Multinational Corporations Avoid $200 Billion in Taxes Through Profit Shifting, Exacerbating Inequality
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Multinational corporations avoided $200 billion in taxes in 2020 through profit shifting to subsidiaries in tax havens. This causes inequality as smaller companies pay more.
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The biggest winners are the corporations saving billions in taxes, and the tax havens receiving the shifted profits, like Netherlands, Ireland, and Cayman Islands.
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Germany and other developed countries lose the most tax revenue from profit shifting. Brazil lost $7 billion that could have helped 4 million families.
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Profit shifting is often technically legal but morally questionable. Pricing of intangible assets makes it hard to prove abuse.
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OECD tax deal has not reduced profit shifting. Researchers propose minimum 20% corporate tax rate to raise extra $250 billion in annual global tax revenue.