Governments and policymakers should heed the report’s “ominous warnings”, said the institution’s regional director for Europe. A World Health Organisation (WHO) report has linked declining levels of trust between people and institutions across Europe to yawning inequality.
There is a macro problem here, outside the typical neoliberal tension in national politics. People can easily move country today, and people are inherently self-interested. Wealthy people, who pay the majority of tax, can therefore move to where they receive preferential treatment. This is leading to tax-shopping, and immense downward pressure on tax levels.
I don't see an easy solution to this. Some countries have experimented with exit taxes, but these lose elections and have consistently resulted in poor outcomes. The recent efforts by OECD nations to create a corporate tax floor of 15% is admirable, but most countries won't sign up. This leaves many nations to which companies can relocate. Further, 15% is weak.
I fear the only solution here is going to require some form of restriction on movement. Perhaps the OECD nations set up a common tax bloc. Then, should a wealthy individual or company decide to permanently emigrate outside the bloc, they are banned for life from returning or doing business in the bloc. This would provide ample disincentive for leaving the bloc, while allowing taxes to remain at levels to sustain social programs for the poor. It's a terrible, messy solution, but I don't see any other way to stop this race to the bottom.
Something like that, perhaps, but Americans can renounce their citizenship and exempt themselves from that tax. Many wealthy people do just that, and it doesn't prevent them from re-entering the country as a tourist and living their best lives. The standard tourist visa offers 180 per visit, so they just need to go on vacation a couple times a year.
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