Tax Havens And Global Poverty

Question: Describe about the Tax Havens And Global Poverty? Answer: A notable threat that is connected with the political and economic systems states that it is highly hazardous when the economic resources are concentrated in the hands of minimal people. (Dharmapala, n.d.) (Palan, R., Murphy, R. and Chavagneux, C. (2010)) Tax obligations are avoided by most of the citizens who reside in the wealthiest nations which is calculated to be an enormous amount when compared to foreign aid and grants. (Cox, n.d.)The calculation of around $21-32 trillion is unrecorded and allocated offshore. The Tax Justice Network stated that if these financial assets were reported to the corresponding officials of the Tax Department then the seized amount will generate revenue of $280 billion annually. When properly accounted it was found out it was double the amount that the OECD Countries engage in expenditure on all sorts of development assistance. (Tax Justice Network, 2015) Some of the wealthiest companies like Google and Apple, acquire a large proportion in the economic pie and in spite of such contribution and superior position, they repeatedly get involve in capital brawls to tax havens. (Jalan and Vaidyanathan, n.d.)The government, on the other hand, toil with the diminishing revenue and these affluent companies remain busy in the capital conflict. The impact of the tax havens is in the working class and people of middle income groups. The burden of tax gets transferred to them. The tax evasion by the richest and wealthiest individuals deprives the middle class of the public services as government cannot generate enough revenue from taxation and thus they cannot spend on the improvement and development of the public goods and services. (Meyers, D. (n.d.)) The effect of the tax havens is unfavorable for the society and augments the global poverty situation. The reason behind the fact that most of developing economies get trapped in the vicious cycle of poverty lies in the extreme use of tax havens in these nations. (Gaisbauer, H., Schweiger, G. and Sedmak, C. (2015)) A report based on Christian Aid states that they have identified some of the practices that led to tax avoidance. These are transfer pricing, intra company loans and companies try to maintain extreme secrecy by using certain legislative measures. These practices exhaust the revenue worth $160 billion per year. It is believed by the Christian Aid that this amount if acquired had the ability to redeem the lives of around 350,000 children annually. (Longley, 2015) Thus, the notion that tax havens create global poverty is supported by me. References: Cox, N. (n.d.). Tax and Regulatory Avoidance Through Non-traditional Alternatives to Tax Havens.SSRN Journal. Jalan, A. and Vaidyanathan, R. (n.d.). Tax Havens: Conduits for Corporate Tax Malfeasance.SSRN Journal. Dharmapala, D. (n.d.). What Problems and Opportunities are Created by Tax Havens?.SSRN Journal. Longley, K. (2015).Tax havens exacerbating global poverty. [online] Melissaparke.com.au. Available at: https://www.melissaparke.com.au/speeches/616-tax-havens-exacerbating-global-poverty.html [Accessed 4 Mar. 2015]. Tax Justice Network, (2015).Inequality Tax Havens - Tax Justice Network. [online] Available at: https://www.taxjustice.net/topics/inequality-democracy/inequality-tax-havens/ [Accessed 4 Mar. 2015]. Gaisbauer, H., Schweiger, G. and Sedmak, C. (2015).Philosophical Explorations of Justice and Taxation. Cham: Springer International Publishing. Meyers, D. (n.d.).Poverty, agency, and human rights. Palan, R., Murphy, R. and Chavagneux, C. (2010).Tax havens. Ithaca, N.Y.: Cornell University Press. BIBLIOGRAPHY Azzara, T. and Azzara, T. (2003).Tax havens of the world. Nassau, Bahamas (P.O. Box CB 11552): New Providence Press. Dharmapala, D. (n.d.). What Problems and Opportunities are Created by Tax Havens?.SSRN Journal. Murray, R. (2012).Tax avoidance. London: Sweet Maxwell.