Migration 8B.6 onwards Flashcards
What is an example of a tax haven and what % is its corporation tax?
Bermuda, 0%
What is an example of a non tax haven and what % is its corporation tax?
Kenya, 30%
What is the application for globalisation increasing the use of tax havens (transport tech)?
Lewis Hamilton moved to Monaco, if you stay a resident for 6 months you can be tax-free on worldwide income
How does globalisation increase the use of tax havens (transport tech)?
Easier for rich individuals to move so population growth so more spending so positive multiplier effect so further investment
What is the application for globalisation increasing the use of tax havens (comms tech)?
Fibre optic cables transfer data at the speed of light
How does globalisation increase the use of tax havens (comms tech)?
Increased flows of info so increased awareness of tax havens so increased flow of capital to tax haven so further growth in related job sectors e.g. finance so growth of specialism and further use of tax haven
What is the application for globalisation increasing the use of tax havens (growth of TNCs)?
Nike in Bermuda
How does globalisation increase the use of tax havens (growth of TNCs)?
Larger market size so bigger target audience and more sales so increased economies of scale so increased profit so encourages use of tax havens by TNCs
What is the application for tax havens benefitting individuals?
Reduce Lewis Hamilton’s income tax
How do tax havens benefit individuals?
Reduce tax liability so more disposable income so more purchasing power and reinvestments into assets which increase long-term wealth
What is the application for tax havens costing individuals?
Jimmy Carr called ‘morally reprehensible’ by Boris Johnson and has suffered from depression since scandal
How do tax havens cost individuals?
May suffer reputational damage - important if known as a public figure as future career can be impacted based on poor public perception
What is the application for tax havens benefitting TNCs?
Nike in Bermuda
How do tax havens benefit TNCs?
Less tax burden so more retained profits which can be used for investment into research and development so more innovation and sales
What is the application for tax havens costing TNCs?
2011 Starbucks boycott - paid no corp. tax on UK sales so reputational damage
How can tax havens cost smaller companies?
Outcompeted by larger businesses as don’t have revenue to invest in tax haven and pay more in corp. tax which limits ability to invest
How do tax havens benefit governments in a tax haven country?
Attract money and people to country which creates jobs due to more spending so more employment and less need to spend on welfare payments so improved gov. budget
What does Africa have the largest amount of (tax havens)?
Capital flight as a % of GDP
What % of corp. tax does Kenya have and how many average years of schooling are there?
30%, 5-6 years
How do tax havens cost governments in non-tax haven countries?
Experience capital flight so less tax revenue and less budget to spend on education so country’s development is held back
What is the case study for using increased gov. intervention as an alternative economic model to capitalism?
Sweden
What % of the population in Sweden pay the top rate tax (increased gov. intervention as an alternative to capitalism)?
15%
How many children in Sweden get free school meals (increased gov. intervention as an alternative to capitalism)?
All children (more budget spent on social development)
What is the case study for prioritising community as an alternative to capitalism?
Buen Vivir