Globalization Of Taxation

Since the invention of the internet it was just a matter of time before the integration of a globalized economy. Globalization means the expansion of the world's economy it's not just about one single country anymore. Globalization takes capitalism to a whole other level with their being competition for about every market which inevitably drives prices further down, and ships jobs to countries where businesses can get the same result for a fraction of a price. Globalization can be a good thing as long as it's done with some sort of regulation, but like capitalism it is becoming a cut throat world a world where only the strong survive, and strength is determined by who can offer the lowest tax rates.

Now that the world's economy has been integrated or globalized it brings with it a whole bunch of free trade agreements which do away with the nuisance of doing business outside your home country. North America has the North American Free Trade Agreement which opens the boarders of the United States, Mexico, and Canada to do business tariff or tax-free with each other. These free trade agreements are all over the world. The Euro zone which allows free trade with the countries that consist of the European Union which helps expand their economy, but tax money that could be generated from such transactions is nonexistent. Asia has the Asian Pacific economic cooperation which has those countries freely trading. It seems like every year there is another free trade agreement that pops up between neighboring countries. It really has set the standard in today's economy because if you're a country who has barriers or high tariffs to trade with then you're not going to have much of a chance to compete in today's global economy.

The catch 22 about globalization is that countries will lower their taxes to encourage foreign investment so they get that money pumped into their economy, but with the these lower taxes means less government which in turn means less regulation to keep an eye on these corporations from doing what they want. Adam Harmes a political science professor at the University of Western Ontario "sees a world already spiralling toward the bottom through deregulation and lower taxes, and views stronger global institutions as the means to protect individuals from this corporate arbitrage" If we don't have someone keeping an eye on these corporations who will do whatever it takes no matter how unethical their business practices are corporation's are concerned with one thing, and that is to make a profit.The globalization of the economy in the short run looks great on paper prices are down costs are down and corporations are expanding at a rapid pace., but the real victim of globalization are the lower class people of their nations. People who depend on government welfare which is funded by taxes is slowly dwindling away because paying taxes all of a sudden has become taboo. That it is not fair for everyone to pay their fair share to contribute to the greater good of the country. Globalization according to Harmes will eventually get out of control when the tax rates are so low that it will be impossible for government to operate efficiently, and these corporations will get away with everything and never be held responsible for their actions.

The globalization of the world's economy has an adverse affect on tax revenue for the United States or whatever country is being concerned. The idea that low taxes are good for business is absolutely true, but what it is not good for is majority of people in the world. The North American free Trade Agreement for example has sent countless number of manufacturing jobs to Mexico. This is putting people out of work and taking tax revenue out of the United States. Since all the corporations are outsourcing (which is their only chance to compete) it is leaving unemployment at almost ten percent which is the greatest since the great depression. This is a problem because the government provides these unemployed people with assistance that is provided through tax revenue. Bottom line is that globalization works only if it is done responsible where you do away with the concept of free trade, and tax responsible


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