Purpose The purpose of this study is to examine the efficacy of various policy options for curbing the accumulation of illegal wealth and suggest ways to close the increasing wealth inequality gap. Design/methodology/approach The paper begins with a historical/literary analysis of the place of wealth in American Society and the ambivalent cultural attitudes toward wealth. Different policy approaches that seek to limit wealth inequality and the illegal accumulation of wealth are then examined. Finally, the current policy climate in the USA is reviewed to determine the likelihood of meaningful reform. Findings In Europe, the BASEL accords show promise for curbing the illegal accumulation of wealth by politically exposed persons. In the USA, tax reform efforts can close the wealth gap, but the current political landscape makes meaningful reform challenging particularly given the increasing use of “dark” money to influence elections. Research limitations/implications Because financial reform is a moving target in both Europe and the USA, subject to the ebb and flow of political forces, it is difficult to predict what major reforms will be possible. Practical implications Without meaningful reform, an increase in populist movements can be expected (e.g. Brexit and Trump) with an overall, long-term negative impact on democratic capitalism. Social implications The wealth gap and the sense that the system is rigged against the common people will result in increasing political turmoil. Originality/value Combining literary/historical analysis with the analysis of current policy interventions provides a set of tools not usually used in the examination of financial crimes.
In late 1999, Congress enacted financial modernisation legislation that dramatically deregulated the financial services industry and expanded the powers of financial institutions in the USA. In keeping with this deregulation and expanded powers, the regulatory landscape and enforcement mechanisms also changed. While many applaud this legislation, others point to previous US experience where financial deregulation overwhelmed federal regulators and resulted in massive failures of financial institutions and, consequently, in huge federal bailouts. The authors examine here the prospect of supplementing regulation with certain forms of private intervention. Specifically, they address the question: is there a role for whistleblowing and bounty hunting as means of supplementing existing regulation in the financial services industry?
Under the guise of compelling multinational enterprises (MNEs) to pay their fair share of income taxes, the OECD and other multinational agencies have introduced proposals to prevent MNEs from eroding the income tax base of developed economies by continuing to shift income artificially to low or zero tax jurisdictions. Some of the proposals have garnered substantial multinational support, including recent support from the new U.S. presidential administration for a global minimum tax. This Article reviews many of those international proposals. The proposals tend to concentrate the incremental tax revenue from the prevention of base erosion into the treasuries of the developed economies although the minimum tax proposal known as GloBE encourages low tax countries to adopt the minimum rate. The likelihood that and zero tax countries will transition successfully to imposing the minimum tax seems uncertain. Developed economies lack a compelling moral claim to incremental revenue so this Article argues that collecting a fair tax from MNEs and other taxpayers should be a goal that is independent of claims on that revenue. The Article maintains that to prevent tax base erosion, the income tax base and administration must be uniform across national borders and the Article recommends applying uniform rules administered by international taxing agency. The Article explores the convergence of tax rules under such an international taxing agency. Distribution of tax revenue by the international agency should follow contextualized need. In addressing the conundrum of absolute poverty in the undeveloped and developing world vis á vis relative poverty in the developed world, the Article proposes that the taxing agency should distribute all incremental revenue from the uniform tax where the need is greatest to ameliorate absolute poverty and improve living standards without regard to income source. The location of income production, destination of the produced goods and services generating the income, and residence of the income producers should not determine the tax revenue distribution. Rather, the use of contextualized need for distribution determination will enable developed economies to receive sufficient revenue to maintain their existing infrastructures and governmental services. Developed economies should forego new revenue, for which they have not budgeted, in favor of improving worldwide living conditions for all. The proposals for uniform, worldwide taxation and revenue sharing based on contextualized need are admittedly aspirational and utopian but designed to encourage debate on sharing of resources in our increasingly globalized world.
The United States uses a global model as the basis for its federal income tax system. 1 Characteristic of global systems is the Internal Revenue Code's definition of gross income. 2 The definition includes "all income from whatever source derived" and combines income from all sources under that single rubric of gross income. 3 Taxable income 4 upon which the Code imposes the income tax 5 also appears to combine deductions without regard to their source although the Code distinguishes business deductions 6 from all other deductions. 7
This United States report responds to a questionnaire that the general reporter for the project prepared. At the time the United States reporter prepared the report for the Congress, the United States Congress had not acted upon legislative proposals concerning registration of investment advisers to private funds and derivatives. On July 21, 2010, the President of the United States signed the Dodd-Frank Wall Street Reform and Consumer Protection Act 2 into law. This revised report includes reference to that Act and supersedes the report appearing on the website for the IACL Congress. The general reporter's questionnaire is in an appendix to the United States report. For easy reference, short forms of some recurrent terms in the United States report appear in the following glossary. Glossary of Terms in this Report. "BHC" means Bank Holding Company Act. "CEA" means the Commodities Exchange Act. "CFIUS" means Committee on Foreign Investment in the United States. "CFTC" means the Commodities Futures Trading Commission, the regulatory agency for commodities, swaps, and derivatives, other than security-based swaps and derivatives.
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