Impact of Globalization

Globalization has allowed corporations to reap the benefits of higher profits and shareholder wealth by operating in multiple countries at the same time. Naturally that comes with more taxes, the thing that we all despise but it is essential for the governments to function. Unsurprisingly, corporations have their own methods to lower, hide, and/or avoid paying taxes. This is mostly done through tax avoidance, a legal way to gain the most profit and pay the least amount of taxes. Corporations pay top dollar for accountants and lawyers to find loop holes, get creative with law, and exploit the tax avoidance methods that they love so much. Globalization has amplified and increased the amount of ways that multinational corporations practice tax avoidance primarily through the use of tax havens and transfer pricing. A tax haven is simply a country where certain taxes are at lower rates or nonexistent than other countries. The taxes themselves as well as their secretive nature is what attracts corporations to operate in those countries. Tax havens are part of off shoring where companies move part of their operations to the tax havens while continuing to profit in the "home" country. This process alone costs governments at least $255 billion per year in lost taxes according to Tax Justice Network. The Cayman Islands always come to mind whenever tax havens are discussed as well as other locales such as Switzerland, Bermuda, and even Delaware. SrSXSdts
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