Principles of a Just International Tax Regime

Subject Matter

Over the last 30 years or so, capital mobility resulting from technological advances and the end of exchange controls has led to tax competition. By lowering tax rates on individual savings as well as on corporate income, governments hope to attract portfolio and direct investment. Empirical research has shown that individual countries do not always benefit from tax competition, but that they might gain from cooperation. In determining what form this cooperation should take, two questions are of central importance:

1. What normative principles should underlie international cooperation on fiscal policy? At the same time, what other, conflicting normative principles, for instance, sovereignty or economic efficiency, would international cooperation have to respect?
2. Which fiscal policies are most likely to ensure that the selected normative principles would be implemented in practice?

This cooperative venture between a philosopher and a political scientist seeks to determine the types of institutional structures necessary for international tax justice, emphasizing, in particular, the feasibility constraints on such institutions.

Relationship to the Research Unit’s Program

The research unit’s program describes the transition from international cooperation which traditionally confines itself to developments at the interfaces of countries (at the border issues), to global governance which also deals with behind-the-border issues. The regulation of tax competition requires deep intervention into spheres that have customarily been the prerogatives of the nation state. The aim of this project is to contribute to the development of normative principles for good global governance.