I've discussed the weakness of George Osborne's logic on corporate inversions and have already suggested anti-inversion legislation as one possible mechanism for tackling this issue, which I believe could be acceptable even in the EU context.

There is another way of tackling this competition. We could cooperate with other nations in challenging that competition, either in an EU or OECD context. There is no reason why we should not. At present nation states are playing a game of 'prisoner's dilemma' in which the worst outcome, in the form of degradation of the corporate tax base, is the result because countries seem fixated on their need not to cooperate with each other on taxation issues. That fixation is, however, completely illogical. They are not just entitled to cooperate, I would suggest they have a responsibility to do so.

Let's explore this. Countries do, as a matter of fact, cooperate on tackling tax avoidance. The OECD Harmful Tax Initiative, the EU Savings Tax Directive, the Global Forum on Taxation, the European Court of Justice, EU VAT, various EU directives, and more are all clear indication of massive cooperation on tax issues and the surrender of significant degree of Westphalian style sovereignty on this issue to other parties. So let's be unambiguous: this tax cooperation is entirely possible, it's just willing that is needed.

That willing is necessary, and should be easy to procure. First promoting competition between states is both illogical and an inherently flawed concept: the theory of competition is based on the idea that those participating can fail. We all know that if states fail the consequences for those living within them, around them, and for the world at large are catastrophic. It takes only a moment's reflection, therefore, to realise that there is no basis for tax competition when its sole aim is to reduce the revenue enjoyed by democratically elected governments.

Second, the ballot box that puts such governments into office is also the only an appropriate mechanism for deciding upon the size of government within a state: the argument that tax competition makes government more efficient is both unproven in fact and fundamentally antidemocratic.

Cooperation on the other hand is very obviously pro-democratic and likely to create more efficient government. First of all it allows an electorate to choose what size of government they want. I have no problem if the electorate of a state wants low taxation and small government if they can deliver that transparently and accountably. I also have no problem if they want a large role for the State. But I do not think it the role of one government to make this decision for another by promoting tax competition. That choice is only available to its people and anyone who argues otherwise is seeking to undermine the nature of democratic society that we currently enjoy. That is a fundamentally dangerous position to take.

Second, cooperation is fundamentally related to efficiency in taxation. Because people and capital are mobile states need to cooperate with each other to supply the necessary information to ensure that people and companies are properly taxed. If they do not operate and tax evasion becomes rife, respect for the law collapses and ultimately society's fall apart. Again, if states do not cooperate in the collection of taxes due to each other (and at present they do not, wholly logically) then a simple form of tax evasion in the form of non-payment is promoted, and this again is very bad news for all those law-abiding people who pay their taxes on time.

Finally, the extent of avoidance measures that are necessary to prevent abuse of the international taxation system when operated competitively are so significant that they impose an enormous burden upon all businesses, whether they seek to be tax compliant or not, and this is a cost that society at large cannot afford. Anyone who argues for tax simplification must also argue for tax cooperation or their position is wholly untenable.

There is, therefore, no doubt that rejection of tax competition is a necessary part of the reappraisal of economics that is essential if we are to recover from the crisis that new liberalism has given us.

What would tax cooperation in this area look like? These things would immediately be apparent:

1) Countries would cooperate in challenging those places that seek to artificially attract passive investment income. Those places challenged might include all usually recognised secrecy jurisdictions / tax havens as well as places like Ireland and the Netherlands who deliberately use their tax systems to convert passive income into what appears to be active income, so securing advantage of the companies who locate or route transactions through their domains. Given the power of the countries that would cooperate the abuse that these small states perpetrate could easily be challenged.

2) Cooperation in information exchange would increase rapidly and those states that refused to co-operate would be subject to sanction. The Stop Tax Haven Abuse Act in the USA is clear indication of what that sanction might look like.

3) Countries that refuse to require transparency on the part of their corporate entities so that the "warm bodies" that own and control them can be identified by all inquiring parties, whether in a tax administration or civil society, will also be subject to sanction of similar form to those who refuse to co-operate on information exchange.

4) The right of countries to tax at source will be reinforced, with consequent change in the OECD model double tax treaty, and with clear advantage being provided to places where real economic activities undertaken, and to developing countries in particular.

5) Cooperation on new forms of corporate taxation will take place with a likely move towards unitary taxation with formula apportionment, the benefit of which will be a massive reduction in cost imposed upon international business in seeking to comply with transfer pricing rules. The tax simplification agenda is, therefore, promoted by this arrangement.

Is any of this possible? Yes, all of it is possible: co-operation clearly happens already.

Is it likely though? Yes, again I think it is. The major state of the world realise that over the next few years their corporation tax yields are going to be challenged and the only way that they can sustain them is through cooperation. At the same time, the gap between the richest and poorest in society is increasing and people are resenting it. They realise that corporation tax abuse is a significant contributor to that increasing gap and they will back their governments in challenging those abusive states that promotes tax competition. Finally, the biggest supporter of this change will be business itself. Multinational corporations want to operate on an international basis at low cost. The existing basis of international taxation, based on transfer pricing rules, separate entity corporate accounting and the arms length principle is so obviously out of date and inappropriate for their purpose that they are will come to demand change, even if the accounting profession will fight them all the way for the preservation of the existing system which yields such fantastic fee income and profits for the Big 4 in particular.

Lastly, is this desirable? Of course it is. We would have a simpler tax regime; a more efficient tax regime; a more equitable tax regime, a more democratic tax regime and increased welfare for almost everyone in the world. That has to be desirable: so desirable that we must be willing to pay compensation to those micro states that would lose. That, however, does not include Ireland or the Netherlands: they can stand on their own two feet without having to steal other people's tax base and revenues.

Watch this space: change is coming. If Obama wins in November it may arrive much sooner than you expect, but the difference will just be one of timing: change is going to happen at some time whoever is in office.