download our briefing paper above. War on Want is a member of the Tax Justice Network. Visit their website:
Download File:Also in Globalisation Press Releases:
Globalisation Press Releases
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- World Bank in stormy waters
- Under Attack: Development and Democracy
- Anti-privatisation activists meet to demand free access to water and energy
- Globalisation White Paper is 'brave attempt'
- Clare Short supports NGO’s agenda for radical change
- G8 Summit set to ignore real causes of poverty
- G8’s Summit of shame and spin
- Mobile phone fortune should go to the poor
