EQ2 - Tax Havens - MIGRATION

Question 1

Tax havens

Answer 1

Is an area where tax is collected ata low rate
- £13.5 trilllon is loss to tax havens
- estimated of $21 - 32 trillion of private financial wealth is located in untaxed or lightly taxed havens around the world cause countries i such as Africa to go in debt
- with rich countires also suffering s they suffer a global financial crisis such as Greece and Portugal
- many tax havens are located in Central America, Switzerland and Hong Kong
May cause reputation damage
- does not attract business

Question 2

CASE STUDY EX OFA tax haven

Answer 2

• in 2010 a petrochemical company moved headquarters form the Uk to Switzerland and saved half a billion pounds over 5 years as tax was 10% lower
• Apple has 89% of wealth held abroad

Question 3

Primary use of tax havens locations

Answer 3

• avoid tax
• hide criminal activites form view
• activites can be anonymous form view even if legal
• seek somewhere cheaper to do business

Question 4

The emergence of new markets + states

Answer 4

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Question 5

For views of tax havens ( Advantages)

Answer 5

For Tax havens
- pay low or no tax or profits
- companies go to tax havens for reasons such as regulating quality of legislation, stability etc
- legal

For other countries
- offer political stability for tax havens As well as secure banking and legal systems

Question 6

Against views of tax havens

Answer 6

For tax havens
- Action taken by G20 countries to name + shame tax havens
- hiding criminal activity
- Some have political instability and curroption
- exploits that ppl in countries want to pay less tax

For other countries
- less security
- less tax going back to economy
- NGOs organised protests and boycott to pressure governments to clamp down on tax avoidance
- regulations differ for countries so hard to find info on tax havens

Question 7

Tax Havens CASE STUDY - Iceland

Answer 7

• accused of giving tax breaks
• Friendly treatments of TNCS such as Apple with low tax rates at 12.5%

Question 8

Tax Havens CASE STUDY - France

Answer 8

• Five french national banks have to branches in the Cayman Islands and cleared profits of $45 million

Question 9

Tax Havens CASE STUDY - UK

Answer 9

• controls 1/3 of world tax havens where billions of dollars are hidden which the UK has effective control over them

Question 10

Global inequality

Answer 10

• 800 million go hungry globally everyday
• 1,400 women die everyday due to illnesses due to pregnancy
• income inequalities across the world
• Gini coefficient ???
• relate to Lorenz curve

Question 11

What are the consequences of Extreme inequality?

Answer 11

• barrier to poverty reduction
• Undermines growth
• hinders poverty which reduces potential growth
• environmentally destructive
• drives inequality in health, education + life chances
• hurts all and threatens society
• fuel violence
• living in fear

Question 12

Global inequality CASE STUDY - Bolivia

Answer 12

• Chnaged free market philosophy
• the first President came form an indigenous population was in charge since 2006 and was elected to turn against neo liberalism
• allied with South American countries
• nationalised the country’s gas and oil industries in 2007
• worlds fastest growing economy
• TNCs were kicked out as they privatised water industrie and mad dit less affordable for economy
• reduced primary exports and boost domestic manufacturing
• redistributed wealth to peasant classes
• comic strategy depended on nationalising bolivias oil and gas industries
• increased gas connections and telecommunications
• improved healthcare, education, in mount etc
• reduced wealth inequalities and lower government debt