Author Archives: phdskat

UN-doing the OECD’s global tax dominance?

For a couple of decades now, debates over the which international organisation should be in charge of organising global tax policy-making have ebbed and flowed, every once in a while heating up and surfacing in global political discussions, then fading back into isolated debates amongst selected tax stakeholders.

The classic dichotomy is one where the OECD is juxtaposed with the UN. The former is the “rich country’s club”, the informal “global tax organisation” for more than 60 years, the controller of the development of the global tax system. The latter is the “true global”, the “true inclusive” body, more favourable to developing country interests, yet severely underfunded and deprioritised because of resistance by major powers.

A history of discontent

The history of this dichotomoy traces all the way back to the 1950s when, for a brief moment in time, the United Nations did in fact take charge of coordinating international tax policy following World War II and the collapse of the League of Nations, which had birthed the first international tax rules in the 1930s. Martin Hearson’s exploration of the UN’s initial international tax work, and its subsequent downfall, is well worth reading. In short, Hearson notes, the UN’s Fiscal Commission failed due to a “failure to gather institutional momentum, in part due to the lack of effective secretariat support, and lukewarm support from across the board”. In its stead emerged the OEEC’s (later the OECD) Fiscal Commitee, which was able to gather that institutional momentum, strong leadership and coherence.

This, as Douglas Adams said, has made a lot of people very angry and has been widely regarded as a bad move.

While it has never appeared particularly likely, politically speaking, that the UN would take over from the OECD, there have been strong voices calling for the change, and becoming increasingly vocal. In recent history, UN Secretary-General Kofi Annan organised a push for a global tax organisation under the UN auspices in 2003, an idea that has been brought up over and over again at the UN. The idea was prominently reinvigorated at the 2015 Addis Ababa summit, and most recently as the G77 group of developing countries tried (and failed) once again to boost the standing and resources of the UN’s committee of tax experts.

These political attempts have been accompanied by research exploring the potential of and barriers for shifting global tax policy-making away from the OECD. From early work by Vito Tanzi, former tax chief at the IMF, to Dietsch, Rixen, Avi-Yonah and others, calls for a truly global tax organisation – far from the characteristics of the historically technically-driven, closed-off, opaque OECD – are widespread.

Political attempts have also been underpinned and supported by activist mobilisation. As early as 2005, the Tax Justice Network in its “Tax Us If You Can” report, had placed upgrading the UN tax committee among its key policy asks, alongside – read this carefully now – country-by-country reporting (which was materialised), public beneficial ownership registries (which has materialised), general anti-avoidance rules (which has materialised), automatic exchange of information (which has materialised), tax assistance for developing countries (which has materialised), and unitary taxation of corporate profits (which has materialised somewhat). (There were also asks for citizenship-based taxation and general progressiveness of taxes, which have been less succesful.) And the organisation, alongside every other civil society organisation active on the global tax agenda, has continued to be dedicated to increasing the power of the UN in global tax matters.

Yet it is clear that the UN still plays a distant second fiddle to the OECD when it comes to defining the content and direction of global tax policies. And that is perhaps for a very simple reason. This month, the South Centre published a policy brief by Abdul Chowdhary and Sol Picciotto, which tries to chart a path for “bringing the existing plethora of institutions under unified, universal and democratic control through a UN Framework Convention on Tax Cooperation”. While considering technical and institutional approaches to support such a move towards the UN, the authors ultimately concede that the key challenge is political, in that OECD countries are unlikely to give up decision-making power.

This is, incidentally, the typical charge against those pushing for the UN’s global tax power to increase: that it is utopian and unlikely due to the geopolitical balance of power. Moreover, it is hard to escape the fact that in many people’s eyes, the OECD has been remarkably successful at maintaining and developing a well-supported global tax system. In a time where multilateralism is in conflict, in global tax affairs, “states are responding to challenges since the financial crisis by coming together differently, but also – for the time being at least – more effectively“.

These considerations beg at least two questions that bear investigation. First of all, would the UN be a “better” forum than the OECD? Second, is it likely and feasible to move global tax policy-making to the UN?

Is the UN “better” than the OECD?

First, for judging whether the UN would be “better”, we need to ask what “better” means. Why is it that proponent want to more global tax policy-making to the UN, away from the OECD? The OECD’s critics are many, and critisms abound. Yet if we take a crude approach, they can be boiled down to: the OECD is not inclusive of non-OECD interests. This encompasses a lack of concern for developing country interests, and other common criticism such as OECD policy outputs being heavily influenced by a few major powers, businesses, and technical tax experts. Broadly speaking, the UN is seen as the antidote to this. “Unlike the OECD, which is a rich countries’ think tank, the UN Tax Committee is fully open to all countries, and therefore can fairly claim a legitimate mandate to represent the interests of poorer countries“, say TJN.

To assess whether the UN tax committee would, in fact, be a better place for non-OECD interests, we can consider both how the UN tax committee works now, and how the UN tax committee would work in the future if it superseded the OECD as the premier global tax policy-making forum. Those two are of course very different from each other. Today, the UN tax committee resembles the OECD way of working in several respects:

While the OECD is often contrasted with the UN Tax Committee as the latter comprises individuals and the former states, the Steering Group and the UN Tax Committee are more similar than this implies. Both are groups of around 25, mixed roughly 50/50 between OECD and non-OECD origins. Experts participate in a personal capacity and secretariats play a central role in determining group composition. Most practical work is organised through focused working groups. There is only a small overlap between the Steering Group and UN Tax Committee (two people at the time of writing), but many UN Tax Committee members are active members of OECD working parties

At the Table, Off the Menu? Assessing the Participation of Lower-Income Countries in Global Tax Negotiations

Many of the structural barriers to participation are the same, as well: Travel costs, expert capacity, language, geopolitics, and so on. However, there are important differences too, most notably in the formal mandates, resources, as well as mode of decision-making. The latter is particularly crucial: whereas the OECD works by a negotiated “consensus” mode, the UN tax committee adopts a majority vote.

These institutional differences are a key reason why the UN tax committee has undoubtedly fostered the most significant policy win for lower-income countries in global taxation in recent years, namely the inclusion of an article on technical services fees in the UN Model Tax Convention (“12A”). As colleagues and I have shown, UN-specific norms (e.g. anticipation of developing country concerns) and its decision-making structure were central to make this happen. It wouldn’t have happened at the OECD.

In that sense, it is likely that the UN tax committee, as it functions today, is “better” at developing policy outputs that are inclusive of non-OECD interests, especially developing country interests. (It is worth noting though that the diffusion and adoption of UN tax policy outputs are more limited than those of the OECD, and thus policy wins at the UN travel less far than policy wins at the OECD. It is also worth noting that, although it is not always, international tax policy is often a zero-sum game focused on the allocation of taxing rights, and as such any organisation that is better at taking care of non-OECD interests will probably also be somewhat worse at accommodating OECD interests.)

It is not likely, however, that the UN tax comittee would continue to function as it does today, if it was upgraded to a true intergovernmental body and superseded the OECD. And so perhaps the right question is whether the UN would be “better” than the OECD at representing developing country interests in the hypothetical scenario where it gains power.

This is much more speculative, but we can say with a good degree of certainty that the UN tax work would become subject to many of the same contextual factors that mark the OECD’s current tax work, including geopolitical hierarchies and politicization. Major powers would still be major powers, and thus likely to dominate policy-making in the UN, even in the face of the UN’s broader membership, which would ensure a greater number of countries around the official table than at the OECD today. And broad political interest would mean a greater level of stakeholder engagement, and thus political fighting, than in the UN committee’s current more depoliticised state. This would mean facing the difficult dilemma of inclusiveness vs. coherence. In that respect, one of the things the current UN tax committee has “going for it” is that, simply, it is the UN tax committee (and not the OECD).

How much those contextual factors, which may well limit the influence of developing countries, would then interact with (and likely weigh against) the UN’s distinct mandate, norms and decision-making, which could enable developing country influence, is anybody’s guess.

Is it feasible to trade the OECD for the UN?

In practice, the more relevant question may not be whether the UN is better, but whether it is actually possible, or even likely, that we could move global tax policy-making to the UN? For all the debate, this point is rarely considered.

As noted, the typical dismissal of any suggestion of moving global tax policy-making to the UN is that it is utopian: global power dynamics are the way they are, there is institutional inertia and path dependency etc., which mean the powerful actors that support the OECD’s dominance today will continue to do so tomorrow.

Both positions, however, are extreme. The UN will not take over from the OECD in an instant. But equally, although majors powers dominate global governance, things are not totally static. Global power shifts are empowering non-OECD countries, and so global institutions are always changing – the tax policy-making landscape too. The way global governance changes today is rarely with big booms; it is more subtle, usually with ever-more multiplex “regime complexes” characterised by overlaps in mandates and work, competition and cooperation. The global tax policy landscape is a fine example of that, not just marked by UN-OECD competition but also increasingly the EU, as well as the World Bank, the IMF and others.

Consider that, in some respects, the UN has already increased its power in global tax matters over the last years. The UN committee of tax experts has, despite limited resources and political support, managed to produce several significant policy outputs that go directly against OECD-consensus policies (the most signifcant being Article 12A of the UN model tax convention). And the committee continue to push on such agendas, including with ongoing work on an Article 12B, which, again, goes directly against OECD-consensus policies. The UN has also managed to shape discussions through its FACTI Panel, which has adopted what I have called a “European Parliament” type of approach, making political noise and using innovative activist approaches to draw attention to specific policy issues, as a way to overcome the lack of its formal decision-making authority.

