In this release from Oxfam, it is estimated that in order to end extreme poverty worldwide, everyone would have to be able to make at least $1.25 per day, or a total of $66 Billion. That said, Oxfam estimates the total amount of taxes being avoided (and thus kept out of "the public purse") is $156 Billion, or as they say, "enough money to end extreme poverty twice over". Moreover, that figure doesn't include the total impact of tax avoidance:
The $156 billion (£102 bn) of lost tax revenue estimated by Oxfam is just a fraction of total tax loss, as it only reflects the amount of tax individuals are neglecting to pay and doesn't include the tax dodged by companies that costs poor countries more than $160 billion (£105 bn) a year.
As noted by The Verge (and is admitted in the Oxfam report):
How reliable Oxfam's estimate is remains unclear; the very nature of tax avoidance makes a solid figure difficult to ascertain.
The solution recommended by Oxfam? Blacklists and sanctions:
Oxfam is calling for a blacklist of tax havens, and agreement that EU member states will impose countermeasures sanctions against tax havens and those using them.
But, how would that help end world poverty? I don't think that is the point. The tax figures are compared against world poverty for shock value. And, frankly, I am shocked. Just a little more than one dollar a day for everyone in the world would end extreme poverty? That is shocking and quite humbling. Nevertheless, would collecting outstanding taxes solve poverty? Would the tax revenue collected make it into the hands of the world's poor? Highly unlikely. The tax revenue that is currently collected barely makes it farther than the bottom of the government's pocket. Still, the point is made that the uncollected and sheltered money is doing no good, period.
As an initial solution, blacklists and sanctions make sense to me. Yet, why stop at sanctions? For example, if a U.S. company earning U.S. money from U.S. people moves said money to another country to avoid paying U.S. taxes, why not recoup the lost taxes by enacting an increased U.S. tariff on that country's goods shipped to the U.S.? If American Big Company (ABC) finds tax shelter in an arbitrary country X, then anything country X expects to export to the U.S. or expects to use in the U.S. (such as company ABC's money in the U.S. stock market) should be subject to a tariff sufficiently large enough to either recoup the lost tax revenue or dissuade country X from allowing company ABC to find shelter there.
So far, all of the solutions floating around out there are trying to get company ABC to pay taxes on money they are not legally obligated to pay. They have the ability and the right to move their money to country X and pay country X's taxes (if any) because that is how the law is structured. Could the law be changed to force ABC to pay U.S. taxes on all of its earnings? Yes, but it wouldn't work and could even be detrimental to the economy. However, instead of going after ABC, why not go after country X? If country X hurts enough, I wager that company ABC is politely asked to leave. What if ABC then goes to country Y or Z? The same solution applies. Sooner or later, ABC will come crawling back to the U.S. and when they do, they will have to pay their dues.
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