Collectif Tax Justice – Lëtzebuerg has invited Richard Murphy, a major contributor on the subject of tax justice, to address attendees at a GSNews Conference on Tax Competition, being held at the Tramsschapp in Luxembourg-Limpertsberg (49a rue Ermesinde) on Wednesday 13 April at 18:30.

The conference is entitled "Tax Competition: windfall for some, harmful for everybody else? Why the global economy cannot afford a race to the bottom". Richard Murphy, author of “The Joy of Tax”, will be the guest speaker.

What is tax competition? Tax competition occurs when different governments compete to attract capital to their own countries. Most of the time, it involves granting preferential treatment to companies and offer them minimal or zero tax rates. Those methods have become more prominent and important in recent years, as multinational companies are located in different countries and have made extensive use of them to reduce what they consider to be their tax burden.

Supporters claim that lower corporation tax rates encourage investment and allow firms to make bigger profits, which in turn could be spent on research and development, as well as reinvested. This in turn would lead to more job creation, and therefore higher income tax revenue, compensating for revenue lost in the first place. Conversely, critics of tax competition argue that available data does not allow to confirm these claims: when a government cuts corporation tax, there is not automatically an increase in labour productivity or an increased efficiency in the use of resources. It only means firms get to keep a higher percentage of their profits. Rather than enabling a degree of wealth redistribution between rich and poor, tax competition encourages holders of mobile capital to shop for tax breaks and subsidies, rather than investing in a sustainable manner. As a result, tax competition invariably results in social harm and economic failure: between Nation states, this competition can lead to a “race to the bottom”, which is detrimental for public revenue and spending, especially in an age of generalised austerity policies.

Political economist Richard Murphy, the inventor of the country-by-country reporting principle and the author of a number of articles and books on economics, most recently “The Joy of Tax” (London: Bantam Press, 2015), has been studying tax competition for many years. He makes a strong case against tax competition: "With public services crumbling in many developing countries – and with even developed countries being forced to switch the tax burden increasingly away from capital and onto middle and lower income earners – the case for combating tax competition to protect markets and societies from predatory practices is compelling."

Richard Murphy (57) is a chartered accountant and a political economist, described as an “anti-poverty campaigner and tax expert”. He is Professor of Practice in International Political Economy at City University, London. According to International Tax Review, Richard was the 7th most influential person in global tax in 2013. In 2015, Richard was named as the Economic Justice Campaigner of the Year by the Sheila McKechnie Foundation.

Free to attend; no registration needed. For further details, see https://www.facebook.com/events/1686291401635356/