Nobel winning economist Pr Stiglitz visits the Greens in the European Parliament

A blog from our Tax Justice Campaign

Pr Stiglitz did us the honour to come and speak yesterday with Green Members of the European Parliament. As a member of the Independent Commission for the Reform of International Corporate Taxation (ICRICT), together with our Parliamentarian Eva Joly, he is in Brussels this week to launch two new important reports on taxation.

The first report, co-written with Marc Pieth, Swiss expert on money laundering aims at providing solutions to overcome the shadow economy. The second report, from ICRICT, presents four concrete proposals to tackle tax competition. We had a fruitful exchange of views with Pr Stiglitz and Mr Pieth, chaired by MEP Eva Joly, who fought for years against corruption and financial crimes as an investigative judge in France, before joining the Greens in 2009. Pr Stilglitz explained that tax secrecy is at the heart of the problem and allowing people to work in the shadows to evade taxes or launder dirty money remains one of the key issues to tackle. Without the US Congress inquiry on tax in 2012/2013, no one would have even known about Apple dodging taxes and this would not have led to the European Commission’s decision to condemn Ireland to pay back €13 billion on illegal state aid. He also condemned the race to the bottom that European countries are currently playing on corporate tax rates - which Trump could fuel in the US as well by cutting corporate tax rate from 35% to 15%. Competition on tax rates erode the capacity of our Member States to collect money for public expenditures. Finally, he insisted on the fact that our international corporate tax system is not fit to tax big companies anymore. It makes it too easy for large corporate to shift their income into tax havens and avoid the tax man.  The United States actually never applied this system in its own country because it’s too prone to abuse (they adopted a “unitary taxation” approach), so why applying it at the international level? We fully agreed with Pr Stiglitz when he explained that “secrecy havens” are not just Panama or the Cayman Islands. The problem is also about the United States, the UK and other European countries which have an ambiguous position regarding tax dodging. Many of our governments side with their big companies (like the US government with Apple) and some CEOs seem to believe they can even choose their corporate tax rate (like Tim Cooks for Apple). Tax havens only exist because our governments are tolerating them, because of the 1% wealthiest people who benefit from them. As Greens, we fight for meaningful tax reforms in Europe and worldwide towards our ultimate objective of tax justice. When tax evasion and money laundering represent the dark side of the globalisation, how long can we still tolerate the status quo in our democracies?