We have been following the G20 ‘get those naughty multinationals in the tax tent’ debates raging for a few months now, with amusement we have to add; here at theMarketSoul and have the following short thought piece to contribute to the debate.
We know the ‘outrage’ really is all about the what the OECD calls the ‘general erosion of the tax base’, which in our opinion is just a distraction for proper structural reforms in the western democracies contributing to the G20 and OECD coffers.
The real issue is the power of civil society structures, such as multinational corporations, versus nation states. We constantly get an earful on how undemocratic corporations are from a liberal social leftist media and how dangerous unfettered corporate power is.
Yet, multinationals are far more democratic, in both structure and performance, than any sovereign government will ever be. If the corporate governance structure is correctly set up, then every corporate entity has an annual AGM at which point the corporate leaders have to resign, on a rotational basis, depending on individual Articles of Association or Memorandum ofIincorporation provisions (depending in which jurisdiction the corporate entity ‘resides’). How often does a sovereign leader stand down, in comparison and leave it to the popular vote to be re-elected? Certainly not on an annual basis, as is the case for most corporate leaders.
This leads us to the real thought piece of this article, namely the fact that corporate ownership and access to corporate ownership should really be extended to as wide a base as possible, rather than a few ‘monied’ or opportunist participants in the market.
Legislation around employee share ownership schemes are still very cumbersome and rules, rather than principles driven.
The real revolution we require is not around a new tax base or recapitalizing democratic bankrupt nation states; however we require a revolution of democratic corporate ownership to sweep the length and breadth of the land, in order to spread the risk, add additional wealth creation opportunities (and hence a widened wealth tax base) for smaller, leaner and meaner governments to address. This a cry from civil society to the inner ‘goodness’ of political society to sit up, take serious stock and work on longer-term solutions to the erosion of their tax bases, rather than the usual headline grabbing short-termist market distorting interventions the G20 governments are so infamous.
- G20 report warns of global tax chaos (guardian.co.uk)
- Can the G20 Make Multinationals Pay Tax? (forbes.com)
- G20 report warns of global tax chaos (talesfromthelou.wordpress.com)
- G20 finance plan targets taxes from multinationals (miamiherald.com)
- The July Tax Podcast: listen now (taxresearch.org.uk)
- US blocks crackdown on tax avoidance by net firms like Google and Amazon (guardian.co.uk)
- OECD tax proposals offer G20 ‘once in a century’ chance to fix creaking system (guardian.co.uk)
- G20 agrees to fight against international tax evasion by multinational companies (en.mercopress.com)
- G20 Ministers Push for More Growth and Jobs (hispanicbusiness.com)
- OECD Promises to Stop Tax Evasion (hispanicbusiness.com)