GPE- Offshore and Tax

시험이 이번주 목요일 Modern Political Thought 하나, GPE 하나 있는데 쉬지 않고 연달아 있으니까. 매일 이것 저것 정리하니 정신이 없다. 그래도 다른 학과에 비하면 시험수는 적지만 에세이 형식에 생각해야할 것도 많고 어려워서 며칠동안 고통받는 중이다. 이번 시험을 대비해서 나는 총 4개의 카테고리를 골랐다.

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Mock Exam을 보니 문제가 이러하다. (내가 선택한 4개)

1. Should IPE be geared towards unveiling power inequalities or towards objectively analysing political-economic analysis?

IPE가 힘의 불평등을 밝히는데 주력해야하는가 아니면 정치-경제 분석을 객관적으로 연구하는데 힘써야 하는것인가 골라라. 전자는 분명 British School을 의미하는 거이고, 후자는 American School 을 의미하는 것임. 따라서, 이 문제에 대답하는 방법은 먼저 내가 생각하는IPE가 British School (BS)과 맞는지 American School (AS)과 맞는지 제시하고, 3개의 Topic Sentences를 통해  BS/AS 비교식으로 에세이를 써내려 가야겠다고 생각했다. 

2. Should development policies aim to eradicate inequalities? HELL YES. (Inequality와 Development의 관계를 묻는 문제)

Development 의 궁극적인 목적은 불평등을 없애는데 주력해야한다고 쓸 것이다. 그렇다면 우선, Inequality의 정의에 대해서 말해야겠고, development 의 정의에 대해서 말해야 한다. 그다음으로는 global economy에서 inequality가 왜 문제인지 말해야 하고, development 가 어떤식으로 이뤄줘야 하는지 주장해야 한다. 여기서, 기존의 Washington Consensus에서의 문제점을 분명히 설명하는게 포인트라 할 수 있다. Western-initiated institutions / 서구중심의 development 가 어떠한 부작용을 나타내는지도 쓰면 좋고....

3. Who are the winners and losers from free trade? (money와 trade편)

첫 문장부터 자유무역에서의 승자와 패자에 대해 명시해야한다. "자유무역과 시장개방은 경제의 효율성을 높이지만 동시에 산업별,계층별로 승자와 패자를 낳는다. " 일단 자유무역을 주장하는 사람들은 자유무역이 win-win game이라고 보는데, 저 문제부터 이미 자유무역은 winners  와  losers가 존재한다고 전제하기 때문에 승자는 자유무역에서 이익을 본 집단 (미국과 같은 선진국, 무역에서 비교우위에 있는 나라들, 전세계로 장벽 없이 진출한 다국적 기업들) 그리고 패자는 자유무역에서 해를 보거나 볼 가능성이 큰 집단 (개발도상국, 산업 중에서 농업 비율이 높은 국가들, 수출메리트가 없는 국가들) 

생글생글을 참조하니 도움이 많이 되더라. -_- 

http://sgsg.hankyung.com/apps.frm/news.view?nkey=10838&c1=01&c2=01

4. Does globalisation force states to implement low taxation regimes? 

globalisation과 tax의 상관관계를 묻는 내용인데. high tax- welfare state/ low tax- small government 개념으로 정리한 다음에 globalisation은 tax, tariffs 와 같은 barriers를 거두는 방향으로 가고 있기 때문에, 저 질문에 대한 답은 "Globalisation forces states to implement low taxation regimes". low taxation regimes 의 장점과 단점을 분석해야할 필요가 있다. David Held의 The Globalisation Debate를 꼭! 넣어서, globalisation과  sovereign state의 power relationships (hyper-globalism/ Transformationalism/ Sceptics) 중 어떤 stance를 취하는지 말해야 할듯...

4개 중에 2개를 고르는게 시험인데, 막상 가서 고른다면 1번과 2번을 고를 것이고 시험공부도 저 2개 위주로 할 생각이다. 

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<Offshore>

Outline을 보니 Offshore에 대해서 이렇게 명시, 

"we begin to push the boundaries somewhat by beginning to explore global finance in the shape of 'offshore'. Offshore is perhaps one of the central examples of the globalisation of finance, and is therefore a very fitting way to explore the surrounding themes and issues while remaining firmly grounded in empirical examples and analysis."

