Global Tax Governance – Normative and Institutional Issues

Under capital mobility, the fiscal policies of different states become interdependent. The setting of tax rates as well as other regulatory decisions trigger shifts in the tax base between states. In recent decades, these dynamics have developed into a full-fledged tax competition between jurisdictions. Tax competition has two important consequences. First, the pressures it creates, in particular on the taxation of capital, undermine the effective sovereignty of states in their fiscal policy. Second, by shifting the tax burden onto less mobile factors like labour or consumption, tax competition tends to exacerbate income inequalities both within states and across borders. The normative questions raised by tax competition are at the heart of this workshop: What should be the fiscal prerogatives of states? What constraints should these prerogatives be subject to? The workshop invites experts on fiscal issues from the fields of international political economy and political theory to formulate the normative principles that should inform global tax governance in the 21st century as well as to draw up the institutions that will be necessary to respect these principles at various levels of governance. Recent initiatives of both the OECD and the EU to curb tax competition have thus far remained largely unsuccessful. By combining reflection on normative principles and institutional design, the workshop aims to make a contribution to change this.