The Oxford Centre for the Non-Taxation of Business is at it again on corppration tax

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At about the time I first began writing about Jersey the Oxford Centre for Business Taxation was created. Long known in tax justice circles as the Oxford Centre for the Non-Taxation of business because of many of the positions it takes and the sources of some of its funding, it is, like tax justice campaigners, having a good day in the press today. The FT carries an article by Vanessa Houlder in which she says:

Many experts are asking whether corporation tax can survive in its current form. At an Oxford conference this summer [hosted by the Oxford Centre for Business Taxation] to mark the levy’s 50th anniversary, Peter Harris, a professor of tax law at the University of Cambridge, said the tax could not be salvaged. He said: “I think we are well past the point of no return. It is just going to get worse.”

and

Some experts thinks tax competition is unstoppable. Michael Devereux, director of the Oxford university Centre for Business Taxation, has long predicted a race to the bottom in corporate tax rates. He is one of a number of prominent economists who think the corporate tax should be reformed with a new system, similar to VAT, that taxes profits — or “value added” with relief for labour costs — at the destination of sales.

That idea looks like a VAT, would behave like a VAT and like a VAT would be deeply regressive as it would effectively be a tax on sales. The result would be the complete shift of this tax off capital and onto consumers, or ordinary people in other words. But what the heck? What does business care about that?

Alex Cobham for the Tax Justice Network did get a word in edgeways:

Yet another approach is promoted by campaign groups such as Tax Justice Network. They want to preserve the corporate tax but make fundamental changes to way that companies are taxed internationally. The approach they favour — treating multinationals as single entities — is also being pushed by Brussels, which has long favoured a pan-European tax system.

Alex Cobham, director of research at Tax Justice Network, is sceptical about proposals to replace corporation tax, which he says would be hard to collect or unfairly discriminate in favour of countries with big markets. He is also convinced that the best efforts of the BEPS initiative to patch up the corporate tax will be seen to have failed at some point over the next five years.

Governments will do their best to shore up the system. But time is running out for the corporate tax in its current form, he says. “Defenders of the current system will look back at BEPS as the last hurrah.”

I agree that in its existing form corporation tax is dead: it does not work for small business and it is failing to collect tax from large ones.

The one thing we can say with certainty is anything that looks like a VAT is the wrong way forward. I can say with much more confidence that unitary taxation is the required direction of travel.

And for small business? I'll come back to that.

But whichever way you look Oxford has not, I think, got the answers because as yet they've not put an option on the table that is close to being politically acceptable to electorates. And that's a big issue in tax reform.

And for more on this, read this and remember that in Montreal I won the debate on whether or not corporation tax should survive with 87% of the vote. The Oxford line does not travel that well.