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While our national economic discussion centers largely around slogans about WINNING and, on the other side, timid technocratic pablum, it is useful to keep in mind this fact: multinational corporations are robbing the entire world blind.

The idea that the policies of individual national governments around the world pose hard restrictions on the economic activity of multinational corporations is... not true. The public perception (to the extent there is one) of tax policies and how they affect business and where tax rates should be set is virtually meaningless if everyone doesn’t understand that the biggest and most powerful companies today practice global tax avoidance on a truly mind-boggling scale. A recent study by a team led by the economist Gabriel Zucman points out that even though the past three decades have seen “the global average statutory corporate tax rate fell by more than half, from 49% to 24%”—ostensibly because such tax cuts attract business in a global marketplace—the reality is that countries may be simply giving up on taxing multinational corporations because of their persistent use of tax havens. They write (bolding ours):

By our estimates, close to 40% of multinational profits were artificially shifted to tax havens in 2015. This massive tax avoidance – and the failure to curb it – are in effect leading more and more countries to give up on taxing multinational companies. The decline in corporate tax rate is the result of faulty policies in high-tax countries, not a necessary by-product of globalisation.

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And how much does this cost the public? “Tax avoidance by multinationals reduces EU corporate tax revenue by around 20%.”

Tax haven countries essentially draw (a relatively small amount of) tax revenue to themselves at the cost of robbing other nations of (a much larger amount of) tax revenue. Large corporations are the winners in this race to the bottom. Tiny tax haven nations with small populations come out okay. Big, developed nations with large populations lose out on many billions of dollars each year that could be used for the public good.

It is possible to crack down on tax havens using united diplomatic fronts and coordinated economic penalties but to do so you would first need world leaders who placed the good of the public over the balance sheets of public companies.