The North-South Dimension to Global Tax Politics: Revealing Insights from Cornell Studies in Money

Taxation plays a crucial role in shaping the socio-economic landscape of countries worldwide. At the global level, tax policies and practices have always been a subject of intense debate and negotiation. The North-South dimension of global tax politics is an essential factor to understand the power dynamics and the economic disparities between nations. With profound insights from Cornell Studies in Money, this article offers an in-depth examination of this highly relevant topic.

The Importance of Global Tax Politics

Global tax politics refer to the negotiations, agreements, and conflicts surrounding tax policies at the international level. It encompasses the efforts of countries to establish fair tax systems, prevent tax evasion, and address the challenges posed by multinational corporations. The outcome of these global tax arrangements significantly impacts national revenues, economic stability, and the overall well-being of societies.

However, global tax politics is not a homogeneous field. The disparities and power imbalances between the Global North (developed countries) and the Global South (developing countries) greatly influence the outcomes of tax negotiations. To unveil this dimension, The Cornell Studies in Money have extensively researched the interactions between North and South and their impact on global tax politics.

Imposing Standards: The North-South Dimension to Global Tax Politics (Cornell Studies in Money)

by Martin Hearson (Kindle Edition)

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The North-South Divide in Global Tax Politics

The North-South divide in global tax politics is characterized by contrasting interests, priorities, and capacities of developed and developing countries. Historically, developed nations have enjoyed more significant influence and power in shaping international tax rules and arrangements. This power asymmetry often leads to policies that benefit the Global North at the expense of the Global South.

Through extensive case studies, Cornell Studies in Money have shed light on various aspects of this North-South dynamics:

1. Double Taxation Agreements (DTAs)

DTAs are bilateral agreements between countries aimed at avoiding double taxation and preventing tax evasion. However, these agreements are often skewed in favor of developed countries. The Cornell research has shown that developing countries face challenges in negotiating favorable DTAs due to their limited bargaining power. This leads to inequitable outcomes that can further exacerbate economic disparities.

2. Tax Havens and Offshore Financial Centers

Tax havens and offshore financial centers have been central to global tax politics. Developed countries often utilize these jurisdictions to attract investments and enable tax avoidance. As a result, developing countries face difficulties in mobilizing domestic resources and combating illicit financial flows. The Cornell Studies in Money provide valuable insights into the consequences of such practices and propose strategies to mitigate their adverse effects on the Global South.

3. Transfer Pricing and Base Erosion and Profit Shifting (BEPS)

Transfer pricing refers to the mechanisms used by multinational corporations to allocate profits and costs between their different subsidiaries. This practice can be exploited to shift profits to low-tax jurisdictions, resulting in revenue losses for developing countries. Cornell Studies in Money offer comprehensive analyses of transfer pricing and Base Erosion and Profit Shifting (BEPS) phenomenon, providing policymakers with essential tools to address these challenges and restore fairness in global tax dynamics.

Strategies for Addressing the North-South Divide in Global Tax Politics

Recognizing the need for greater fairness and inclusivity in global tax politics, Cornell Studies in Money offer valuable strategies and recommendations:

1. Strengthening Developing Countries' Participation in International Tax Policy Forums

Developing countries often lack the resources, technical expertise, and bargaining power to effectively participate in international tax policy forums. Cornell's research underscores the importance of creating platforms that provide equal representation and voice to all nations. This inclusivity can lead to more equitable tax policies and arrangements.

2. Enhancing International Cooperation and Information Sharing

To combat tax evasion and illicit financial flows, enhanced international cooperation and information sharing are crucial. The Cornell Studies in Money advocate for the establishment of a global framework that promotes transparency and accountability. This framework should ensure that tax-relevant information is accessible to all countries, enabling them to effectively enforce tax regulations and prevent revenue losses.

3. Promoting Tax Capacity Building in Developing Countries

To address the North-South disparities, developing countries require strong tax institutions and capacities. The Cornell research emphasizes the importance of providing technical assistance and capacity-building support to promote domestic resource mobilization. By strengthening tax administration and policy-making capabilities, developing countries can assert their influence in global tax politics and achieve fairer outcomes.

In

The North-South dimension to global tax politics is a critical aspect that must be addressed to establish fairer and more equitable international tax rules and arrangements. Thanks to the extensive research conducted by Cornell Studies in Money, we gain valuable insights into the power dynamics, economic disparities, and strategies for transforming global tax politics. By acting upon these insights, nations can foster cooperation and work towards a more inclusive and just international tax system.

Imposing Standards: The North-South Dimension to Global Tax Politics (Cornell Studies in Money)

by Martin Hearson (Kindle Edition)

5 out of 5

Language	:	English
File size	:	10494 KB
Text-to-Speech	:	Enabled
Screen Reader	:	Supported
Enhanced typesetting	:	Enabled
X-Ray	:	Enabled
Word Wise	:	Enabled
Print length	:	240 pages

FREE

InImposing Standards, Martin Hearson shifts the focus of political rhetoric regarding international tax rules from tax havens and the Global North to the damaging impact of this regime on the Global South. Even when not exploited by tax dodgers, international tax standards place severe limits on the ability of developing countries to tax businesses, denying the Global South access to much-needed revenue. The international rules that allow tax avoidance by multinational corporations have dominated political debate about international tax in the United States and Europe, especially since the global financial crisis of 2007–2008.

Hearson asks how developing countries willingly gave up their right to tax foreign companies, charting their assimilation into an OECD-led regime from the days of early independence to the present day. Based on interviews with treaty negotiators, policymakers and lobbyists, as well as observation at intergovernmental meetings, archival research, and fieldwork in Africa and Asia, Imposing Standards shows that capacity constraints and imperfect negotiation strategies in developing countries were exploited by capital-exporting states, shielding multinationals from taxation and depriving nations in the Global South of revenue they both need and deserve.

Thanks to generous funding from the Gates Foundation, the ebook editions of this book are available as Open Access volumes from Cornell Open (cornellopen.org) and other repositories.