In a new article for International Policy and Society entitled “The G7’s tax reform could entrench global inequality,” Jayati Ghosh argues that the G7 tax reform deal doesn’t live up to the hype around it:
The G7 compromise (in its ‘second pillar’ of the tax proposal) has led to a dramatically lower minimum rate of ‘at least 15 per cent’, close to the very low rates of tax havens like Ireland and Switzerland. It would lead to dramatically lower tax revenues as well: estimates by the EU Tax Observatory suggest that projected revenues for the European Union, for example, would decline from €167.8bn at 25 per cent, to €98bn at 21 per cent to only Euro €48.3 bn at 15 per cent. For the US, the projected decline in revenues is from €165.4bn at 25 per cent to €104.4 bn at 21 per cent to only €40.7 bn at 15 per cent.
It is remarkable that G7 governments are willing to give up so much potential tax revenue that could be usefully deployed for major social and physical investment, simply because of the lobbying power of large corporations. Clearly, the public in these countries is either unaware or unwilling to demand a more just outcome.
You can read the full analysis here and listen to Ghosh speak on a panel about this topic here.