This UN influence has come not necessarily at the expense of the OECD, but in addition to it. And this is an important way an empowered UN can realistically shape global tax policy-making without taking full control of it. We know that overlapping institutional work, such as that done by the UN, can put normative pressure on dominant organisations, such as the OECD, to pursue more progressive (and inclusive) policy-making.

While we cannot ascribe recent advances in the inclusiveness of global policy-making at the OECD entirely to the UN’s, the pressures placed on the OECD by non-OECD powers, in particular the G-20 and developing countries more broadly, have been key to the OECD creating its “Inclusive Framework”. The IF now encompasses more than 140 countries, and while effective participation remains an issue, a formal seat at the table is a radical change from just a few years ago when 30-something OECD countries effectively decided global tax policy on their own.

Ironically, the creation of the Inclusive Framework will probably make it less like the UN takes over a more central role in formal global tax policy-making processes, given that it will be seen as appeasing calls for more inclusiveness.

At the same time, it illustrates the succesful influence of work by the UN and others that have pushed for institutional reforms that better accommodate developing country interests. In that respect, the UN doesn’t need to take over from the OECD entirely in order to shape global tax policy-making. That path to influence is much more likely, in the short term at least, than a wholesale shift away from the OECD.

Things take time, direction of travel matters

To wrap up, the UN tax committe today has proven more capable than the OECD of accommodating developing country preferences – the stated aim of many proponent of empowering the UN tax committee. Yet, that capability would likely be somewhat limited if the UN took on the role envisioned by its supporters, taking over for the OECD, and coming to face similar structural constraints from geopolitics, politicization, and the (limited) availability of financial and expert resources.

But the UN can still be – and it has shown itself to be – effective in influencing global tax policy-making to better accommodate developing country preferences, despite its standing and resources continuing to be limited. Innovative policy outcomes like Article 12A, the FACTI Panel, and the UN’s – and the broader non-OECD community’s – role in enabling the creation of the Inclusive Framework, all evidence this point.

For proponents of a global tax body hosted by the UN, this is worth celebrating, and supporting. And it is worth recognising that things are moving further in this direction: Just 10 years ago, the UN played a smaller role than it does today.

This directional of travel matters. Any shift that empowers the UN in global tax policy is likely to be a slow, incremental process. Institutional change is part of a paradigm shift, but paradigm shifts take time. While it’s underway, we can take stock and assess how best to bring about desired preferences in both the current and future institutional environment. As we write in “At the Table, Off The Menu?“:

Achieving truly inclusive global tax governance institutions will take decades. In the meantime, a pragmatic approach entails asking which of lower-income countries’ priorities from international cooperation can be achieved through the [OECD] IF, and which require a different type of institution.

EU’s kamp mod skattely skal gentænkes fundamentalt

Indlægget er originalt bragt i Børsen.

Onsdag d. 17. februar kunne man læse her i avisen, at EU fører en “forvirret og ineffektiv” kamp mod skattely. Og det er fuldstændig rigtigt: Der er behov for, at EU’s kamp mod skattely gentænkes helt fundamentalt.

Desværre skorter det – på trods af en frodig diskussion med både danske folketingsmedlemmer, ministre, europaparlamentarikere mm. involveret på nærværende debatsider – på kvalificerede initiativer, der reelt vil gøre en forskel.

EU har potentialet til at blive en vigtig spiller i at sikre ensartede skatteregler og lige konkurrencevilkår for erhvervslivet både i og udenfor unionen, til gavn for borgere og virksomheder i Danmark og vores nabolande.

Og kampen mod skattely er helt central her. Det er, som udenrigsministeren, skatteministeren og erhvervsministeren for nylig skrev i disse spalter, et spørgsmål om “værdier, tillid og et fælles ansvar”.

Men det potentiale tynges i dag af fodslæbende politikere og skævt målrettede forslag, som måske har gode intentioner bag sig, men sjældent adresserer de grundlæggende problemer, der er med EU’s skattely-krig.

EU’s centrale initiativ mod skattely er den såkaldte sortliste, der vurderer skatteforholdene i resten af verden og karakteriserer dem som mere eller mindre harmfulde på baggrund af gennemsigtighed, fair skattekonkurrence og implementeringen af internationale standarder.

Og det lyder jo egentlig meget godt, ikke? Men listen er, kort sagt, dybt problematisk.

Tilsidesætter sund fornuft

Først og fremmest er kriterierne udformet således, at væsentlige indikatorer – som eksempelvis en selskabsskatteprocent på 0 – holdes uden for regnskabet. I stedet evalueres der f.eks. på medlemskab af internationale aftaler med tvivlsom relevans.

Dernæst er der et ensidigt fokus på små, afsides lande med få økonomiske bånd til Europa.

I dag er lande som Guam og Samoa sortlistet på trods af, at der næsten ingen virksomheder findes, som driver handel mellem Europa og de to fjerntliggende østater i Atlanterhavet.

Det gør i praksis kun en yderst marginal forskel i kampen mod skattely at sortliste sådanne lande og tvinge dem til kostbare og irrelevante reformer.

Vigtigst er det dog, at listen fundamentalt er et politisk produkt, der tilsidesætter sund fornuft og reel gennemslagskraft.

Listens udformning håndteres under hemmelige procedurer i EU’s ministerråd, som har for vane at give en særlig håndsrækning til diplomatiske venner.

Således går velkendte skattelylande fri af kritik, ligesom tætte naboer med store handelsbånd til EU gør det.

Det, selvom der i de pågældende lande findes en stor koncentration af selskaber med klassiske skatteundgåelsesstrukturer eller mangel på gennemsigtighed. Det drejer sig eksempelvis om lande som Tyrkiet, men også USA og EU’s egne medlemslande som Luxembourg og Malta.

Listen legitimerer dermed også et billede af skattely og de medfølgende problemer, som er fuldstændig løsrevet fra virkeligheden.

Den typiske fremstilling med billeder af hvide sandstrande skaber en opfattelse af, at skattely er noget, der foregår langt væk. Skal danske forbrugere og virksomheder virkelig være så optagede af skatteforholdene i Guam? Nej.

Forskningen er ganske entydig: Det er de nære skattely i og omkring EU’s handelsområde, der bør bekymre os.

Men så er det jo bare at reformere listen og dens brug, er det ikke? Her har den danske regering eksempelvis lagt op til at justere nogle af listens kriterier og sætte hårdere sanktioner ind for virksomheder, som benytter sig af de sortlistede lande.

Det er dog tvivlsomt, om det vil have nogen vægtig effekt, så længe listens snævre fokus og politiske natur består.

Som tydeligt illustreret i forløbet omkring coronahjælpepakkerne i foråret, hvor Folketinget vedtog at nægte støtte til selskaber i skattely, er det ganske svært at opdrive nogen som helst virksomheder i Danmark, som er baseret i sortlistede lande – og dermed stod et højt profileret tiltag mod skattely tilbage som ganske meningsløst.

Den eneste vej er fremad

I stedet bør man helt skrinlægge sortlisten og satse på et langt stærkere skattesamarbejde i Europa.

Du kan ikke lære en gammel hund nye kunster, som man siger – og EU’s skattely-liste er en dødssyg, aldrende hund.

Den rette vej er snarere en større koordination af regler og standarder på tværs af EU.

Derudover er der brug for en stærkere fælles strategi for både unionen og for dens engagement med omverden i forhold til udviklingen af globale standarder for god skattepolitik og kampen mod skattely.

Det første har erhvervslivet for længst opdaget, og har klart bakket op om fælles selskabsskatteregler i EU.

Som Dansk Industris skatteøkonom Bo Sandberg har skrevet her i avisen, ville det hjælpe gevaldigt på de mange gråzoner med særfordele og forskelsbehandling, som findes i dag.

Desværre har forhandlingerne herom været stillestående i årevis grundet interne uenigheder i medlemslandene.

Det er således bidende nødvendigt, at politikere både i Danmark og vores nabolande indser, at den eneste vej er fremad for europæisk skattepolitik.

Igen er forskningen tydeligt: Et effektivt, forpligtende samarbejde kan langt hen ad vejen komme os skattely til livs.

Hvis vi kan komme bare lidt i den rigtige retning, så kan det betyde store samfundsøkonomiske gevinster for både erhvervslivet og almindelige borgere på tværs af Europa.

Og det starter med en fundamental gentænkning af EU’s kamp mod skattely.

Hvilke udfordringer skaber skattely?

Denne tekst er tidligere udgivet af OmFinans i 2017.

Hvad er det for nogle udfordringer, som fænomenet ”skattely” skaber for og i et land som Danmark? Det, som der typisk er mest fokus på, er det økonomiske omfang – hvor mange skattekroner er det præcist, vi går glip af hvert år på grund af skattely? Desværre ved vi det ikke præcist – men vi har en idé om, at det i hvert fald er i milliardklassen. (Det kan du læse mere om her.) Men ud over det direkte økonomiske tab til statskassen, så er der en række væsentlige samfundsmæssige udfordringer, som skattely-fænomenet påfører lande som Danmark. Her sætter vi fokus på fem problemstillinger: Suverænitet og demokrati, fair konkurrence, skattemoral, mistillid og finansiel stabilitet.

Først kan vi anse skattely som en suverænitetstrussel. Den danske suverænitet – vores nationale selvbestemmelsesret – er indskrevet i Grundloven og er en hjertesag for mange danskere. Men de færreste er klar over, at skattely truer denne selvbestemmelsesret. Når danske borgere og selskaber, eller for den sags skyld udenlandske aktører, anvender skattely til at undslippe danske beskatning og danske regler, så mindskes det demokratiske råderum. Vores muligheder for at fastlægge hvem, hvad og hvor meget der skal beskattes indsnævres, og der udøves dermed en markant indflydelse på vores politiske såvel som økonomiske råderum.

