Publisher's Synopsis
From the Foreword, by Maria João Rodrigues, President of FEPS (Foundation for European Progressive Studies), Member of the European Parliament and Vice-Chair of the Socialists and Democrats Group:
This book, which is the fruit of a collaboration between FEPS and TASC, serves the purpose of contributing to serious reflection on the need for a common platform able to deliver a sounder corporate taxation system for the EU.
The chapters together provide a timely contribution to the debate on increasing inequality and the role of relatively wealthy MNEs through their special arrangements to reduce their tax payments. At times, as the Panama Papers and the LuxLeaks proved, companies engage in illegal behaviours (e.g. money laundering, tax dodging, establishing bogus offshore companies) but most of the special arrangements relate to tax avoidance. In our tax systems, there is room for exploiting loopholes, differences in tax regimes and accounting practices so that sufficiently big corporations are able to legally avoid paying the statutory corporate income tax. The unsurprising results are: 1) increasing inequality due to the unfair competition between big and small corporations, which do not have subsidiaries abroad between which to switch profits, intellectual properties and so on; 2) increasing inequality due to the heavier burden on labour incomes and consumption; and 3) the loss of
potentially useful public revenues at a time when public budgets are tight and there is a need to re- launch the economy with forward-looking investment.
In this context, the chapters of Upsetting the Apple Cart together offer a new way of approaching these important issues of our time:
- What to do about the problem of taxation of multinationals;
- How countries that have elements of tax havens facilitate tax avoidance;
- Whether international agreements can lead to better control of MNE activity;
- How industrial policy can be developed other than through tax policies.
The reader will be provided with a description and analysis of the situation in Ireland complemented with an interesting look at its effect on the EU. Indeed, Ireland has famously led the way in having a low corporate tax rate. In some ways Ireland can be seen as the champion of a race to the bottom, which should be put to an end.
