Katharina Pistor | Princeton University Press | May 14, 2021

With the tax season in full swing, it is worth reflecting on the purposes that taxes serve in society. One is state revenue; ensuring the acceptance of state issued currency in which taxes must be paid is another; and addressing inequality the third. My focus here is on the latter.

Using taxes to redistribute wealth has many followers in academic and policy circles. Thomas Piketty, Emanuel Saez and Gabriel Zucman have been the most outspoken academics to call for wealth taxes, global corporate income, and more progressive domestic income taxes, among others.

Their advocacy is finding increasingly receptive ears even in the United States, the country that has spearheaded the race to the bottom in global tax competition at least since the Reagan administration. Just a few years ago, the US further lowered corporate income taxes to 21 percent and blocked efforts by the Organization for Economic Cooperation and Development (OECD) for a new international tax framework. Meanwhile, change seems to be in the air. The new Biden administration is proposing a partial reversal of the 2017 tax reforms (increasing it to 28 percent) and is pushing for a global minimum tax of 21 percent.

Originally published by the Princeton University Press. Read the full article here