Questions to consider.

1. What is offshore finance? Offshore finance 가 도대체 무슨 의미인지..

2. Why did have offshore economies emerged? Offshore economies 왜 발생했음?

3. Who are the winners and losers from offshore finance? Offshore finance에서 누가 승자고 누가 패자인가.

Lecture Note 정리. (Dr. Liam Stanley의 렉쳐노트)

Offshore financial centres는 어디에 있나? - EVERYWHERE/ London에 많다. / 

UK/ Switzerland, Singapore/ Ireland/ Hong Kong/ Cayman Islands.... 

According to the most conservative estimate, offshore centres hosted $5 trillion in undeclared financial wealth in 2013, representing 8% of all financial wealth held by the world's households that year.

왜 생김? 

1. to avoid income tax

2. it offers very low corporation tax

기업들이 low income/corporation tax를 선호하는 것은 당연함. 

Finance란? 

“Finance” is a broad term that describes two related activities: the study of how money is managed and the actual process of acquiring needed funds.

파이넌스 (재원/자금/재무/금융)은 넓은 개념임, 1. 어떻게 돈이 관리되느냐. 2. 필요한 자금을 얻는 실질적 과정을 공부하는 것.

1.Global Credit System

세계 신용 제도

-it determines who gets to borrow money from another.

2.The IMS (International Monetary System)

세계 통화 시스템

-it governs how one national currency is exchanged for another. 

Why offshore?-Offshore finance is global finance. 왜 offshore? offshore finance=global finance

1. ’Far from a marginal or exotic backwater of the global economy, offshore in many way is the global economy’ (Maurer 2008:160)

2. Offshore finance sheds light on important and salient debates about how states respond globalisation.

The Globalisation debate (by Held et al., 1999)

1. Hyper-globalism: globalisation is so strong that it has transcended and rendered obsolete the traditional sovereign state - end of state sovereignty (세계화가 너무 강해서 주권국가의 역할을 쓸모없게 만든다? - 주권국가의 종말?)

2. Transformationalism: Compromised sovereignty and state capacity remains (어느정도 국가의 주권이 남아있다고 보는 관점)

-Comprised sovereignty and state capacity remains

3. Sceptics: Globalisation is weak- the sovereign state remain the principal actor in the international system. (아니다, 아직 세계화 미미함)

-State-centrism/ strong state capacity and sovereignty

Definitions! (1)

Ronen Palan: It doesn’t make sense to define offshore as some sort of unique form of market.

offshore가 시장에서 특정한 형태로서 정의되어지고 있는데 이는 맞지 않다 사실.

Offshore is instead a "designation of the status of the regulatory realms in which certain activities take place" (1998:631)

Offshore 는 대신에 규제 영역의 상태의 지정을 의미한다. 한국어가 더 어렵다. 하. 어쨌든, '지정'이라는 것이다. '형태'가 아니라.

There are four things that make something offshore (Palan 1998:632)

1. Some attempt to separate the “offshore” from the “onshore” (regulation, tax, whole different systems).

offshore와 onshore을 구별하려고 하는 시도.

2. The institutions in the market tend to be classified as nonresident.

시장에 있는 기관들이 비거주자로서 지정된다면- offshore 발생

3. Transactions have a significant nonresident component.

거래가 중대한 비거주요소를 갖고 있을때...

4. Transactions are largely restricted to foreign currencies (unregulated spaces).

거래가 외환에서 대부분 제한될때.

ex) Duty free shop

- physical separation? creating different rules around the particular space.

What exactly is offshore?

It starts with sovereign states.. who use their sovereignty or their right to write the law to create a regulatory or juridical space.

주권국가에서부터 시작한다.  규제와 법적 공간을 만들어내는 법안을 지정하는 주권과 권리를 사용하는 주권국가!

Within these intangible but real “shores”, the state regulation and taxation of certain activities are fully or partially withheld.

무형이나 실제로 존재하는 "shores"안에서 국가의 규제와 특정 행위에 대한 세금부과가 완전히 혹은 부분적으로 보류되는 경우.

This has resulted in the bifurcating (두갈래로 나누다) of the sovereign space into relative realms distinguished by degrees of regulations.

