Why plugging tax loopholes through global consensus isn’t working
Hello, and welcome to Oligarchy. We are tracking how Covid-19 and the world’s response to it is affecting the super-rich — and what that means for power and politics.
BEPS? IT’S INTERESTING, HONESTLY
I have a confession to make: whenever I see the words Base Erosion and Profit Shifting (BEPS), my eyes start closing by themselves. I can, with effort, make it through a page of writing about BEPS before falling asleep altogether but it takes significant effort. It is often claimed that admitting you have a problem is the first step towards solving that problem, and I hope that’s right, because BEPS is ruining the world, and I really need to stay awake for it.
BEPS is the process whereby multinational companies and wealthy individuals route their profits through offshore jurisdictions and – “whoops, butter fingers!” – end up paying almost no tax as a result.
BEPS is depriving governments of the revenues they need to provide essential services, and enriching the already-mega-rich, who occasionally distribute a bit of philanthropy from their winnings, but basically keep the rest. It has a very boring name, but is exceptionally important.