Denne trussel er i sig selv problematisk, fordi den underminerer vores selvbestemmelsesret. Men den kan også være et væsentligt demokratisk problem. Skattely giver mulighed for, at snarrådige, ressourcestærke og mobile virksomheder og privatpersoner kan omgå danske love og regler, eksempelvis ved at sløre finansielle transaktioner og ejerskabsstrukturer, eller ved at tilbyde særligt favorable vilkår, som kun nogle kan udnytte. På den måde mister det danske folkestyre en del af sin evne til at regulere effektivt inden for egne grænser, herunder på skatteområdet. Vi kan ikke længere garantere, at alle lever op til de samme regler, og vi skubbes til at målrette vores regler efter de, som ikke kan undslippe. Det begrænser vores muligheder for at bestemme, hvordan vores samfund skal se ud, og hvem der skal betale for det.

Dernæst kan vi sige, at skattely skader den fair konkurrence – både nationalt og internationalt. Når visse selskaber og enkeltpersoner har bedre muligheder for, eller i videre udstrækning benytter sig af muligheder for, at undgå og/eller unddrage nationale regler og skat, hemmeligholde aktiver og skjule ejerskabstråde, så kommer det resten til last. Når kun nogle aktører på et konkurrencepræget marked benytter – eller kan benytte – skattely til at sænke sine omkostninger, så er der risiko for en skævvredet konkurrence. Det er ikke længere en “level playing field”. Vi ved eksempelvis, at multinationale selskaber i højere grad benytter sig af aggressiv skatteplanlægning end nationale virksomheder, at amerikanske selskaber i højere grad benytter sig af skattely end centraleuropæiske selskaber, og at det overvejende er de rigeste i samfundet, der benytter sig af skattely. Det kan være med til at skade enkeltvirksomheder i Danmark og internationalt, men også den fair markedskonkurrence generelt, og dermed skabe suboptimale økonomiske resultater. Denne konkurrenceforvridning er blandt andet årsagen til, at Europa-Kommissionen med Margrethe Vestager i spidsen har indledt en række statsstøttesager mod EU’s medlemsstater og store multinationale selskaber i løbet af 2016 og 2017.

Et tredje og relateret punkt, hvor skattely kan siges at have samfundsmæssig indflydelse, er skattemoralen. Skattemoralen er vores vilje til at betale den rigtige skat efter gældende regler. Det er en målestok for skatteunddragelsen i et samfund. Hvis skattemoralen er høj, så er unddragelsen lav. En helt central faktor i skattemoralen er social indflydelse. Hvis folk opfatter, at andre skatteydere snyder, eller at chancen for at blive fanget i snyd er lille, eller at systemet behandler folk forskelligt, så falder skattemoralen, dvs. vores vilje til at betale den rette skat. Den øgede folkelige og mediemæssige bevågenhed om skattely er med til at sætte fokus på aktivitet, som kan skade vores skattemoral. Det drejer sig både om direkte lovovertrædelser, men også om potentielt lovlige aktiviteter som kan blive anset som uansvarlige og amoralske. Konsekvensen af en faldende skattemoral er, at skatteunddragelsen øges, hvilket tvinger politikerne til at kompensere ved at hæve skatterne, således at der kan leveres det samme serviceniveau, beskatte flere aktiviteter end før, eller skære ned på de offentlige ydelser. Den typiske respons i Danmark og andetsteds har været at flytte beskatning fra kapital over på mere fastbundne aktiviteter, såsom forbrug, indkomst og bolig.

Et fjerde område af samfundsmæssig konsekvens er mistillid. Ligesom at skattely kan reducere skattemoralen fordi aktiviteter anses for uacceptable, kan skattely også reducere tilliden til politikere, institutioner, selskaber og personliggrupper. I de senere år har vi i Danmark set offentlige kampagner mod teleselskaber 3, mod McDonald’s, mod Nordea og Jyske Bank m.fl., mod rige familier, og mod politikere med aktiviteter forbundet med skattely (fx Anders Fogh). Uanset om de anklagede parter rent faktisk har ageret ulovligt, så er skaden til deres ry substantiel og til tilliden mere generelt. Men tilliden er helt essentiel for vores demokrati og vores økonomi. Mindre tillid til økonomiske og politiske aktører kan være med til at skabe økonomisk og politisk ubalance. Skattely kan kort sagt – via mistillid – blive unødvendigt dyrt for økonomien og for folkestyret, og det kan skabe vedvarende tvivl om det demokratiske fundament, som vi eksempelvis har set med den voksende politiske anti-establishment-bevægelse i Europa efter finanskrisen.

Det femte og sidste punkt, hvor skattely kan siges at have indflydelse på Danmark, vedrører den finansielle stabilitet. I kølvandet på finanskrisen har en række analyser vist, at skattely spillede en væsentlig rolle i krisens udvikling og omfang. Offshore-markeder og skattely-konstruktioner bidrog særligt til shadow banking-aktivitet, som var en afgørende faktor i at øge det samlede risiko-niveau og den samlede ustabilitet i det globale finansielle system. Særligt efter krisen har finansiel stabilitet fået en genopblomstring, og har været fokus for de væsentligste reform-initiativer for den finansielle sektor. Derfor er den uigennemsigtighed, som skattely tilbyder, og som bidrager til finansiel ustabilitet, en væsentlig risikofaktor for den danske nationale såvel som den internationale økonomi.

Der er således en række væsentlige samfundsmæssige konsekvenser ved skattely – ud over det direkte økonomiske tab til statskassen – som bør haves for øje når snakken falder på skattely. Det drejer sig særligt om konsekvenser for vores suverænitet og demokrati, den fair konkurrence, vores skattemoral, mistillid og den finansielle stabilitet.

Litteratur:

Alstadsæter, Annette, Niels Johannesen, and Gabriel Zucman. 2017. “Tax Evasion and Inequality,” May. http://gabriel-zucman.eu/files/AJZ2017.pdf.

Bjørnskov, Christian. 2012. “How Does Social Trust Affect Economic Growth?” Southern Economic Journal 78 (4): 1346–68. doi:10.4284/0038-4038-78.4.1346.

Bryan, Dick, Michael Rafferty, and Duncan Wigan. 2016. “Politics, Time and Space in the Era of Shadow Banking.” Review of International Political Economy, February, 1–26. doi:10.1080/09692290.2016.1139618.

Cullis, John, Philip Jones, and Antonio Savoia. 2012. “Social Norms and Tax Compliance: Framing the Decision to Pay Tax.” The Journal of Socio-Economics 41 (2): 159–68. doi:10.1016/j.socec.2011.12.003.

Dietsch, Peter. 2015. Catching Capital: The Ethics of Tax Competition. Oxford, New York: Oxford University Press.

Dietsch, Peter, and Thomas Rixen, eds. 2016. Global Tax Governance: What Is Wrong with It and How to Fix It. ECPR Studies in European Political Science. Colhcester: ECPR Press.

European Commission. 2017. “Tax Planning Practices.” http://ec.europa.eu/competition/state_aid/tax_rulings/index_en.html.

Habu, Katarzyna Anna. 2016. “How Aggressive Are Foreign Multinational Companies in Avoiding Corporation Tax? Evidence from UK Confidential Corporate Tax Returns.” Oxford University Centre for Business Taxation Working Paper. https://weblearn.ox.ac.uk/access/content/group/34d393d2-bc7a-46b7-8fa9-bf2c2ce8f65e/2016_17/Job%20Market/Job%20Market%20Folders/Habu_Katarzyna_JMP.pdf.

Hudson, Alan. 2000. “Offshoreness, Globalization and Sovereignty: A Postmodern Geo-Political Economy?” Transactions of the Institute of British Geographers 25 (3): 269–283.

Jones, Chris, and Yama Temouri. 2016. “The Determinants of Tax Haven FDI.” Journal of World Business 51 (2): 237–50. doi:10.1016/j.jwb.2015.09.001.

Krugman, Paul. 2009. The Return of Depression Economics and the Crisis of 2008. Reprint edition. New York: W. W. Norton & Company.

Lesage, Dries. 2010. “The G20 and Tax Havens: Maintaining the Momentum?” University of Toronto. http://www.g20.utoronto.ca/biblio/lesage-tax-havens.pdf.

Palan, Ronen. 2003. The Offshore World: Sovereign Markets, Virtual Places, and Nomad Millionaires. Ithaca: Cornell University Press.

Pickhardt, Michael, and Aloys Prinz. 2014. “Behavioral Dynamics of Tax Evasion – A Survey.” Journal of Economic Psychology 40 (February): 1–19. doi:10.1016/j.joep.2013.08.006.

Rixen, Thomas. 2011. “Tax Competition and Inequality: The Case for Global Tax Governance.” Global Governance 17 (4): 447–467.

———. 2013. “Why Reregulation after the Crisis Is Feeble: Shadow Banking, Offshore Financial Centers, and Jurisdictional Competition.” Regulation & Governance 7 (4): 435–59. doi:10.1111/rego.12024.

Torgler, Benno, and Friedrich Schneider. 2007. “What Shapes Attitudes toward Paying Taxes? Evidence from Multicultural European Countries.” Social Science Quarterly 88 (2): 443–470.

