Global Concerns - 9 - Corporate Tax Abuse

1. Almost all of the largest corporations own hundreds (and in some cases thousands) of offshore subsidiary companies in Tax Havens and low tax jurisdictions. By doing business through these they avoid paying tax to the countries in which they operate and from which they extract their massive profits.
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2. The scale of the world's current economic problems is very large, but not when compared with the scale of corporate Tax avoidance. Just one example : Each year the total tax which corporates fail to pay in developing countries (from which they extract large profits) is far greater than the global amount of Aid given to all those countries by the whole of the international community.

3. So, while ordinary taxpayers around the world are paying Tax so that Aid from their own country can be used to help the poorest countries, the corporates are not paying their taxes to developing countries - or to developed countries. Instead, they are evading and avoiding Tax on a massive scale. Governments and international bodies (e.g. : the IMF, the WTO, World Bank, UN, EU, ECB, ASEAN, G7, G20, etc) are the architects of the international order that have allowed this to come about - and they are all taking steps to 'free up' corporations even more. Among these steps are the introduction of massive 'trade deals' such as the Trans Pacific Partnership (TPP) and the Transatlantic Trade and Investment Partnership (TTIP). These all contains multiple measures which 'free up' corporations to expand their people and planet-wrecking activities, simply in order to make more money for the already rich.

4. One result is that problems such as poverty, poor health, high child mortality and low life expectation persist in developing countries because the infrastructure needed to remove these problems cannot be afforded by those countries.
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5. Corporate tax abuse such as this is made possible by politicians and governments being willing to enact and leave unchanged Tax laws and other laws that allow it to happen. It is not an accident and it is not an unintended consequence of legislation. It is a core part of the fabric of a neoliberal economy.

6. This is a massive problem, not only in the capitalist 'west'. A report from Global Financial Integrity finds that China lost $3.79 trillion in illicit financial flows from 2000-2011. The report finds that crime, corruption, and tax evasion on a massive scale drive Chinese inequality and threaten the nation's economy.