What is unitary tax (apart from something that would make banks pay a lot more in the UK)?

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I've written this morning about new research that shows that Barclays and HSBC appear to under pay tax in the UK compared to their share of economic activity in this country. To show this Meesha Nehru and I used a 'unitary taxation approach' to allocating their profits to countries.

In December the Tax Justice Network published a paper by Sol Picciotto explaining unitary taxation. Amid rising public concern at how multinational firms ride roughshod over international tax rules, the paper advocated a shift to a system unitary tax system because under this approach the global profits of a multinational are ‘apportioned out’ to countries according to the genuine economic substance of what it does in each place. Each country can then tax its share of global profits at its own rate.

Not everyone agrees, of course, so another paper, also written by Prof. Picciotto has answered ten criticisms of the approach.

What's important about all this? Well, it shows we don't have to put up with corporate tax abuse. There are alternatives. And the fact is, those alternatives would work. That's why we promote them.