Friday, October 18, 2013

IMF: the international tax framework is broken. Listen up, OECD!

From the IMF's Fiscal Monitor, what looks to us like an indirect swipe at the OECD:
"Recognition that the international tax framework is broken is long overdue. Though the amount is hard to quantify, significant revenue can also be gained from reforming it. This is particularly important for developing countries, given their greater reliance on corporate taxation, with revenue from this taxation often coming from a handful of multinationals."
Which is just what we've been saying all along.
"Scope seems to exist in many advanced economies to raise more revenue from the top of the income distribution (and in some cases meet a nontrivial share of adjustment needs), if so desired. And there is a strong case in most countries, advanced or developing, for raising substantially more from property taxes (though this is best done when property markets are reasonably resilient).

In principle, taxes on wealth also offer significant revenue potential at relatively low efficiency costs.

Their past performance is far from encouraging, but this could change as increased public interest and stepped-up international cooperation build support and reduce evasion opportunities. Reforming international taxation will be harder, as it must go beyond the control of tax-minimizing tricks to address more fundamental aspects such as the allocation of tax bases across countries and finding better ways to realize mutual gains from closer cooperation in tax matters."
We don't agree with everything in this report, but this stuff is spot on. Hat tip: Astrid Wiesemann, via Markus Meinzer.

Update 2014: For resources and information on corporate tax, see here.


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