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At the end of the day, it is always about money. Or, as people who are in the capital consuming fields like to refer to it (both euphemistically and to detach money from icky markets) resources. And more importantly for states, it is about tax income from shares of participation in trans-national global production that is not based on market measures chopped up among states, but on an "equitable" distribution of the value added (no one liker to speak about profit any more, though they are more thna happy to engorge their wealth directly or indirectly with or through it).
They have a point, in part, and they have gone off the rails in part (though that rail busting is quite strategic). At the same time the recent efforts reflect the persistence of contradiction built into the increasingly unhappy relationships between the premises of the state system (based on horizontal equality, internal control, etc.) and those of an idealized international law. The former speaks to the supremacy of the state and state organs, except as and when states contract among themselves to do or not do certain things or to choose to add to their orthodox normative structures of belief or disbelief. The later speaks to a vanguard of international bureaucrats and their technocratic nomenklatura. They would harden the implicit theory of vertical power arrangements, from small and scattered to a single power. Like the early Roman emperors they would no doubt continue to nod in the direction of the old system, but effectively they would displace the state with the international apparatus. In a sense they would transform the state from a center of power to a pass-through compliance apparatus for the of policy and rules developed and imposed from the top. As a consequence states would either veer toward one of two models: (1) they would begin to assume the role of enterprises in current systems of human rights, sustainability ad the like. That is states would tend to be the nexus point of public-private hybridity; (2) states would effectively be reduced, except for colorful performances and the responsibility to deploy a police force, into an administrative organ of international organizations. Clearly neither pf these polar points is likely. But even small movements along a trajectory can have potent and sometimes unanticipated effect.
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Today this contradiction and its trajectories is much on display in the context of the quite difficult issues around developing a tax framework for multi-state economic activity (OECD ‘disappointed’ over ‘surprising’ UN global tax report:The U.N. chief pushed for a bigger say in the international tax agenda and said the group of wealthy countries had ignored the needs of developing nations). That at least is conceivable. still inconceivable is the possibility of doing the same for civil society and foundations.
On the one side one encounters the Organization for Economic Cooperation and Development (OECD). This is the umbrella organization of the wealthiest states, and to some extent, the states whose ancestors cobbled together a vision of globalization squandered by their progeny (perhaps for lack of will. more likely for lack of vision). The OECD represents the most advanced forces of the state and of a globalized market economy (chopped up into states) as the royal road to prosperity.The issues of equitabpe tax revenue sharing are technical and, again driven my markets. Equalization may require subsidy but no real attack on markets.
On the other end one encounters the free wheeling organs of the UN based international community and its technocratic, ideological, and self-described visionary claque. They continue (for as long as the OECD has been peddling its vision) to put forward the possibility of dismantling markets and what they call the hegemony of leading states. Much of this represents a refinement and updating of ideological oppositions first taken by the post-colonial and developing states in the 1960s-1980s (but who reads yesterday's paper anymore). Well, I have, and that puts things in perspective--for both sides (Odious Debt Wears Two Faces: Systemic Illegitimacy, Problems, and Opportunities in Traditional Odious Debt Conceptions in Globalized Economic Regimes). To some extent, they had a point--no one is going to go in on profitability activity unless it is worth their time--unless they are compelled. Of course it is one thing to approach the issue from the insider and quite another to use this (as it has been used for half a century) as a club to beat markets out of global systems. One ought to have no objection to these politics. But at the same time one ought to be warty where the flank attacks on core principles and narratives of global human social relations are actually up for debate, then that ought to be undertaken transparently.
In the meantime the squabbling commences its next round. The reporting follows below. And while they are at it, an open conversation about the definitions of tax dodging (always a relational and policy issue), tax rates (usually an issue of definition transnational markets and production processed in a dynamic area), and the end of the practice of pretending that the hurling of statistics (without definition) is meaningful in any way except as a political and narrative projectile
OECD ‘disappointed’ over ‘surprising’ UN global tax report
The U.N. chief pushed for a bigger say in the international tax agenda and said the group of wealthy countries had ignored the needs of developing nations.
The report, which will be finalized in coming weeks, analyzed current international tax cooperation arrangements and laid out U.N. Secretary-General António Guterres’ vision to ensure they better serve the needs of developing countries.
“Enhancing the U.N.’s role in tax-norm shaping and rule setting, fully taking into account existing multilateral and international arrangements, appears the most viable path for making international tax cooperation fully inclusive and more effective,” Guterres said in the report.
For decades, international tax policy has been dominated by the Paris-based OECD — a group of mostly high-income countries such as the U.S., the U.K. and Japan.
The outsized influence of wealthy countries on the organization’s policy agenda has led many developing countries, including some OECD members, to question its efficacy in setting equitable global tax standards.
At the end of last year, the U.N. General Assembly adopted a resolution from African member states calling to scale up efforts to combat illicit financial flows and tax evasion. The new report was mandated by the resolution and will be debated at the next session in September.
In the report, Guterres acknowledged OECD efforts to engage non-members, but added that “many of those countries find that there are significant barriers to meaningful engagement in agenda-setting and decision-making.”
“As a result, the substantive rules developed through these OECD initiatives often do not adequately address the needs and priorities of developing countries and/or are beyond their capacities to implement,” he said.
Manal Corwin, director of the OECD’s Centre for Tax Policy and Administration, told ICIJ via email that the organization was proud of its “proven track record enabling significant changes in the international tax landscape that have benefited developed and developing countries.”
“It is disappointing that the U.N. report, while purporting to analyze existing arrangements in international taxation … , chooses to ignore the positive impact of the most significant changes and concrete results that have been delivered over the last two decades,” Corwin said.
She added that it was “surprising” the U.N. had chosen to ignore favorable assessments of the current state of OECD collaboration submitted by U.N. member states for the analysis, resulting in “a number of inaccuracies and misleading statements.”
In 2021, the OECD brokered a high-profile global tax agreement between more than 130 countries, which included a minimum 15% corporate tax rate for multinationals. It was hailed by negotiators as a landmark step towards curbing tax avoidance, but its implementation has been beset by delays.
ICIJ investigations such as the Paradise Papers and Lux Leaks have highlighted the staggering scale of corporate tax dodging by some of the world’s biggest companies. The Paradise Papers exposed tax maneuvers by more than 100 corporations, including Nike and Apple, which shifted profits around the world to accumulate $252 billion offshore.
A recent report by advocacy group the Tax Justice Network warned that without urgent reform countries could lose nearly $5 trillion to tax havens over the next decade. The group has long pushed to shift global tax leadership from the OECD to the U.N. and for the adoption of a U.N. tax convention.
Guterres’ report offers three options for debate, including a legally binding framework convention, similar to the one favored by advocates, to establish an overarching system of tax governance.
In a statement, Tove Maria Ryding, tax coordinator at the European Network on Debt and Development, labeled the tabling of the proposal “a truly historic moment in international tax cooperation.”
The OECD had always worked closely with other institutions, including the U.N., Corwin said, and would continue its “constructive collaboration to serve the interests of stakeholders without duplicating efforts and unnecessarily depriving jurisdictions of needed resources.”
But Ryding called for the organization to cede some of its influence: “The OECD process has never been global. We need global tax negotiations to be transparent, fair and led by a body where all countries participate as equals. The U.N. is the only place that can deliver that.”
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