Tax Inversion - How US Companies Buy Tax Breaks
Feb 3, 2015 9:43 AM EST
The international political community continues to make the most threatening noises about those who they believe do not pay enough tax. Long gone it seems are the days where it was accepted that a person could properly organise his affairs in such a way that the minimum tax lawfully due was paid to the Revenue Services. The voice of the press and politicians means that tax continues to be at the forefront of the public consciousness. There is discernable shift in the attitude of societies to the morality of avoiding the payment of tax. The distinction between tax avoidance, which is lawful, and tax evasion, which is unlawful and criminal, is apparently being quickly forgotten. Politicians no longer speak of the criminality of evasion but the immorality of avoiding tax. It would be foolish to ignore that shift in language.
In our previous post, we looked at the ways that global corporations minimise their tax burdens by routing income through offshore tax havens and transfer pricing. The ultimate beneficiaries of these shenanigans, of course, are actual people rather than legal entities. Many of these people also take advantage of offshore tax havens to avoid reporting capital income to local authorities. In this second post, we will look at how Gabriel Zucman tracks this hidden wealth and his suggestions for governments to capture missing revenue.
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