결국 offshore는 sovereign space가 두 갈래로 나뉘는것을 야기했는데 , 나뉘는 기준이 규제의 정도에 따라 다르다.

Offshore=regulative space (규제하는 공간)

Definitions (2)

Euromarkets

- nothing to do with Europe or the euro currency

- offshore markets that are free from domestic interest regulations and other capital controls.

Tax haven (조세피난지)

• a type of offshore space, in which reduced regulation and tax are used to attract foreign economic activity.

1.little or no income or corporation tax

2.strong bank secrecy laws

3.public presentation as a tax haven

Tax evasion/avoidance

Tax evasion (탈세)-illegal -when a person or firm intentionally escapes their tax liability. 불법

Tax avoidance (절세)- legal- When a person or firm intentionally modifies their situation to lower the amount of overall tax owed. 합법.

The rise of the Euromarkets 유로마켓이 등장하게된 배경은?

Context: Bretton Woods/ embedded liberalism, and the move towards globalisation.

Dates	International Monetary System	2 FROM 3 POSSIBLE CONDITIONS
1870s - mid 1930s	Gold (-exchange) standard	Fixed exchange rate Free capital mobility
1945- 1971	Gold-dollar exchange	Fixed exchange rate Domestic monetary policy autonomy
1971-	Floating Exchange rates	Free capital mobility Domestic monetary policy autonomy

The Euromarkets allowed private financial actors to buy, sell and lend US dollars in unregulated ‘offshore’ markets to get around national restrictions.

Susan Strange: Euromarket transactions ‘were untaxed, anonymous and profitable.’

+ the size of Eurocurrency market expanded

+ Within the country but outside the regulation

So, what's the point?

1.Undermined the Bretton Woods system

2.Euromarkets and offshore finance emerged by accident.

3.Today basically the entire wholesale global financial market is effectively an expansion of the Euromarket.

Tax Havens

“Double Irish with a Dutch Sandwich - A tax avoidance scheme in which firms use a combination of Irish and Dutch subsidiaries to lower their tax...”

Depending on the year, between a third and a half of large US corporations pay no tax on their profits.

But things are changing.

1. This delicious combination is no longer available.

2. US and FATCA

3. Triggered co-operation and lots of bilateral agreements

4. Non-dom stauts in the UK to be repealed (폐지)?

Summary

Returning to globalisation question

Palan: unregulated markets are an aspect of state regulation

Two big historical processes going on that sort of clash with one another:

1.Rise of state sovereignty

2.The development of a global capitalism

To what extent does offshore finance ‘represent’ globalisation?

Some questions to consider:

Who are the winners and losers from offshore finance?

Tax evasion is illegal, but should we consider tax avoidance as fundamentally unethical?

Why don't we do (even) more to crack down on it?

just what is offshore finance anyway?

How and why did offshore emerge?

What is the role of the state in the rise of offshore finance?

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그렇다면, Tax는?

1. Analyse the importance of taxation to contemporary Western States. 

세금이 현대 서구 국가에서 얼마나 중요한지 분석하셈.

2. Identify, unpack and evaluate key debates about the impact of globalisation upon nation-state (fiscal) autonomy.

세계화와 국가의 자치의 상관관계에 대해서 말하기! 

3. Explore the empirical evidence about globalisation and the politics of ideas.

세계화가 일어나고 있다는 실증적 증거!

Context 1: Why globalisation is important?

Bretton Woods / embedded liberalism, and the move towards globalisation.

The Euromarkets allowed private financial actors to buy, sell and lend US dollars in unregulated 'offshore' markets to get around national restrictions.

This led to liberalisation, with implications for national policy autonomy: gives investors a powerful 'exit' from governments that stray away from their preferences.

Especially when this includes tax and welfare. 

Bretton Woods 시스템이나 자유주의 그리고 세계화를 향한 움직임이 어떻게 국가의 자치에 영향을 줬느냐의 문제인데, 유로마켓의 등장은 기업들이 국가의 규제 (세금 장벽) 에서 벗어나서 자유롭게 사고 팔 수 있는 장이 되었지만 이는 곧 국가의 자치가 세계화의 영향에 크게 흔들리고 있다는 것을 보여주기도 한다. 왜냐하면 국가의 입장에서 세금을 걷는 행위는 국가를 유지하기 위해서 복지를 위해서 굉장히 중요하기 때문.

