CERNOBBIO, Italy — Nobel economics prize laureate
Joseph Stiglitz praised international backing for a global tax on corporations
but said the minimum rate agreed by governments to battle "the dark side
of globalization" remains too low.
اضافة اعلان
More than 130 nations have supported a plan to introduce a
tax floor of at least 15 percent aimed at preventing countries from competing
to offer the lowest rates in order to attract multinationals seeking to
minimize their tax bills.
"It's a fantastic initiative," Stiglitz told AFP
on the sidelines of the Ambrosetti Forum, an economics conference next to the
scenic Lake Como in Cernobbio, Italy.
"The system of multinationals' taxation, which is over
100 years old, is not suited for a 21st century globalized economy," he
said.
The global tax reform was agreed in negotiations led by the
OECD and at a meeting of finance ministers of the Group of 20 wealthy and
developing countries.
Final agreement is expected in the run-up to the G20
leaders' summit in Rome in October, with hopes the reforms can be in place by
2023.
But the American economist said 15 percent is "too
low".
"I think it should be 25 percent, but politics is the
art of compromise. I hope they do at least 20 percent," he said.
'Dark side of globalization'
The United States, France and Germany are among the powers
that have backed the imposition of a minimum rate to end a "race to the
bottom".
But some nations are opposed to the plan, most notably
Ireland, which has lured the likes of Apple and Google to its shores with a
12.5 percent rate.
"The system we have now is open to abuse and that is
one of the reasons why the effective tax rate is so much lower than the
official rate," Stiglitz said.
"The race to the bottom in which Luxembourg and Ireland
played a role undermined global solidarity, it undermined the global economic
system, it is part of the dark side of globalization."
He said the agreement has also put an end to a
"terrible tax war" that started under the Donald Trump presidency
which slapped retaliatory tariffs on wine and other EU products in response to
digital
taxes imposed by France, Spain and others on US tech companies.
It "would have been a disaster if that kind of tax war
proceeded," Stiglitz said.
Stiglitz vs austerity
The 78-year-old academic, who was a senior economic adviser
to President Bill Clinton in the 1990s, touched on another one of his favorite
bugbears: Austerity.
Stiglitz warned that the European Union should not return to
its belt-tightening ways after the bloc rolled out a massive, 750-billion-euro
fund to bring its 27 members out of their coronavirus-induced economic crisis.
"Europe came together and did the 750 billion European
Recovery Fund which was the kind of thing that they should have done during the
euro crisis in 2010," he told AFP.
"They provided the money without the austerity
conditionalities they did in 2010," Stiglitz said.
During the eurozone debt crisis, European leaders imposed
austerity measures on Greece, Ireland, Portugal, and Cyprus in return for
bailouts.
The EU has dished out the first tranche of the rescue fund
over the summer.
"But my impression is that there is not a high level of
trust to get the second tranche," Stiglitz said.
He said it was a "good thing" that conditions were
not set to get the first batch.
"They gave some money because of the urgency," he
said.
"But if they fall back in the old way of being
excessively tight on the conditionality and not give the second tranche because
they will say 'you didn't do this or that', some of the old problems could
re-arise."
With German Chancellor Angela Merkel — an austerity champion
— bowing out, "maybe the new German government will also be more
flexible", the economist said.
But, he added, "That's still an open question."
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