How and Why We Tax Large Multinational Firms The 2015 Annual Public Lecture ”Does Starbucks Pay Enough Tax? – How and Why We Tax Large Multinational Firms” will be given by Professor Rachel Griffith.
The Institute for Fiscal Studies (IFS) is a genuine national treasure. Its enlightenment focus on facts means that its publications are always interesting. Prof Rachel Griffith is theResearch Director at the IFS and gave this really interesting lecture on Corporation Tax at The Royal Economic Society in 2015.
She makes the point that Corporations are not people and when they pay tax it simply redistributes the burden of that tax amongst real human beings. If corporation tax goes up it can be paid for by employees through lower wages, by consumers through higher prices or by shareholders through lower dividends.
She also points out that the level of the tax take provided by Corporations over the past thirty years has been remarkably consistent at around 7% of total tax revenue despite the fact that the tax rate has fallen from 52% in 1980 to 20% in 2015.
In her lecture she looks at the way in which Corporations are currently taxed based upon the location their corporate registration as opposed to where they generate their profits.
It is worth watching the lecture to help clarify some of the issues around a more effective and progressive taxation system that works in a world of global multinational corporations.