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Religion and Political Theory: Secularism, Accommodation and The New Challenges of Religious Diversity, Edited by Jonathan Seglow and Andrew Shorten

Two Challenges for Global Taxation

Thomas Rixen
University of Bamberg
Thomas Rixen
University of Bamberg
Peter Dietsch
Université de Montréal

In this paper, we argue that shifting fiscal powers to a higher, supranational level of govern-ance can only ever be an incomplete response to the phenomenon of globalisation. It needs to be complemented by an increased attention to the ways in which globalisation undermines the effectiveness of existing governance structures, notably of formally sovereign states.
The first, and central, part of the paper provides a detailed analysis of the challenges globali-sation generates for fiscal policy. First, how can the shifting of fiscal prerogatives to a supra-national level be squared with the principle of subsidiarity, which calls for government com-petences to be attached to the lowest level of government that is capable to address them? A key distinction in this context is the one between shifting actual fiscal competence to a higher level of governance versus international cooperation to better protect the fiscal prerogatives at the lower – e.g. state – level of governance. Second, when aspects of globalisation like the mobility of capital undermine the policy-making capacity of a given level of governance, what can be done to restore this capacity? We argue that the answers to these questions depend in part on the type of fiscal competence – financing of public goods, redistribution, managing the business cycle – in question.
The second part analyses three policy proposals on global taxation and asks which of the two challenges they are a response to. The policies are a Global Resource Dividend, a Financial Transaction Tax, and a proposal to regulate tax competition.
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