Warren, Mark E., ed. 1999. Democracy and Trust. Cambridge, UK ; New York: Cambridge University Press.

Hvad er omfanget af skattely?

Denne tekst er tidligere udgivet af OmFinans i 2017.

Hvor stort er problemet med skattely egentligt? Hvor omfattende er den finansielle gemmeleg? Og hvor mange skattekroner går Danmark hvert år glip af? I sagens natur ved vi det ikke præcist, da aktiver i skattely netop er beskyttet af uigennemsigtighed. Men ved at analysere hvor meget, der ikke optræder i de officielle statistikker kan man opnå et godt estimat for beholdningen i skattely. Således har forskere estimeret, at omkring en tiendedel af verdens finansielle aktiver ligger placeret i skattely. I Danmark estimeres det at mellem 100 og 300 milliarder danske kroner ligger placeret i skattely, og vi kan identificere et yderst konservativt, nedre skønt for det danske skattetab årligt på mellem 2,5 og 6,5 milliarder kroner årligt.

Estimater for omfanget af skattely

Det mest citerede estimat på omfanget af skattely stammer fra den amerikanske økonom Gabriel Zucman i samarbejde med den blandt andre franske Thomas Piketty og danske Niels Johannesen. Her har man estimeret, at hele verdens samlede formue i skattely udgør omkring 10% af verdens BNP, i omegnen af 9.000 milliarder dollars eller ca. 40 billioner (40.000 milliarder) danske kroner. Zucman har også anslået, at der heraf tabes i omegnen af 1,2 billioner kroner årligt til decideret skatteunddragelse. Disse tal er omgærdet af stor usikkerhed, da de baserer sig på en række usikre datakilder – afvigelser i international bankstatistik, diverse centralbank-data, skattelækager mm. – men er bestyrket af flere alternative estimater, der benytter sig af andre metoder men når til omtrent samme resultat.

På baggrund af disse data, har Johannesen anslået, at danske aktiver på ca. 100-150 milliarder kr. er i skattely-lande. Det er lavere end Nationalbankens skøn fra 2013 på 275 milliarder, men omfatter også en anden tidsperiode, hvorfor den generelle størrelsesorden synes at stemme overens. Og hvad betyder det så for tabet til den danske statskasse? Johannesen anslår, konservativt, at det tabte skatteprovenu for så vidt angår kapitalindkomstbeskatning (fx renter og aktieudbytte) udgør ca. 2,5% og dermed 2,5-3,75 milliarder kroner årligt. Lægger man samme antagelse ned over Nationalbankens skøn udgør skattetabet godt 5 milliarder kroner. Også på baggrund af Zucmans data har CEPOS’ Otto Brøns-Petersen anslået at de tabte skatteindtægter udgør 6,5 milliarder kroner årligt. Disse tal stemmer nogenlunde overens med et estimat fra den danske regering fra 2014, der anfører, at ”der i Danmark sker skatteunddragelse gennem skattely for godt 3-5 mia. kr. årligt”. De danske skattemyndigheder har ikke selv kortlagt skattegabet på skattely-området for Danmark, så vi har dog ingen officiel dansk opgørelse.

Med disse estimater in mente, er det værd at notere sig hvad de eksisterende overslag dækker over, og særligt hvad de ikke dækker over. Da Zucman og co.’s analyser danner grundlag for de mest velkendte estimater, er det nærliggende at påpege at, analysen kun giver udtryk for en del af de formuer, der findes i skattely, og dermed den skatteunddragelse, der er forbundet med skattely. Analysen dækker nemlig alene private, finansielle former, og således ikke hverken selskabers skatteunddragelse og ikke-finansielle formuer (fx ejendomme, malerier eller ædelmetaller). Endvidere er skattetab fra skattely via indirekte mekanismer, eksempelvis tab forbundet med faldende skattemoral, ulige konkurrence eller mindsket økonomisk fremgang, er ikke medregnet. Det er sandsynligt, at disse elementer også har en ikke ubetydelig effekt på omfanget af skattely og skatteunddragelse.

På den eksisterende forskning er det således muligt at give et kvalificeret bud på størrelsesorden af danske aktiver i skattely samt det danske skattetab, der er forbundet med skattely. Hvad angår danske aktiver i skattely, kan vi anlægge et nedre skøn på mellem 100 og 300 milliarder kroner. Og hvad angår det samlede danske skattetab kan vi anlægge et nedre skøn på mellem 2,5 og 6,5 milliarder kroner årligt. Som nævnt er det dog ikke usandsynligt, at de reelle tal overstiger disse nedre skøn grundet finansielle elementer, der ikke er medregnet i eksisterende forskning.

Referencer:

Alstadsæter, Annette, Niels Johannesen, and Gabriel Zucman. 2017. “Who Owns the Wealth in Tax Havens? Macro Evidence and Implications for Global Inequality.” NBER Working Paper 23805. National Bureau of Economic Research. http://www.nber.org/papers/w23805.

Boston Consulting Group. 2008. “A Wealth of Opportunities in Turbulent Times.”

Brøns-Petersen, Otto. 2016. “Hvor Meget Mister Statskassen På Grund Af Skattely?” Punditokraterne. April 15. http://punditokraterne.dk/2016/04/15/hvor-meget-mister-statskassen-paa-grund-af-skattely/.

Pellegrini, Valeria, Alessandra Sanelli, and Enrico Tosti. 2016. “What Do External Statistics Tell Us About Undeclared Assets Held Abroad and Tax Evasion?” SSRN Scholarly Paper ID 2917184. Rochester, NY: Social Science Research Network. https://papers.ssrn.com/abstract=2917184.

Piketty, Thomas, and Gabriel Zucman. 2014. “Wealth and Inheritance in the Long Run.” http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2501546.

Regeringen. 2014. “Styrket Indsats Mod Skattely: Bekæmpelse Af Grænseoverskridende Skatteunddragelse Og Skattelykonstruktioner.” http://www.skm.dk/media/1124109/udspil-skattely-2014.pdf.

Secher, Mikkel. 2016. “Milliarder I Skattely: Så Meget Går Danmark Glip Af Hvert År – TV 2.” TV2 Nyheder. April 6. http://nyheder.tv2.dk/business/2016-04-06-milliarder-i-skattely-saa-meget-gaar-danmark-glip-af-hvert-aar.

Zucman, Gabriel. 2015. The Hidden Wealth of Nations: The Scourge of Tax Havens. Chicago: University Of Chicago Press.

Hvad er skattely?

Denne tekst er tidligere udgivet af OmFinans i 2017.

Skattely er et komplekst fænomen, som har mange navne og mange definitioner. Skattely er det danske udtryk, “tax havens” er den direkte engelske pendant, men herudover anvendes også fx ”offshore centres”, ”secrecy jurisdictions” (hemmelighedsjurisdiktioner), eller ”usamarbejdsvillige lande”. Fælles for de mange betegnelser er en generel karakteristik af større eller mindre grad af særlig tilbagetrækning af regulering og beskatning, ofte målrettet udenlandske forretninger eller individer.

Og hvor er disse skattely så henne? Trods den fokus, der i dag er på området, er der stadig stor uenighed om, hvilke lande der egentligt er skattely. Mange lande har i dag deres egne lister over skattely. EU og OECD har alternative lister, og en række civilsamfundsorganisationer har ligeledes forsøgt sig med egne opgørelser. Årsagen er en grundlæggende uenighed om hvad der karakteriserer et skattely – er det lave skattesatser, finansiel uigennemsigtighed, mangel på deltagelse i internationalt samarbejde, eller særlige aftaler med udvalgte firmaer? – og hvem, der kan karakteriseres som et skattely – er det kun små ø-stater eller også vores største handelspartnere?

Alt efter definition, så kan stort set alle lande defineres som skattely. Alle lande har i dag aspekter af deres skattelovgivning, som er særlig og mere favorabel end andres. Selv et land som Danmark kan i visse tilfælde betegnes som et skattely, eksempelvis ved udnyttelse af vores kommanditselskaber. Det traditionelle billede af velklædte bankører med kufferten fuld af skatteunddraget valuta på en solklædt ø i Stillehavet er ikke repræsentativt. Udvalget er i virkeligheden langt bredere, og mange etablerede økonomier tilbyder i dag ydelser af samme karakter, som kan findes på de caribiske småøer, mens hele skattely-industrien i dag lever under andre regler og andre normer, end tidligere i historien.

Når vi taler om skattely har vi med andre ord at gøre med et komplekst fænomen med stor variation, stor forvirring og stor udvikling. Vi kan dog generelt betegne denne verden som karakteriseret af en høj grad af uigennemsigtighed, af lav beskatning og af let regulering. Det er i den forstand, at vi bruger betegnelsen ”skattely” her på siden.

En kort historisk tilbageblik

Historisk set er skattely et relativt nyt fænomen, opstået og vokset hovedsagligt i løbet af det 20. århundrede. Her voksede kløften mellem geografisk bundne stater og global mobil kapital kraftigt. Egenrådige regeringer med en begrænset appetit for internationalt samarbejde stod i skarp kontrast til den i stigende grad forbundne og sammenflettede globale økonomi. Det gav muligheder for finansiel og lovgivningsmæssig arbitrage – udnyttelse af forskelle mellem enkelte landes love og regler. Men også hjælp fra entreprenante advokater, embedsfolk og politiske aktører spillede ind. Med indflydelse fra disse interesser, og med et ønske om at skabe nye muligheder for økonomisk vækst, valgte en række mindre jurisdiktioner i løbet af 1900-tallet proaktivt at forfølge ”skattely-strategier”, heriblandt Schweiz, Luxembourg og Bahamas, men også fx London og visse amerikanske stater. Ved at tilbyde favorable vilkår til rige individer og global kapital, var argumentet, kunne skattely-landene tiltrække investeringer og lokal økonomisk aktivitet. Mange steder var det et nødvendigt valg, dels grundet indflydelse fra udenlandske rådgivere, og dels grundet den manglende alternativer; for mange små nationer var udviklings- og vækstmuligheder i 1900-tallet begrænset, og væksten af ”offshore” skal ses i lyset heraf.

