Sunday, November 10, 2019

Tomorrow at McGill: Karen Brown on Tax Policy for Sustainable Growth

Continuing the tax policy colloquium tomorrow will be Karen Brown, Theodore Rinehart Professor of Business Law at the George Washington University Law School, whose working paper is entitled Tax Policy: A Tool to Support Sustainable Growth. The paper examines the World Bank's "Human-Centered Business Model" which was developed by Marco Nicoli in a 2017 paper entitled
"The Human-Centered Business Model (HCBM): A Holistic Approach to a New Model for Doing Business." As Prof. Brown describes it, this project:
details a “common set of corporate goals covering economic, social, and environmental sustainability”  to create a coherent “business ecosystem.” Of a six-pronged approach , the fourth, known as the Fiscal Pillar, is designed to offer governments a menu of options allowing them to implement tax regimes that support efficiency and growth in their economies while providing incentives for enterprises to operate with attention to core principles as well as the considerable costs of doing business in a manner that disserves sustainable goals.
The paper examines the relevant goals and analyzes the prospects for achieving them using tax incentives (which the paper adjudges non-optimal) and varying tax burdens for sustainable and non sustainable business models (which the paper broadly endorses).

The paper notes that Marco Nicoli retired from the World Bank in 2018 but guides the HCBM project in his role as Advisor to the OECD’s Centre for Development in Paris. Surprising, then, that nowhere in the OECD's work on BEPS or its urgent progress on tax challenges arising from the digital economy is there any mention of coordination of these efforts with the sustainable development goals whether through the HCBM project or through the broader financing for development work on mobilizing domestic revenues. A missed opportunity since, as Prof. Brown notes:
Corporate taxes may be inappropriately low when measured by the value of operating in a vibrant and stable global economy sustained by adequate government expenditures.  Treating taxes as costs to shift onto others enables these companies to ignore the important role of taxation in the modern world. Yet a corporate goal of minimizing costs and maximizing profit above all else may operate to impair the effectiveness of governments in supplying the infrastructure and other goods and services necessary to support the basic needs of their residents. 
As editor and contributing author to "Taxation and Development - A Comparative Study", Prof. Brown is uniquely situated to talk about the incorporation (or lack thereof) of sustainability into taxation rubrics, and vice versa. It promises to be a good discussion.

As always, the colloquium is supported by a grant made by the law firm Spiegel Sohmer, for the purpose of fostering an academic community in which learning and scholarship may flourish. The land on which we gather is the traditional territory of the Kanien’keha:ka (Mohawk), a place which has long served as a site of meeting and exchange amongst nations.

The talk and discussion will take place from 3-5 pm in New Chancellor Day Hall room 316; all are welcome to attend. The complete colloquium schedule is below and here.

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