Tax equity undermined by trade rules, finds new report

🚨🚨 Just out: a brand new @GDPC_BU report with a buncha authors (including yours truly) on the connection between the tax and trade regimes:

Domestic Resource Mobilization and the Trade and Investment Regime: The Need for Policy Coherence (bu.edu/gdp/2020/07/09…)

First up, @devikadutt and @KevinPGallagher show that the great the number of trade treaties a country signs, the more they lose out on tariff revenue — $$ that ends up not being replaced elsewhere.

The result: increase in government indebtedness.

This work was written before the pandemic-induced debt crisis, but is all the more relevant now.

Next up, @Rick_Rowden shows how misinvoicing of customs declarations is rampant, and has become a major way that corruption and oligarchy get fueled.

Then, @rashmibanga calculates the losses to developing countries from not being able to impose tariffs on electronic transmissions (due to a WTO arrangement), and finds a loss of $10 billion a year.

Next, @andrewkerner1 finds that bilateral investment treaties “correlate with reduced fiscal revenue in countries with large natural resources and, conversely, that natural resource rents’ capacity to generate tax revenue declines in the presence of BITs.” #ISDS

Then, @SoniaERolland provides a legal analysis of provisions of WTO agreements that lead to constraints on states’ taxation powers.

Reuven Avi-Yonah explores the WTO’s loopholes around tax-free so-called “special trade zones (STZs),” a gap that permits distortions in trade relations.

Butch Montes describes trade and investment treaties’ “matryoshka structure” that have over time eroded a supposed carve-out for tax policy from the pacts’ remit.

Then, I explore what recent #ISDS cases mean for states’ ability to enact big structural reforms that accomplish many objectives at once. Answer: not promising.

Next, the formidable Jane Kelsey shows how Big Tech firms have increasingly pushed their agenda into the trade space, and how this to makes taxing harder.

Then, @NaiduVahini details recent digital tax-related skirmishes in Geneva.

Last but not least, @denaerachel explores how investment treaties will complicate the looming sovereign debt restructuring.

And in an odd fluke of timing, on the same day, @thomstubbs and @Kentikelenis release a paper on the same day that finds the role that the IMF’s trade stance plays in making taxes more regressive.

Important works! Read them all!

(Adapted from this thread).