Labour & Tax Justice

Tax evasion and avoidance are common practice among wealthy individuals and corporations. These practices shift the burden to poorer citizens and developing nations, and can lead to the termination of important programs and services. The term “tax abuse” captures the harmful implications of both legal and illegal tax manipulation.

McMaster Researcher

Citation

Bernards, N., O'Brien, R., &; Zhang, F. (2016) ‘Labour and Tax Justice’ in A. Beiler and R. O’Brien eds. Developing Alternatives to Neo-liberalism: tax justice, fair trade, democracy-driven public sector transformation and eco-socialism. South Africa: Rosa Luxemburg Stiftung, pp. 19-30. available at: http://www.academia.edu/19105257/Labour_and_Tax_Justice

 

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What is this research about?

This research aims to facilitate discussion about widespread and damaging tax issues. Researchers emphasize how tax schemes pursued by wealthy individuals and corporations, such as tax havens and transfer pricing, negatively impacts less-well-off citizens and developing nations.
 

What did the researchers do?

In Part I of this project researchers review relevant literature and case studies to explore how corporate tax abuse takes shape primarily through profit shifting and assets transferring. International and national responses to such tax abuse are also discussed.
 
With a particular focus on Africa, Part II outlines examples from the developing world to emphasize key issues relating to tax abuse: tax havens and transfer pricing. Researchers then reflect on case studies to offer insights on the outcomes of several reform strategies.
 
Finally, the researchers designed questions to encourage the consideration and discussion of important tax issues.
 

What did the researchers find?

The researchers maintain that the term “tax abuse” should be used to better capture the harmful nature of both legal and illegal tax manipulation. This tax abuse, such as the establishment of tax havens and the use of transfer pricing, can have devastating results for developing countries. For example, developing countries may lose resources or become destabilized, and local companies may lose money -- all of which inhibit the development of the country overall.  
International and national responses to combat tax abuse exist but have not been impactful. The researchers provide some insights about how to respond to tax abuse. It is recommended that alliances are developed between unions and other key players in society in order to strengthen reform efforts. Further, it is crucial to consider how tax reform strategies are constrained by broader development strategies within the developing country.

How can you use this research?

This research can be used to facilitate discussion in university and college classrooms, such as political science and economics. Outside of the university its primary audience is trade unions, labour and social justice groups.
 

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Research Impacts

Book Tour in South Africa

September 7, 2016

This study was part of a book tour in South Africa that included universities, research institutes, and NGOs. An initiative is underway to translate and distribute the study in Spanish and Korean.

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