Tax planning and inequality SA HANSSON Tax planning and inequality - PowerPoint PPT Presentation

Tax planning and inequality ÅSA HANSSON

Tax planning and inequality • To what extent? – Scandinavia 1.6 % of wealth held in tax havens (3.3% world) – The wealthiest that evade taxes, top 0.01% evades 25-30% of their taxes – Are the measures overestimated? Lower taxes => capital growth • Inequality - increased? – What is relevant? – amount of capital (stock) or income (return) to capital? • What caused the increase? – Property and stock returns – linked to ownership and low interest rate – Wealth not realized, could very easily vanish

Revenue from wealth taxes as share of GDP 4,5 4,0 3,5 3,0 2,5 2,0 1,5 1,0 0,5 0,0 FRA GRB CAN BEL LUX KOR ISR ITA USA JAP ESP NZL ICE DEN CHE IRE TUR FIN NLD POR HUN NOR DEU SWE LAT CHL SVN AUT SVK CZE EST Property Wealth Inheritance Transfer Other - 0,5 Källa: OECD Revenue Statistics

Gini-coefficients 1,0 0,8 0,6 Ginikoefficient 0,4 0,2 0,0 2000 2002 2004 2006 2008 2010 2012 Förmögenhet Disponibel inkomst Arbetsinkomst Källa : Lundberg och Waldenström (2017).

Capital share 40 30 20 10 0 1980 1985 1990 1995 2000 2005 2010 2015 Danmark Frankrike Sverige USA Källa : Bengtsson och Waldenström (2017).

Tax planning and inequality – what to do? • The very wealthy that evades – this group also the most sensitive to taxes. Should, according to optimal taxation, face lower tax rates • Increase exchange of information – To be effective all nations need to participate and enforce rules – At a cost of large administration costs (e.g., FATCA) • Optimal punishment – “hanging taxpayers with probability zero”

Tax planning • BEPS among MNEs: €50 -70 billion in EU • VAT-tax gap: 12 % (€151 billion) of VAT revenues in EU27 are lost due to fraud, evasion and avoidance • Cost benefit analysis – Capital mobility desirable – Tax planning undesirable Weigh the costs against the benefits?

Källa: Lundberg och Waldenström 2017

400 300 200 100 0 -100 1980 1985 1990 1995 2000 2005 2010 2015 Nettoförmögenhet Icke-finansiella tillgångar Finansiella tillgångar Skulder Källa: SCB och Waldenström (2016, 2017).