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This chapter examines the ethics and business diplomacy of legal tax avoidance by multinational enterprises (MNEs).

The methodology assembles the relevant literature and examines alternative interpretations of corporate tax strategy. Key topics include business ethics and responsibility, business sustainability, economic patriotism and corporate inversions, tax havens, and possible solutions.

The debate concerns whether legal tax avoidance is unethical and/or poor business diplomacy. There are three possible strategies for MNEs. One strategy is intentional tax avoidance. Another strategy is business–government negotiation concerning tax liability. Another strategy is business diplomacy aimed at maximizing the social legitimacy of the firm across multiple national tax jurisdictions.

The chapter assesses four possible solutions for corporate tax avoidance. One solution is voluntary tax payments beyond legal obligations whether out of a sense of ethics or a strategy of business diplomacy. A second solution is international tax cooperation and tax harmonization in ways that minimize opportunities for tax avoidance. A third solution is increased stakeholder pressure emphasizing business diplomacy and tax cooperation and harmonization. The fourth solution is negotiated tax liabilities between each business and each jurisdiction.

The chapter provides an original systematic survey of the key aspects of corporate international tax avoidance in an approach in which business ethics and business diplomacy are better integrated. The value of the chapter is that it provides information and assembles relevant literature concerning corporate international tax avoidance, and addresses possible solutions for this problem.

This study examines the impact of expanded geographical disclosures on nonprofessional investor judgments. Public country-by-country reporting (CBCR) is a way to increase corporate transparency, enhancing tax fairness and accountability (European Commission, 2016). Public disclosure would make large multinational companies share information about profits, taxes paid, and number of employees on a per-country basis. However, it is unclear whether nonprofessional investors would even use CBCR and how they would interpret the information. Adding to the policy debate on whether publicly available country-by-country information will be properly used, this study employs an experimental design to investigate the effect of disclosure availability and content on nonprofessional investor judgments. We find that participants receiving an expanded disclosure are able to more accurately assess the state of the social contract between the organization and society, imposing sanctions if necessary. Exploring CBCR provides timely evidence to regulators, standard setters, and tax fairness campaigners on the impact of expanded geographical disclosures as a means of increasing transparency and improving competitiveness.

This chapter presents the results of the comprehensive literature survey and supportive empirical assessment of the potential impacts of the Financial Transactions Tax (FTT) recently adopted by the European Commission in response to the significant financial sector misallocations arising from the Global Financial Crisis.

A survey of 50 academic articles relating to both Financial Transaction Taxes and Tobin Taxes shows that although a reduction in liquidity can be expected from such taxes, the impacts this will have on volatility and efficiency in a market are less obvious. A regression model quantifying what the possible effect of an introduction of a 0.1% tax on financial transactions would be on trading volumes and levels of volatility in the European equity market confirms the survey results in broader terms.

The results suggest that, in the current economic climate, such a tax would likely increase volatility levels but may not have much effect on trading volumes.

As a result the proposed tax can be viewed as an exercise in revenue generation but not as a macro-prudential tool for addressing potential future shocks and imbalances within the European financial system. In other words, contrary to political and media statements, the FTT does not appear to be an effective tool for addressing past, present and future risks associated with systemic malfunctioning in the banking and financial systems.

The study presents an extensive and systematic survey of academic literature on FTT and links this survey to empirical model estimation. This twin approach to the analysis is novel to the academic and policy literature on Financial Transactions Tax. Whilst popular belief is that introduction of FTT will aid the objective of achieving greater financial and economic sustainability across the European financial systems, evidence presented in this chapter suggests that such a conclusion is at the very best naive.

The paper adopts an organizational perspective to explore the conditions of possibility of the recent re-emergence of overt class-based discourse on one hand, epitomized by the ‘We are the 99%’ movement, and the rise on the other hand of a populist, nativist and sometimes overtly fascist right. It is argued that these phenomena, reflecting the increasingly crisis-prone character of global capitalism, the growing gap between rich and poor and a generalized sense of insecurity, are rooted in the dismantling of socially embedded organizations through processes often described as ‘financialization’, driven by the taken-for-granted dominance of neoliberal ideology. The paper explores the rise to dominance of the neoliberal ‘thought style’ and its inherent logic in underpinning the dismantling and restructuring of capitalist organization. Its focus is upon transnational value chain capitalism which has rebalanced power relations in favour of a small elite that is able to operate and realize wealth in ways that defy and often succeed in escaping the regulation of nation states.

This chapter presents a critical analysis of the wealth current practices of multinational firms as wealth predators; and relevant references from the theory of multinational corporations and globalization from a Marxist perspective. The Marxist approach has also contributed to a theory of the self-expansion of capital (internationalization of the circuits of capital) on a global scale, within an analysis of the differentiation and of inequality.

Analyzing how the post-Soviet transition interacts with the crisis of market finance exhibits a new “greed-based economic system” in the making. Asset grabbing is at its core and hinders capital accumulation. All the various privatization schemes have triggered off asset grabbing, asset stripping, and asset tunneling. A global contagion of such behavior has spread the power and cohesion of managers/shareholders (oligarchs) worldwide. Financial asset grabbing is less straightforward, though much widespread, and operates in financial markets through new financial products, securitization, firms buying their own shares, hedge funds, stock price manipulation, short selling, and the distribution of stock options.Shadow banking, and more generally a global informal economy, results from grabbing strategies in financial markets that breach the formal rules of capitalism. In alleviating and circumventing the rules, the oligarchy paves the way for economic malpractices and crime, calling capitalist laws into question.In such context, systemic greed underlies unconstrained maximization of relative wealth, for which asset grabbing is a rational means, in a winner-take-all economy. At the present stage of our research, a greed-based economy cannot yet be theoretically defined as a transition either to a new phase of capitalism or to another different system.

This chapter outlines and critiques Japan’s Furusato Nozei tax program from an economic anthropological perspective. This chapter first introduces the socio-political organization of taxes together with the social-scientific paradigms that have been brought to analyze taxation within anthropological thinking. The chapter then outlines Japan’s tax history and the Furusato Nozei, or Hometown Tax program, before critiquing the program on the basis of these social science and anthropological. This critique confirms the validity of evaluating this Japanese tax program in its orientation and operation from an anthropologic viewpoint, while also calling into question the validity of such an approach to taxation from a broader societal view, thereby contributing to a new area of research within the Anthropology of Taxation.