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Taxing in the real world

Taxing in the real world. Why taxation is superior to voluntary contributions such as philanthropy and CSR. Church and Taxation???. Ambition and Pragmatism. Skeptical interventions. More money than ever – in tax havens. Absolute payments and relative burden of the wealthy.

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Taxing in the real world

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  1. Taxing in the real world Whytaxationis superior tovoluntarycontributions such asphilanthropy and CSR

  2. Church and Taxation???

  3. Ambition and Pragmatism

  4. Skepticalinterventions • More moneythanever – in tax havens

  5. Absolute paymentsand relative burdenofthewealthy

  6. Alleviatingtheburdenforthewealthy

  7. Howwealthyarethewealthy? Zucman, G. et al. (Sept. 2017) Tax Evasion andInequality

  8. Skepticalinterventsions • More moneythanever – in tax havens • Philanthropyand CSR vs. Governmentanddemocracy • Free-Ridingandthe Common-Wealth • „Spaceship“ and Prison oftheWealthy

  9. A worldofitsown • As ourfindingssuggest, thepursuitofself-interestis a more fundamental motiveamongsociety’selite, andtheincreasedwantassociatedwithgreaterwealthandstatuscan promote wrongdoing. (Paul Piff) • (M)ostmillionairesdon’thaveenoughwealthtofeelsecure. As a result, manyfeel stuck on a treadmill, without a real sense ofhowmuchwealthwouldmakethemsatisfiedenoughtoget off. Millionaires’ constantstrivingcomesmainlyfrompressuretheyfeeltomaintainthehighstandardoflivingtheyhaveestablishedfortheirfamilies, whomtheyvalueabove all else. (UBS) • Millennialsaremoreinsecureandconsciousabouthowtheirwealthcomparestothatofpeers …. With so muchoftheirpeers’ lifestyleandspendinginformationavailable online andthroughsocialmedia, Millennialsaremostlikelytosaytheyfeelpressureto “keepupwiththeJoneses.” This sense ofcompetitionmanifestsitself in theircareerdecisionsand personal behavior. (UBS)

  10. Skepticalinterventions • More moneythanever – in tax havens • Philanthropyand CSR vs. Governmentanddemocracy • Free-Ridingandthe Common-Wealth • „Spaceship“ and Prison oftheWealthy • Wealthandpolitical power

  11. Lobbyism at work (1)

  12. Lobbyismus at work (2) Piketty/ Supreme Court verdict 2013/14 Status second half of 2015 Alexander Leipold Ergebnisse einer Diskursnetzwerkanalyse zur Debatte um die Reform der Erbschaftsteuer in Deutschland, 2013-2016

  13. Inheritance Tax-Reform: Whomdoesthe FAZ quote? Quelle: Alexander Leipold

  14. SkepticalResume Around 2000 a survey in the USA found that with existing legislation UHNWIs handed out 16% to Charities, 47% to heirs, 37% to the state. Could they do as they like, they would give 26% to Charities, 64% to heirs and only 9% to the state. (Shervish/Boston College survey among 112 US-UHNWIs, in Collins/Gates)

  15. Historicbackgroundof CST • Starting Mid-19th Century, at a time ofhightenedtensionbetween „Capital and Labour“ • Method: See – Judge – Act • Historicimplementation: Germany and Austria

  16. Income distribution Germany CatholicSocial Teaching –Ordoliberalism (ca. until 1989) Neoliberalism (1989 onwards)

  17. The „Bolte Onion“, i.e. incomedistributionupto 1989 and thethinningof German middleclasssince 1989

  18. How CST operates

  19. Values and principlesof Catholic Social Teaching

  20. Relevant frameworkconditions • Iustitialegislativa et commutative (Legislative and commutativejustice) • Start withrealities • Think global, not national • Think complexaboutinstrumentsreducingpoverty • Lesstaxinjusticeratherthanmoretaxjustice

  21. Taxes: More than just money! • Generating revenue for public investment and financing of public goods and services • Generating funds for redistribution, empower the poor, reduce inequality • Putting a prize on so-far “unprized externalities” (Pigovian Taxes), thus reducing environmental degradation as well as other damaging products and behaviour • Redirecting private and corporate funds into more just and sustainable investment. • Assisting the transformation towards a socially more just and ecologically more sustainable model for economy and society.

  22. Prior tonewlaws: Enforcetheexisting • Combat illegal and illicitactivities • Replacetaxcompetitionwithtaxcooperation • End tax havens • Public transparencyof tax haven Shell Companies, Trusts, SPVs • Equaltransparencyof all personstowards tax administrations • Public transparencyof TNCs (publicCbCR) • Transparencyof TNC-UBOs towards tax administrations • Transparencyof real estateorfinancialassetownership (?) • Adequatestaffingfor investigative and enforcementauthorities • Specificunitsfor TNCs, HNWIs and UHNWIs • ProtectionofWhistleblower

  23. Diminishinequality, secureparticipationof all • Level playingfieldfor all in business • Review taxbase, taxprivileges and businesses • Principleof Ability to Pay, progressive directtaxation

  24. Shiftingthe tax burden

  25. Relative taxburden, due todirect and indirecttaxationaswellasmandatory SSCs Bach u.a. (2016) Wer trägt die Ungleichheit in Deutschland?

  26. Diminishinequality, secureparticipationof all • Level playingfieldfor all in business • Review taxbase, taxprivileges and businesses • Principleof Ability to Pay, progressive taxation • Earned and unearnedincome Wealth Tax • Prevent accumulation and power in thehandsoffew Inheritance/Estate and Gift Tax

  27. Install pro-poorpolicies

  28. Advance socio-ecologicaltransformation • Adjustpublicspending • Use taxtoencourageinvestmentadvancing social justice and ecologicalsustainability • Use PigovianTaxesforcurbingdamagingbehaviour • Identifynew and contemporarysourcesoftaxation • Handle thechange in human labour (Unconditio-nal Income Grant? Social Engagement Stipend…) • The specialissueofland?

  29. Outlook • Tax and enforcementinstitutionsare strong institutionsofthestate • Thereiswideagreement on fightingillicit and illegal practices • Thereiswideagreementtoaddressclimatechange

  30. Summary • In the real world with real people I am of the opinion that contributions to the common good should not primarily moral and voluntary, but legal and mandatory, which is why aggressive tax avoidance and tax evasion and other tax related crimes need to be curbed. • Taxes should be according the Principles of Ability to Pay, which supports progressive taxation rather than Flat Taxes. • Direct taxes are preferable towards indirect taxes, because the latter disadvantage over proportionately the poor • Unearned income and wealth needs to be taxed more heavily than earned income and wealth. • Taxes and levies could be one way to curb the over-exploitation of natural goods and/or push back damaging consumption, e.g. Carbon Fuels. • In order to make this happen, tax administrations and investigative bodies into financial crime need to be adequately staffed and equipped, including legal instruments which enable them to do their national and transborder job.

  31. https://www.youtube.com/watch?v=paaen3b44XY

  32. www.taxjustice-and-poverty.org

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