Skattely i søgelyset: Nye udviklinger

Fænomenet skattely har for alvor fanget interessen hos både forskere, politikere, medier og andre efter årtusindeskiftet, særligt i kølvandet på finanskrisen og de mange skattely-lækager (fx LuxLeaks og PanamaPapers). Her er det blevet påpeget, hvordan skattely bidrager til skatteunddragelse og –undgåelse, til finansiel ustabilitet, til uigennemsigtighed og til et svækket demokrati. Af den årsag har det internationale samfund siden 2000 reageret og pålagt skattely moralsk og økonomisk pres, samt vedtaget en lang række nye internationale reformer, hvilket har medført en voldsom ændring af skattely-verdenen. Nogle lande har forladt skattely-strategien (fx Nauru), mens nye lande er trådt ind (fx Somalien), og andre igen er blevet styrket (fx Hong Kong og USA) eller svækket (fx Schweiz). I det store hele har den store reformiver dog bibragt langt større gennemsigtighed, ansvarlighed og samarbejde i det internationale skattesystem, hvorfor mulighederne for skatteundgåelse og –unddragelse i dag er langt mindre end tidligere.

Et særligt populært redskab i kampen mod skattely har været ”sortlister”, som har været effektive til at ændre lovgivning og praksis i små ø-stater som Cayman-øerne og Bahamas uden geopolitisk magt, mens stormagter som USA og Storbritannien, som også i vid udstrækning tilbyder favorable regler for mobil kapital, slipper udenom. I det hele taget har fordømmelsen af skattely historisk set været karakteriseret af en magtudøvelse, hvor rige indflydelsesrige nationer har misbilliget mindre udviklede lande.

Uklare definitioner og geopolitisk skævhed er forstærket af den store variation i typen af skattely, og hvilke mekanismer, som driver hvert enkelt skattely. Enkelte lande specialiserer sig i bankhemmelighed (fx Schweiz), andre i selskabskonstruktioner (fx Delaware i USA), andre igen i formueforvaltning (Singapore), osv. Nogle kanaliserer penge til og fra og andre fastholder den internationale kapital.

På tværs af de forskellige typer skattely, de forskellige lande, og de forskellige definitioner, så har skattely dog store konsekvenser for lande som Danmark. Dem kan du læse mere om her.

Fakta: Forskellige skattely-lister.

OECD: Den mest autoritative international organisation på skatteområdet, OECD, vedligeholder en liste over ”ikke-samarbejdsvillige lande”, der ikke lever op til gældende minimumsstandarder for hhv. manuel og automatisk udveksling af information. I dag er der ganske få lande, som ikke lever op til disse standarder.

EU: EU-Kommissionen har i 2016, med opbakning fra medlemsstaterne, igangsat et arbejde med at udfærdige en liste over tredjelande (ikke-EU-lande), der ikke lever op EU’s standarder for ’tax good governance’, som omfatter både gennemsigtighed, særligt fordelagtige skattesystemer og lave skatterater. Kommissionen forventer at have en færdig liste i slutningen af 2017.

I mellemtiden har EU-Kommissionen offentliggjort en fælles oversigt over medlemsstaternes egne lister over lande, der ikke lever op til nationale kriterier for ’tax good governance’. Listerne varierer kraftigt: Frankrig har otte lande på sin liste, Portugal 80, mens Danmark eksempelvis ikke har offentliggjort en liste.

Financial Secrecy Index: Den internationale skatte-NGO, Tax Justice Network, udgiver hvert andet år Financial Secrecy Index, som opgør de vigtigste ”secrecy jurisdictions” (hemmelighedsjurisdiktioner) ud fra kriterier om finansiel og skattemæssig hemmelighedsfuldhed og størrelsen af den finansielle sektor. Sidstnævnte variabel har til formål at flytte fokus fra små ø-stater til store udviklede landes rolle som skattely. På listen finder man således både USA og Storbritannien i top10 over verdens vigtigste skattely. En ny udgave af indekset forventes offentliggjort i 2018.

Øvrige civilsamfundsopgørelser: En række civilsamfundsorganisation har i tidens løb offentliggjort egne bud på skattely-lister. Et prominent nyligt eksempel er Oxfam, der i 2016 offentliggjort en liste med lande som Bermuda, Cayman-øerne, Holland og Schweiz i spidsen. Her var kriterierne brede, med fokus på lave skatterater, særligt fordelagtige skattesystemer, gennemsigtighed, multinationale selskabers skatteundgåelse og placering af datterselskaber og landets størrelse.

Referencer:

Alstadsæter, Annette, Niels Johannesen, and Gabriel Zucman. 2017. “Who Owns the Wealth in Tax Havens? Macro Evidence and Implications for Global Inequality.” NBER Working Paper 23805. National Bureau of Economic Research. http://www.nber.org/papers/w23805.

Bruner, Christopher M. 2016. Re-Imagining Offshore Finance: Market-Dominant Small Jurisdictions in a Globalizing Financial World. Oxford, New York: Oxford University Press.

Bryan, Dick, Michael Rafferty, and Duncan Wigan. 2016. “Politics, Time and Space in the Era of Shadow Banking.” Review of International Political Economy, February, 1–26. doi:10.1080/09692290.2016.1139618.

Burn, Gary. 1999. “The State, the City and the Euromarkets.” Review of International Political Economy 6 (2): 225–261.

Cobham, Alex, Petr Janskỳ, and Markus Meinzer. 2015. “The Financial Secrecy Index: Shedding New Light on the Geography of Secrecy.” Economic Geography 91 (3): 281–303.

Findley, Michael G., Daniel L. Nelson, and Jason C. Sharman. 2014. Global Shell Games. Cambridge: Cambridge University Press.

Garcia-Bernardo, Javier, Jan Fichtner, Frank W. Takes, and Eelke M. Heemskerk. 2017. “Uncovering Offshore Financial Centers: Conduits and Sinks in the Global Corporate Ownership Network.” Scientific Reports 7 (1): 6246. doi:10.1038/s41598-017-06322-9.

Hakelberg, Lukas, and Max Schaub. 2017. “The Redistributive Impact of Hypocrisy in International Taxation: Hypocrisy and Redistribution.” Regulation & Governance, June. doi:10.1111/rego.12156.

Hudson, Alan. 2000. “Offshoreness, Globalization and Sovereignty: A Postmodern Geo-Political Economy?” Transactions of the Institute of British Geographers 25 (3): 269–283.

Krugman, Paul. 2009. The Return of Depression Economics and the Crisis of 2008. Reprint edition. New York: W. W. Norton & Company.

Palan, Ronen. 2003. The Offshore World: Sovereign Markets, Virtual Places, and Nomad Millionaires. Ithaca: Cornell University Press.

Rixen, Thomas. 2013. “Why Reregulation after the Crisis Is Feeble: Shadow Banking, Offshore Financial Centers, and Jurisdictional Competition.” Regulation & Governance 7 (4): 435–59. doi:10.1111/rego.12024.

Sharman, J. C. 2006. Havens in a Storm: The Struggle for Global Tax Regulation. 1 edition. Ithaca: Cornell University Press.

———. 2012. “Canaries in the Coal Mine: Tax Havens, the Decline of the West and the Rise of the Rest.” New Political Economy 17 (4): 493–513. doi:10.1080/13563467.2011.616583.

Shaxson, Nicholas. 2012. Treasure Islands: Tax Havens and the Men Who Stole the World. 9 edition. London: Vintage.

Stiglitz, Joseph E. 2012. The Price of Inequality: How Today’s Divided Society Endangers Our Future. 1 edition. W. W. Norton & Company.

Ain’t nothin’ but a G7 thang

This weekend, the Group of Seven (G7) finance ministers completed a “historic deal”, a new “global tax agreement” that will truly bring the international tax system “into the 21st century”.

Or so, at least, is the narrative presented by some of the G7 folk (most prominently UK chancellor Rishi Sunak), which has been swallowed by large swathes of journalists and observers, hook-line-sinker.

Yes, certainly, if we look purely at the content of the G7 announcement, it looks transformative: A global minimum corporate tax of at least 15%, and a reallocation of taxing rights for the largest and most profitable multinationals towards market jurisdictions, where sales are made.

But the significance of the G7 announcement has been massively overblown and oversold, in both political and normative terms. There are at least four parts to this argument worth highlighting.

First, the G7 just isn’t as important as it once was for the making of international tax reform. The G7 used to be the prime high-level political forum, the most important gathering of ministers and state leaders, setting out the direction for technical negotiations conducted by the OECD, and making the key decisions in turn.

But following the global financial crisis, the locus of global tax governance shifted from the G7 towards the Group of Twenty (G20) – and with significant implications. The G20 includes not just the ‘old’ powers of Europe and America but also the ‘rising powers’ of China, India, Brazil and others, bringing together a much more powerful and diverse geopolitical coalition.