Context 2: Why tax is important?

"Governments need money. Modern governments need lots of money. How they get this money and whom they take it from are two of the most difficult issue faced in any modern political economy" (Steinmo, 1993, p.1)

정분은 당연히 돈이 필요함. 따라서 세금 중요함. 세금없잇 나라가 굴러갈 수 없음.

Howe does the state get money? TAX!

Progressive Tax (누진세): 'share of income paid in taxes rises with income' 소득액이 올라감에 따라 세율도 오르는 것.

Regressive Tax (역진세): 'share of income paid in taxes falls with income' 소득액이 올라감에 따라 세율이 떨어지는 것.

<Welfare>

The main reason why people are interest in taxation is because of welfare.

1. cash benefits. 2. healthcare 3. education 4. food, housing, etc.

This connected roles can be distinguished between: 

1) The 'Robin Hood' function of a welfare system, which involves the redistribution of wealth and income between social groups.

(소득 재분배 효과)

2) The 'piggy bank' function of a welfare system, which provides insurance and redistributes wealth and income over time.

(돼지저금통 효과. 후대를 위해서..)

The Globalisation Debate

It is perhaps useful to distinguish between the globalisation of politics and the politics of globalisation (Hay 2014)

정치의 세계화와 세계화의 정치와 구분할 필요가 있다?

Globalisation has a politics whether or not politics has become globalised. 

...the key question for the politics of globalisation is the impact upon the nation-state. 

또 나왔네, Held 의 3가지 구분.

Hyper-globalism: Globalisation is so strong that it has transcended and rendered obsolete the traditional sovereign state.

Transformationalism: Globalisation is so strong and constrains states, but states are able to adapt and pool their sovereignty to achieve national goals. (중간지점)

Sceptics: Globalisation is weak- the sovereign state remain the principal actor in the international system.

Hyper-globalist thesis and tax

International economic integration sparked a "race to the bottom" (하향식 모델)

-...with capital controls reduced and technological innovation accelerating, mobile capital can now put a lot of pressure-with the threat of exit- on governments to change a number of things: 

comprehensive welfare states-> residual ones. 

Highly regulated labour markets-> flexible ones.

Strict environmental regulations ->lax ones

High Union density ->low density

High taxation regimes-> low-taxation one

(This means the prospect of downward pressure on tax rates .... and eventually reduce the fiscal capacity of states, and lend to difficulties in funding welfare systems.)

Big question: is welfare compatible with global economic integration?

...grim democratic implications?

복지와 세계적 경제 통합이 양립 가능할까?

Critiquing the hyperglobalist thesis

1. The sceptics: Hirst and Thompson "In a nutshell, globalisation is not very global"

International economic integration is not "global ".. it is instead a process of 'triadization'...

1)Regionalisation, 2)Inter-regionalisation ....….the selective and uneven process of deepening economic integration between the ‘triad’ economies, i.e. North America, South-

2. The Revisionists: Varieties of Capitalism "in a nutshell, different types of state react differently"

There are varieties of capitalism that, due to institutional differences in the organisation of the state, respond to globalisation differently.

Liberal Market economics (e.g. USA and UK) + Co-ordinated market economies (e.g. Germany and Sweden) = Dual convergence

3. The Analyst: Mostly critique "In a nutshell, there is still room to move"

Investors care about two things: inflation, and budget deficits (...but this only goes for advanced capitalist democracies)

"Governments retain a significant amount of policy autonomy and political accountability. If, for domestic reasons, they prefer to retain traditional social democratic policies, for instance, they are quite able to do so" (Mosley 2003: 305).

Empirical Evidence (Hay, 2006)

Role of Ideas

Other contemporary issues: 

Resource curse thesis:

When a state's dependence on natural resources for revenue harms national development.

It leads to slower economic growth, unemployment and poor job creation, inequality, instability and even authoritarianism. 

1. Dutch Disease 2. The Brain Drain 3. Volatility 4. Rents

Should tax be collected on a global level?

1. A financial transactions tax?

2. A global wealth tax?

3. A global tax?