Obama’s tax crackdown
David McNair of Christian Aid has a post on Comment is Free, saying that Obama’s crackdown on tax havens won’t do anything for developing countries. Aside from the observation that it wasn’t meant to, David’s wrong. Any crackdown on tax evasion is a step towards a better global economic system.
What Obama has done throws into sharp focus the issue of tax evasion by major corporates. The precise shape of his measures are defined by the need to do something at national level only. It would undoubtedly be better for developing countries if such measures could be taken multi-laterally, but even so, the impact of Obama’s package will be huge because of the size and global reach of the US economy.
And, of course, merely raising the issue so publicly will raise awareness of the immorality of the behaviour of multinational enterprises, and show other governments that it is possible to take on the tax havens and the multinationals – a reminder that in democracies, governments do have power.
Plus, and this is of course the main purpose of the move, Obama will have more scope to boost the economy and create jobs.