It is this expanded power base, the might of the G20, that has made it possible for the international community to even consider such comprehensive and progressive reforms as a global minimum corporate tax. The shift to the G20 has meant global tax reform initiatives have far more teeth in recent years, with a stronger and more credible threat of sanctions for those unwilling to follow along (e.g. tax havens). If this were still a G7 world, we probably wouldn’t be having these discussions.

But because the G20 includes other countries than the G7, with different interests in international taxation, the contents of global tax reform are also shifting, less defined exclusively by the ‘old’ powers, increasingly marked by the preferences of ‘rising’ powers, whose voices are becoming harder and harder to ignore.

Thus, framing the G7 agreement as some sort of endpoint, as a final stop for global tax reform, fundamentally betrays these empirical and political development, and overlooks the importance of the G20. (Yes, of course, it is a significant political signal that seven of the most politically powerful countries agree on principles of reform, but in truth this doesn’t mean much unless China, India, Brazil and the rest of the G20 are on board. (They will likely be, but for other reasons I’ll get to in a second, not because “the G7 said so”.))

Second, there’s another important shift of political power that means it’s not all G7: that from the OECD to the “Inclusive Framework”. Ten years ago, negotiations on reforming the global corporate tax system was practically conducted at the OECD amongst its 30-something member states, where the G7 all feature prominently. So you could’ve been forgiven for saying the G7 pragmatically decided things. But that’s no longer the case.

Today, negotiations fall under the auspices of the “Inclusive Framework”, a forum established in 2016 under the OECD, at the behest of the G20. It has a vastly expanded membership, now gathering 139 countries and jurisdictions, all formally on an “equal footing” to decide the direction of the international tax system. While significant inequalities in power and resources remain, the dynamics of the Inclusive Framework have unquestionably shifted decision-making authority away from the ‘old powers’ and towards emerging economics and developing countries.

So, again, when the G7 are presented as the ultimate brokers of a global agreement, as the key decision-makers, it is indicative of a significant misunderstanding both of the raw political process and the shifting power relations of global tax governance. The G20 and the Inclusive Framework are the key decision-making authorities here, not the G7.

Third, content-wise the G7 announcement simply doesn’t entail much noteworthy new information. Let’s look at the bits of the G7 “tax deal”. The first component is a global minimum tax of “at least 15%”. The global minimum tax itself has been under discussion at the G20 and the Inclusive Framework since 2018, and the member states have reaffirmed in status reports, in high-level communications, and in negotiations several times their commitment to the principle, so we already knew they were supportive (although inevitably much technical work remains – the G7 announcement doesn’t change that.) The “at least 15%” bit is sort of new, but if you paid close attention you’d have noticed it came out of discussions at the Inclusive Framework’s Steering Group – a 24-country committee including China, India, Brazil, Nigeria and others alongside six of the seven G7 members – rather than the G7 itself.

The second component is a reallocation of taxing rights for the largest and most profitable multinational companies, with 20% of their profits above a 10% margin awarded for market jurisdictions (where sales are made) to tax. Hmm, where we have heard that before? Oh right, it’s been the basis of negotiations at the Inclusive Framework for more than a year, and that direction of travel is only reaffirmed by the G7 announcement, as it has been again and again previously in other communications. The specification that it is “the largest and most profitable” firms that are in scope is a recent change arising from Joe Biden and Janet Yellen’s interventions but again something that is being discussed primarily at the Inclusive Framework’s Steering Group, not the G7.

Thus, while the political signal of the G7’s formal announcement certainly carries weight, the content of that signal has been interpreted as much, much more novel and groundbreaking than it really is.

Fourth, beyond the misrepresentation and misinterpretation of the political proces, the political power relations, and the substantive content of the announcement, the portrayal of the G7 as key, final decision-makers is a significant problem from a normative perspective. The G7 can’t decide but also the G7 shouldn’t decide how to reform the global tax system.

Inevitably, global tax governance reflect established power structures and the fundamental inequalities between countries in terms of their ability to influence global policy-making. And so it is obviously the G7 who stand to gain the most from the “historical global tax deal” that they have brokered.

But there is an obligation to point that out, to question and critique it, rather than accept and buy into it. There is a real chance, with the emergence of the G20 and the Inclusive Framework, to build more inclusive, more democratically accountable, and more sustainable global tax rules. And there are already signs that we are headed in that direction, though it is still very far from reality.

Acknowledging that it is not the G7 that decide these matters is an important starting point here. Acknowledging that emerging markets and developing countries do have a voice, and should have a voice, is an important starting point. That, in addition to the raw political realities, is why we should not simply accept the prevailing narrative around the G7’s “historic tax deal” from this weekend.

What do stakeholders expect from corporate taxation?

A fascinating new paper was published earlier this month in the Journal of Business Ethics, titled “Corporate Tax: What Do Stakeholders Expect?“. It is authored by Carola Hillenbrand, Kevin Guy Money and Chris Brooks at the University of Reading and Nicole Tovstiga at the University of London.

The abstract reads:

Motivated by the ongoing controversy surrounding corporate tax, this article presents a study that explores stakeholder expectations of corporate tax in the context of UK business. We conduct a qualitative analysis of in-depth interviews with representatives of community groups (NGOs/think tanks and special interest groups), as well as interviews with those representing business groups (business leaders and industry representatives). We then identify eight themes that together describe “what” companies need to do, “how” they need to do it, and “why” they need to do it, if they wish to appeal to a wide group of interested parties. We discuss our findings based on the corporate social responsibility literature and propose novel ways for community groups and business groups to connect on the topic of corporate tax, suggesting opportunities and themes for dialogue and potential steps to co-create solutions in a stakeholder society.

Right down my alley. In short: different groups have different expectations when it comes to corporation taxes. As I have written elsewhere, including in a new paper with Maya Forstater, these differences in expectations lead to a polarised debate about corporate taxation with a “missing middle ground”.

What’s interesting about this paper, to me at least, is not so much the findings on perceptions themselves. Maybe they will be surprising to people outside the tax world, but most people inside the tax world will find the results eerily familiar. Rather, it is the strong confirmation of “accepted wisdom”. Sometimes, the most important job of research is to test whether such “accepted wisdom” is really true.

And the paper really does a great job of evidencing the different expectations of stakeholders, in a succinct manner, with a strong empirical basis in the UK context. The survey a broad range of stakeholders (n = 61) from community groups (NGOs, think tanks and interest groups) and business groups (business leaders and industry representatives) through qualitative interviews. They look at a variety of dimensions of expectations including level of tax payments, transparency, inequality, ethics, social responsibility, etc.

The results are summed up in two massive tables and accompanied by a lengthy discussion. But here’s my TL;DR recap:

Issue/Group Community group Business group
Desired principle of corporate tax Pay where local presence, size and capacity is, and where businesses actually operate. Like today, but with more
legal clarity and certainty
Business interests Driven by profit ahead of wider societal, community and ethical interests (which is bad) Businesses do and should act on behalf of owners, though there is increasingly wider ethics/integrity concerns
Political (in)equality As powerful societal players, big businesses get special treatment. There’s inequality within business world; SMEs and those not operating in low-tax countries are disadvantaged
Listening Companies don’t listen to community groups
(they should)
Businesses could improve listening and communication
Public debate Should include all stakeholders; today, community groups are excluded Community groups excluded from public debate fairly because they don’t understand tax rules and need education
Transparency More! Businesses try but some issues are too complex for public

In short, this is a very strong illustration of the polarised perceptions of community groups and business groups when it comes to corporation taxes.

The authors sum up:

Overall, our findings suggest that stakeholders tend to sympathize with views held within their own network and tend to iterate well-established narratives within such networks.

This aligns well with Maya’s and my point:

When arguments are strongly divided, each group tends to judge that their own arguments as based on evidence and justice in the public interest; while viewing ‘the other side’ as speaking from their own self-interest to protect individual and organisational short-term goals.

In addition to a good analysis of stakeholders perceptions, the authors add a discussion of how to deal with the issues they identify, in particular diverging expectations.

Unfortunately, they only discuss it from the side of companies: what companies can and should do about it. That the authors don’t address what community groups (their other key stakeholder) can do, or what the two groups can do together, is a missed opportunity, but alas. This part of the paper is clearly shaped by the fact that this is a business ethics journal and a business ethics article.

The authors propose the following model for thinking about the “whywhat and how” of corporate management of community groups’ expectations on corporate taxation:

Capture 2.PNG

Again, there is a lengthy discussion in the paper of this. My TL;DR:

  • Why engage: Integrity and ethics are opportunities to address social license to operate and to demonstrate corporate value.
  • What to do: Assess tax payments and strategy in relation to community expectations and in cooperation with community groups.
  • How to do it: Engage proactively with community groups, communicate tax more and better, be more transparent.

I am not sure how actionable these ideas really are, or if they bring much new to existing corporate social responsibility ideas. While these seem like nice ideas, the authors do not address in any great detail how their proposals would actually work given the chasm in perceptions illustrated by their own interview results. For instance, business groups’ views that community groups “don’t understand tax” would seem an obvious hindrance for companies to engage more proactively with those community groups.

Nonetheless, I do find the framework interesting as food for thought and as a starting point for further discussion.

All in all, I think it is an interesting paper, though I am sure many in the tax community will not be surprised the least bit by the results or the proposals to remedy polarisation. Still, the value of evidence to confirm, and also in some cases challenge, conventional wisdom should not be underestimated. Moreover, my summary here is of course simplified and the analysis itself provides more nuance, further information and intriguing discussion. I do encourage anyone with an interest in corporate taxation and public debates to go read it. It’s openly accessible over at Springer.

