Lawrence Summers, formerly U.S. Treasury Secretary and ex-president of Harvard University, has just written a thoughtful column in the Financial Times. This is discussed on the TJN blog, where the follwoing key paragraph is highlighted:

The US should take the lead in promoting global co-operation in the international tax arena. There has been a race to the bottom in the taxation of corporate income as nations lower their rates to entice business to issue more debt and invest in their jurisdictions. Closely related is the problem of tax havens that seek to lure wealthy citizens with promises that they can avoid paying taxes altogether on large parts of their fortunes. It might be inevitable that globalisation leads to some increases in inequality; it is not necessary that it also compromise the possibility of progressive taxation. Second, an increased focus of international economic diplomacy should be to prevent harmful regulatory competition.

He is right.

As I said here today, this is recognition that the solution to this problem is the creation of a new paradigm for international taxation.