The European Union and the Erosion of State Capacity

The broad assumption in Europe is that member states of the European Union inherently have the capacity to implement EU legislation. This proceeds from the general understanding of Weber’s definition of the modern state as having a monopoly of legal violence within its territory. To this can be added the capacity of the state to “read” the population, to know through censuses, registers data bases who the inhabitants of the state are and, for that matter, where they are; the ability to impose taxes; and the capacity to sustain the uniform distribution of authority.

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Tax Transparency: too little, too late

As far as individuals are concerned, international problems can be tackled through increased tax cooperation and transparency. As to corporations, on the other hand, taxing multinational groups at arm’s length together with an increase of tax cooperation would not solve the problems of global tax law. In this case, the problem lies in the structural principles behind international taxation of multinational groups and, therefore, a reaction based only on tax transparency is clearly insufficient.

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Tax Evasion and Human Rights

The United Nations Covenant should be interpreted to prohibit state mandated bank secrecy, which facilitates tax evasion by wealthy residents of the developing world. In other words, bank secrecy laws of Lichtenstein, Panama, and Switzerland, for example, violate internationally recognized human rights.

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Why Transparency Alone Will Not Suffice To Fight Tax Evasion

I am skeptical about the effectiveness of a shift towards more transparency. I do not believe that this could help overcoming the growing gap between legality and legitimacy in international tax law. Especially, I do not see how the gap can be reduced by making taxpayer information public. Or better, I do not believe this is the right path that States should pursue.

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Privacy and Tax Evading

Privacy, at least with respect to taxes, is the shield of the villains. The legal or constitutional issue should not focus on preventing the flow of information but rather on the way the informed uses the information.

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Panama Lessons: Less Privacy, More Tax Justice

Information is the new currency of international tax policy. Countries have successfully developed techniques and strategies to enhance the flow of tax-relevant information across borders. This shift requires adaptations with respect not just to human rights but to democracy: Lawyers should reconsider the traditional core of parliamentary power to tax. Democratic assent to the imposition of taxes needs to be informed consent. As long as lawmakers cannot assess the economic impact of existing and new tax rules in a global environment, lawmaking is a blind flight.

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The Panama Papers: What Should Be Done?

If the U.S., the European Union, and Japan were to agree to impose a tax on income flows to tax havens, the tax-evasion problem would largely be solved without the need for cooperation from the havens. Using a 30 percent tax will do the trick. What prevents this obvious solution from happening is that the U.S. is willing to aid and abet tax evasion by Europeans, while the EU is willing to aid and abet tax evasion by Americans. This reflects the political power of the rich on both sides of the Atlantic.

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The Panama Papers: Six Preliminary Observations

The Panama papers is a treasure trove of information on the activities and clientele of a large, but not atypical, legal firm operating in an offshore financial centre or the tax haven of Panama. It follows a series of spectacular leaks by the International Consortium of Investigative Journalists that included the Lichtenstein leak, HSBC, the Lux-leaks and now the Panama papers. What have we learned from this latest leak so far?

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