The Paradise Papers should lead us towards a new global tax system

Last week, I published an op-ed in Danish newspaper Politiken with my colleague Saila Stausholm. I reproduce it below, liberally translated, for those interested. Given the op-ed format, it naturally has certain limitations and a certain style that differs from my usual writings on this blog – so take that into account. Here we go:

The Paradise Papers should lead us towards a new global tax system

Last Sunday, the International Consortium of Investigative Journalists (ICIJ) lifted the dam that had been holding back a new giant offshore leak, the Paradise Papers.

While the stories of tax haven usage do not necessarily reveal any illegal activity, the reactions tell us that citizens and politicians are outraged by the implications in the leaks of leaders and elites in the world’s richest countries.

Exactly because much of this activity is legal, the leak highlights the massive chasm between what ordinary people see as reasonable, and what the global elite can do within the limits of the law.

The Paradise Papers thus clearly showcase the structural problems of a nationally anchored tax system that works globally for mobile capital.

It is outdated, and there is a need for not just outrage and political attention, but also new, concrete ideas and the courage to change the system radically.

Small “quick fixes” here and there are not enough. On the contrary, we need to change the tax system fundamentally in order for it to match the ongoing reconfiguration of the global economy.

As illustrated by the tax haven leaks of the past few years, the opportunities to use tax havens and the offshore world are a key symptom of a tax system where regulation has not kept pace with globalisation.

Before the Paradise Papers, we had the Panama Papers, which created outrage in 2016, implicating the Icelandic Prime Minister, the Saudi Arabian king, the Pakistani Prime Minister, football world star Lionel Messi, and actor Jackie Chan.

In Denmark, too, the Panama Papers had consequences: The Danish tax administration is continuing its investigations into the affairs of at least 500 Danes.

Before the Panama Papers, we had the LuxLeaks, which revealed that PwC had helped a string of global corporates attain hugely favourable tax terms in Luxembourg. This had happened while current European Commission President Jean-Claude Juncker was Prime Minister in the Grand Duchy.

LuxLeaks also fostered significant political reactions, and became the starting point for Margrethe Vestager’s high-profile state aid cases against Luxembourg involving Amazon, Fiat, and McDonald’s.

And again before LuxLeaks, we had the Offshore Leaks in 2013. In addition, we have had the SwissLeaks and the Bahamas Leaks. These many leaks must be viewed in light of the increasing focus on tax havens and the issues created by the international tax system for both rich and poor countries.

Since the global financial crisis broke out in 2007-08, nation-states have increasingly identified the strengthening of national and international tax systems as a central part of the solution to the economic challenges we face today: debt crisis, public budgets under pressure, low growth and growing inequality.

As a consequence, both national governments and the international community has ramped up political initiatives against tax havens, against aggressive tax planning, against money laundering, and against tax evasion.

Today, we have much more transparency and better international exchange of tax information; we have closed some of the worst loopholes; and we have changed what is acceptable in terms of bank secrecy, shell companies, etc.

But the political reforms from the past decade have not really taken on the fundamental causes of the problems we are seeing today in tax havens and in the international tax system.

All the key components of the international tax system, established in the early 20th century, have not changed substantially.

Countries can still undermine each other by commercialising their sovereignty and offer favourable terms to foreign capital and thus reduce the economic and democratic capacity of their neighbours. And despite initiatives in the EU and the OECD, international cooperation is still relatively limited and, to a large extent, controlled by a small core of actors from the world’s richest nations.

Global corporations are still, essentially, taxed like they were 100 years ago, when they were small regional networks primarily trading physical goods.

This means that global capital – large corporations and rich individuals – are still able to structure tax liabilities with little friction across borders, while governments are largely bound by geographical and territorial borders.

If we want to address the fundamental challenges facing the international tax system today, we need a complete overhaul of the system. We need global innovation. Innovation is needed because old solutions will not do. And global scope is needed because solutions need to encompass all relevant countries and interests, if we harbour any ambition of finding sustainable and lasting answers.

First of all, we need innovation in terms of more and better inclusion of various interests in political decision-making processes. This is particularly relevant at the international level, where the group of decision-makers involved has historically been very narrow.

Our research has shown that a small group of actors play a disproportionate role in international tax policy-making. And that a core group of technical experts contribute to setting a course for regulatory initiatives that widely differs from the perceptions and goals of the general public and of politicians.

International tax policy is very important, and should have broad participation in all phases from the public, from civil society, from researchers, from interest organisations, and from politicians from all sides. This is not the case today. This would improve the quality of the democratic system and the political decision-making.

One model for such an expansion of participation is a World Tax Organisation. Today, taxation is just about the only major global political issue area where we do not have a global organisation with active participation from across the globe, where global challenges can be discussed, and common guidelines can be laid out.

We have a World Trade Organisation, a World Bank, a World Health Organisation, and so forth. But we do not have a World Tax Organisation.

This is not to say that these organisations are flawless, nor that a new organisation will solve all of our problems on its own. It is just one suggestion and just one part of the solution. What such an organisation does provide is a common global forum, where a broad range of issues can be raised and addressed, which simply does not exist in the area of taxation.

The “global” political discussions we have today largely take place in the OECD, the G20 and the EU; they play a key role in setting the agenda.

This makes it difficult for other countries and other stakeholders to join and influence discussions, despite the fact that many of the issues caused by the current international tax system hit emerging and developing countries disproportionately hard.

Without assuming the full design of a World Tax Organisation, we can at least imagine that it would function as a global forum that could take up key questions about international tax policy and tax havens, start political reform discussions, carry out global consultations, set out global guidelines, etc.

A more expansive idea of such an organisation could, like the World Trade Organisation, be entrusted with the power to assess and enforce whether any one country’s tax system would live up to globally agreed minimum standards, in order to ensure that it did not harm other countries with its policies or allow harmful discrimination of certain persons or companies.

In addition to creating a better forum for the negotiation of common ground rules, we also need to rethink how we tax cross-border activities in the global economy of today.

Today, global corporations and rich individuals have particularly large scope to lower their tax bills by manipulating mobile income across borders because our tax systems are still based around outdated ideas of how and where value is created in a global economy.

For instance, a substantial part of global corporate assets today are intellectual property: patents, copyrights, etc. In short: ideas.

In contrast to traditional assets such as factories, ideas and mobile and malleable. Where and when does an idea originate, and how does it create value?

Despite hundreds of pages of guidelines and regulation, multinational companies retain a great deal of flexibility in answering these questions and thus determining the location and size of their taxable incomes.

Large and complex global ownership networks equally allow corporations to move ideas, services and profit relatively friction-less across borders.

This is why taxation of corporations, and individuals, who effectively operate on a global scale, should also work effectively globally.

In the area of corporate taxation, one proposal in this vein is unitary taxation, where global corporations’ taxable income is consolidated at the global level, before it is distributed to each country of operation based on a predetermined formula.

In this way, it becomes far less important where corporations locate their profits, and thus harder to avoid tax liabilities as in today’s system.

In the area of personal taxation, a truly global tax regime might utilise multilateral tax assessments and audits for globally mobile individuals.

Again, these proposals are not silver bullet panaceas that will solve everything in a second. But they may be part of the solution, and they serve as important pointers towards a positive future for tax systems.

In order for these innovations to realistically happen, we also need a complete rethinking of attitudes to national sovereignty.

A key cause of today’s relatively limited international cooperation in tax matters, and of continued resistance towards a World Tax Organisation, is that governments across the world are terrified to surrender absolutely sovereignty over their tax systems.

However, as German philosopher Peter Dietsch has illustrated, international tax cooperation is not about surrendering sovereignty, it is about strengthening it.

Today, we have de facto lost sovereignty when tax havens induce limitations on our economic and political latitude. And yet we refuse to challenge their rights to do so.

Paradoxically, this insistence on the absolute sovereignty of others’ in tax matters thus weakens our own sovereignty.

If we are to achieve the needed global innovation in tax matters, we need to acknowledge that global cooperation provides a unique opportunity to regain lost sovereignty.

Another acknowledgement that is required for global tax innovation is that international tax politics is not a zero-sum game.

Today, many governments resist good ideas for change because they fear an absolute reduction in national tax revenue.

The Danish government, for instance, has expressed skepticism about a common European corporate tax system, proposed by the European Commission, which has the purpose of eliminating many of the most important current channels of tax avoidance used by large corporations in Europe. This skepticism is caused by a fear that Danish tax revenue would suffer due to our small market size.

There are many good reasons to be skeptical of the European Commission’s proposal, but tax revenue fears must be understood in the context of the long list of indirect benefits to the Danish public coffers, which are likely to outweigh any direct, absolute revenue losses. These include administrative cost savings and reduction in tax avoidance.

There are countless examples of hesitation around new political ideas because of this zero-sum mentality in tax matters.

But it is crucial that we view global innovation in tax policy as a unique opportunity to ensure a sustainable international tax system for the future.

Global tax innovation can be a critical way to future-proof our tax systems and thus our public finances. With a typical Treasury expression, the dynamic effects of global tax innovation are potentially enormous.

A World Tax Organisation and a global tax system will not solve all of our problems on their own, but they are a important steps in the right direction – and it is unlikely that we can effectively address our current challenges without effective organisational support and global policies.

However, global fora and global politics of this kind today are also plagued by large inequalities in resources, competencies and capacity between national representations. This will not be solved by establishing a new global organisation or new global policies.

This is why we also need to acknowledge the broader global political inequalities that lead to lack of cooperation, both in terms of a lack of will and in terms of lack of capacity.

