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ECPR Futures Lab 2020

Global Tax Governance: What should and what should not be Globalised

Presenter
Miriam Ronzoni
Technische Universität Darmstadt
Authors
Miriam Ronzoni
Technische Universität Darmstadt

Abstract
In a globalized economy and under conditions of high capital mobility, states are no longer capable of determining their fiscal policy in full isolation, tax competition being the most evident – even if not the only – manifestation of such a phenomenon. Yet, it remains to be investigated, from a normative perspective, which implications this has, with respect to both 1) the obligations that states have to one another in a context of high fiscal interdependence and 2) the institutional responses that might be required. From a classical cosmopolitan perspective, international tax competition is a problem simply because it increases inter-individual inequalities, both between and within countries. The natural institutional response to such a normative diagnosis is to move the power to tax – and redistribute – beyond the nation-state. Yet, even if we consider the state as the main locus of obligations of social justice, this need not lead us to conservative and status quo biased views. Indeed, if we care about the state as a provider of social justice, we have reasons to worry about how its fiscal self-determination is currently under threat. To restore the capacity of national institutions to tax “as they see fit”, significant global institutional reforms are also required – yet of a different nature. Global fiscal institutions must be conceived as primarily aimed at tackling the “negative externalities” that deprive states of their fiscal sovereignty – thus restoring background justice between them. This will require a tripartite strategy: 1) move some fiscal powers to the supranational level (yet with extreme caution); 2) harmonize certain fiscal areas; and 3) empower supranational institutions to sanction certain specific kinds of behaviour with an adequate level of effectiveness and certainty.
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