This only as a hypothetical; a what if to which I do not have all the answers and have not considered all the angles. I know, at the very least, that the idea will give nightmares to people who fear black helicopters.
I wonder if we couldn’t make life simpler by having taxes on international corporations collected at the international level and fairly re-distributed.
Currently, there is a race to the bottom. The nations of the world are under pressure to keep corporate taxes low. There are in competition with other countries to see who can have the lowest rates, keep the corporations they have and maybe attract new ones.
For their part, companies shift assets and corporate offices to reduce their tax burden. Tim Horton's and the Hudson Bay Company do business primarily in Canada but are US owned. Haliburton received billions in US government contracts for the wars in Iraq and Afghanistan. They then rewarded the US by moving their head office to Dubai. Other companies simply hide assets overseas to keep the tax man away.
What if we ended the competition and the shell game and set a single, global rate for corporate taxes? What if those taxes collected by a new office under the banner of the United Nations? Each member state would then be responsible for reporting and prosecuting tax evaders.
Distributing the funds would no doubt be complicated. By the time the politicians finish haggling over the terms, it will take a team of lawyers and accountants months to decrypt it.
However, in an ideal world, it might go like this:
The United Nations itself keeps a small percentage to cover the cost of enforcement and increase its own budget. This would mean a larger budget for things like peacekeeping and disaster relief.
The UN would divide the remaining funds into two halves. The agency would distribute half the funds based on the size of a country's economy. This would appease the world's wealthier economies. It would also provide an incentive to create healthy economic conditions.
The other half of the distribution would be on a per-capita basis. This would allow developing nations to develop more rapidly. It would provide funds for infrastructure, education, health care and other important foundations of modern society. Over the long term, this would also boost the overall global economy, increasing the size of the pie.
Such a system would have the benefit of making sanctions against aggressive states or ‘relief’ for nations in jeopardy an easy matter. With authorization from the appropriate body, UN accountants could simply increase or decrease the size of cheques.
It would end the race to the bottom that sees countries compete with each other by reducing tax revenue. Instead, corporations would locate their assets based on things like infrastructure and eduction level. Governments, in turn, would have the funds to improve those areas - turning a race to the bottom into a race to the top.
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