For instance, a key reason that many small island states have historically pursued “tax haven strategies” is that they simply have not identified or been able to execute viable alternative strategies for economic development, and that they have been encouraged to do so, for instance by successive British governments.

Another challenge lies in the dominance that large Western states exercise in global politics. They tailor global tax rules to their advantage, while small tax havens and developing countries have almost no influence on international standards and regulation.

This gives substantial incentives to defect and to counteract global cooperation.

The USA, for instance, has played a key role in reducing bank secrecy in Switzerland, but in parallel it has strengthened its own secrecy industry at home, effecting what political scientists Lukas Hakelberg and Max Schaub have called “redistributive hypocrisy”.

We need to recognise and address these types of global political inequalities if the fight for global tax innovation is to succeed.

And there are good reasons for trying to do just that. The Paradise Papers and the increasing public attention to the challenges of tax havens and the international tax system underline the necessity of altering the current political course.

Small “quick fixes” of an outdated international tax system will not do.

We are hoping that the continuing stream of offshore leaks will not just lead to outrage but also to fundamental disruption of our whole approach to questions of global political inequality, globalisation, and, specifically, global taxation.

There is a need for broader and better participation in global political discussions of tax havens and tax systems. A World Tax Organisation would be a great place to start.

And there is a need to move towards tax systems that are truly anchored at the global level in order to deal with global economic activity.

There is also a need to rethink our approach to national sovereignty and to depart from the zero-sum mentality.

And finally, we need to address the global political inequalities that pose such a significant barrier to progress in the fight against tax havens.

If we can begin to move in this direction, just a bit, the future suddenly looks much brighter for the international tax system, for public finances, and for the modern global economy.

Law and morality in the Paradise Papers

Predictably, responses to the release of the Paradise Papers, another leak showcasing the activities of “the offshore world”, has tended to fall onto a familiar continuum.

At one end, there’s the “it’s all about the law” fraction. This group maintains that since the leak reveals seemingly little outright illegal activity, any issues arising from the stories should be taken up with politicians – it’s their job to change the laws, change the system, after all. Most of the people and companies at the centre of revelations have opted for this line of argument. Apple, for instance, said in a statement, “At Apple we follow the laws, and if the system changes we will comply”. Translation: If you want us to change, change what’s lawful. Myself, I had the rather mixed pleasure of being chastised in a major Danish newspaper this week for my comments on the leaks by a tax advisor who suggested that the revelations were a witch hunt given the absence of illegality.

At the other end, there’s the “it’s all about morality” fraction. This group maintains that while few laws seem to have been broken, it is the morality of the revealed affairs that requires scrutiny. The implication here is that the onus of change is upon the taxpayers involved to modify their behaviour. Amongst others, most of the media outlets involved in the Paradise Papers seem to have taken this as their starting point, and that seems to be the line of thought by many in the general public too. Nick Hopkins at the Guardian noted, “Thanks to the Paradise Papers leak, the world will get a chance to scrutinise and pass judgment on the tapestry of schemes and networks politicians say they find so unpalatable – and many ordinary people find offensive and unfair.” Various academics have also highlighted what is, in their view, the positive nature of these morality debates.

Of course, this is a simplistic representations, and there is inevitably other dimensions and a large middle ground, where discussions are now developing on the interplay of law, morality and other dimensions in the Paradise Papers and beyond.

Unfortunately, it seems from my vantage point, this middle ground remains minuscule compared to the outsized presence at each end of the scale, especially in the popular media discussions.

So I want to strike another blow for considering both law and morality in responding to the Paradise Papers.

Why? Because both the “it’s all about the law” and the “it’s all about morality” mantras are letting important issues slip by, and letting those responsible off the hook.

To start, the “it’s all about the law” crowd let taxpayers, companies, celebrities, elites and others involved off the hook. Yes, they may acting in accordance with the law (although lawfulness is usually impossible to ascertain from the documents), but the law is unfortunately not always a fixed and readily identifiable line across which we can easily distribute those in and out of compliance. The letter of the law is one thing, the spirit of the law is another. That is, of course the reason we have legal institutions such as the courts – to make final determinations about legal compliance, and fortunately so.

However, the opportunities to play at the margins of this compliance line are extremely unevenly distributed. For instance, a regular salary-earner (the vast majority of taxpayers in any developed country) has rather limited possibilities to engage in tax evasion and avoidance; most of her taxable income and economic affairs will be subject to third-party or verified reporting, which is hard to abuse. Meanwhile, Nike – a resourceful globally operating corporation with mobile income and fungible assets – has much more scope to engage in such activity. In general, the opportunity for avoidance and evasion is simply highly progressive (the richer, the more opportunity), as illustrated by recent research. As I have also written previously, the legal and institutional framework is the key element in determining whether people comply with tax laws, but other important factors include levels of wealth, tax rates, audit probability, and tax morale – each of which is unevenly distributed across the population of taxpayers.

Moreover, as my own and others’ research has shown, politicians do not have exclusive authority over the content and nature of national nor international tax rules. A range of stakeholders, including those who use the offshore system, play a role in shaping the political discussions and outcomes that support the offshore system in the first place.

In this context, when commentators claim that Nike’s global tax set-up, or the use of offshore investment vehicles, are entirely unworthy of discussion because of their legality, or compare these to an ordinary taxpayer claiming a regular tax deduction, there are good reasons to be skeptical. This ignores the fuzziness of the law and compliance, and it neglects the role of personal and corporate behaviour, and thus responsibility, in the offshore system.

And it ignores the broader societal imperatives at play, and the contemporary context of widespread condemnation of “the offshore”, of inequality, of public frustration, etc. Utilising the offshore system brings additional risk – financial, but also reputational and legitimacy-wise – because it may look off from the perspective of the general public. As I wrote just a few days ago, this increased risk brings with it added responsibility “to address the broader societal concerns, to take them into account, not just in communicating actions but also in assessing those actions in the first place”.

In a similar manner, the “it’s all about morality” crowd is letting politicians, political institutions, international organisations, and also the media and the public off the hook. On the former, it is, after all, indeed the political system which is ultimately responsible and accountable for crafting laws which make it possible to utilise the offshore system. “Tax havens” are notoriously difficult to regulate because of fundamental principles of the international tax order, such as fiscal sovereignty and the collective action problem – but that doesn’t mean we should give up and shift the blame.

Moreover, the “it’s all about morality” crowd is unfortunately also guilty of letting the worst offenders involved in the leaks somewhat off the hook. When the court of public opinion becomes “all about morality”, we risk pooling the very bad with the not-so-bad. The mere use of investment vehicles in the Cayman Islands is chugged in with regulatory arbitrage, tax avoidance, money laundering and outright corruption. Is Queen Elizabeth’s offshore investment as bad as Glencore’s secret loans, in terms of the law or in terms of morality? If so, then by extension almost any cross-border activity involving “offshore” site becomes a no-go. As I wrote the other day,  I do not think encouraging a total shutdown of the Bermudan economy is advisable. That does not mean we should not discuss the impact of such activities but rather that we should not support outright bans of whole countries. I do recognise that many smart people have sought to distinguish between these shades of offshore activity, but my perception is it still does not have sufficient impact to really translate in to the public domain.

We also risk conflating a range of issues when saying “it’s all about morality”. In the case of Queen Elizabeth’s fund, the combination of personal wealth, investments unfamiliar to the general public, and offshore structuring has made for widespread condemnation. Each of these elements are issues that are open for discussion, e.g. in terms of inequality, but to mix them all up creates an unnecessarily neatly pooled picture of what is going on and what is at stake.

Finally, “it’s all about morality” provides a neat excuse for actors to call for rash, politically satisfying initatives, rather than deliberated, effective reform. As Shu-Yi Oei and Diane Ring have argued, recent years’ tax haven leaks have given rise to non-rational responses by political actors. “Quick fix” unilateral action by politicians under pressure, for instance, can undermine broader global progress. The need to do something can overshadow the need to do right. There is also the risk of undermining existing reforms. The recent progress on automatic exchange of tax information, which only started this past September, has rarely been mentioned in the wake of the leaks although it is likely to have a significant effect upon the practices showcased in the media.

Thus, when commentators lump all practices revealed in the Paradise Papers together as equally problematic, there are similarly good reasons to be skeptical. This neglects political responsibility, the very real effects of political (in)action, and the varying relationships of varying offshore practices to law. It also risks undermining actually effective and meaningful political reforms, including those already in place but which we are yet to see the full effect of.

All of this is unfortunate because the Paradise Papers, as with previous leaks, provide unique momentum for real transformative change, which is needed if we are to really get at the issues underlying the revelations. One of the key messages I have tried to convey in the wake of the leaks is that we have still not genuinely tackled crucial questions about how to tax multinational firms in a modern global economy, how to regulate fiscal sovereignty in an age of harmful tax competition, or how to ensure the global legitimacy of tax governance and cooperation.

These are questions that go to the heart of the Paradise Papers revelations, as well as revelations from prior leaks. And these are questions we should be asking these days, while the momentum is there. It becomes difficult to do so if we do not recognise the role of both law and morality because we let those responsible off the hook and we let important issues slip by.

Instead, I think that the best way forward is to genuinely consider the role of both law and morality. And that we consider the fundamental underlying questions that lead to outrage and leaks and political trouble in the first place. That includes paying attention to both political action and behavioural change on the part of taxpayers. It is not possible to bring about meaningful transformative change, I believe, without addressing both norms and politics. And the issues at stake are too important to let those with the power to change the state of affairs off the hook.

So what does that kind of way forward look in practice? I have some ideas. Stay tuned..