Economics Explored

Multinational and Personal Tax Avoidance and Evasion

Episode Summary

The Trump administration has proposed tariffs on French goods in retaliation to France’s new Digital Services Tax. The French Digital Services Tax is one way a government can attempt to tax multinationals such as Amazon and Google which are adept at avoiding taxes. In recent years, there have also been concerns about the ultra-wealthy not paying their “fair share” of taxes. The release of the Panama papers in 2016 was eye opening. To discuss international taxation issues, Economics Explained host Gene Tunny is joined by Professor Pascalis Raimondos, head of QUT’s School of Economics and Finance.

Episode Notes

This episode’s guest is Professor Pascalis Raimondos, head of the School of Economics and Finance at the Queensland University of Technology (QUT), and an expert on international taxation and trade issues.

Use these timestamps to jump right into Gene and Pascalis’s conversation:

• 1:45 – are tax avoidance and tax evasion a major concern?
• 3:40 – thin capitalisation as a way multinationals can minimise tax
• 5:00 – transfer pricing as another way
• 10:25 - having a lot of intangible capital (e.g. Apple, Starbucks) can assist in tax minimisation
• 14:20 - need for international cooperation e.g. formula(ry) apportionment
• 21:35 – Panama papers, shell companies, The Laundromat on Netflix 
• 27:40 – following Piketty, do we need inheritance/wealth taxes?
• 31:25 – economic benefits of Trump corporate tax cut in US
• 34:40 – Pascalis recommends a cash flow tax, which Gene notes was suggested by the tax review led by Australian Treasury Secretary Ken Henry (see the 2010 Final Report)

Gene and Pascalis’s conversation was recorded on 28 November 2019 in Pascalis’s office at QUT, Gardens Point Campus, Brisbane, using a Zoom H4n Pro digital recorder and Shure SM58 microphones.