Magazine article The Futurist

Global Economy Makes Taxing Harder

Magazine article The Futurist

Global Economy Makes Taxing Harder

Article excerpt

Multinational corporations and wealthy individuals are getting better at avoiding taxes, and the resulting loss of tax revenue may hurt many nations' ability to provide social benefits, according to a United Nations report.

The report estimates that offshore deposit holdings, which cannot be taxed, total $7 trillion to $8 trillon--almost the gross domestic product of the United States. Other tax-avoiding schemes:

* Multinational corporations are shifting reports of profits from countries where the tax rates are high to those where the rates are low.

* More people are working outside their home countries, where it is harder to tax their activities.

* The increasing number of cross-border credit-card purchases over the Internet are difficult to tax.

And to make matters worse for high-tax countries, businesses, investors, and shoppers are flocking to countries that have intentionally lowered their tax rates.

"We see a growing gap between the tax systems that were largely created at a time when national economies were closed, capital did not move, and individuals did not travel much, and the systems that would fare well in the current environment," the report says. …

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