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Three Essays on Tax Abuse and the Fulfillment of Economic and Social Rights Ute Reisinger Ute.Reisinger@Uconn.Edu University of Connecticut OpenCommons@UConn Master's Theses University of Connecticut Graduate School 12-12-2017 Three Essays on Tax Abuse and the Fulfillment of Economic and Social Rights Ute Reisinger [email protected] Recommended Citation Reisinger, Ute, "Three Essays on Tax Abuse and the Fulfillment of Economic and Social Rights" (2017). Master's Theses. 1157. https://opencommons.uconn.edu/gs_theses/1157 This work is brought to you for free and open access by the University of Connecticut Graduate School at OpenCommons@UConn. It has been accepted for inclusion in Master's Theses by an authorized administrator of OpenCommons@UConn. For more information, please contact [email protected]. Three Essays on Tax Abuse and the Fulfillment of Economic and Social Rights Ute Elisabeth Reisinger MA, European Inter-University Centre, 2011 A Thesis Submitted in Partial Fulfillment of the Requirements for the Degree of Master of Arts at the University of Connecticut 2017 Copyright by Ute Elisabeth Reisinger 2017 ii APPROVAL PAGE Master of Arts Thesis Three Essays on Tax Abuse and the Fulfillment of Economic and Social Rights Presented by Ute Elisabeth Reisinger, MA. Major Advisor ____________________________________________________________ Susan Randolph Associate Advisor ____________________________________________________________ Kathryn Libal Associate Advisor ____________________________________________________________ Thomas Hayes University of Connecticut 2017 iii ACKNOWLEDGEMENTS I would first like to thank my thesis advisor Associate Professor Susan Randolph of the Department of Economics at the University of Connecticut. Professor Randolph gave me the opportunity to work with her on the Social and Economic Rights Fulfillment Index and was always available I if had a question about my research or writing and steered me in the right the direction whenever she thought I needed it. I would also like to thank my associate advisors, Associate Professor Kathryn Libal and Assistant Professor Thomas Hayes. I am grateful to them for their valuable comments on this thesis and encouragement for future research. iv Table of Contents List of Acronyms ......................................................................................................................... viii List of Tables and Figures............................................................................................................... x Abstract .......................................................................................................................................... xi Introduction ..................................................................................................................................... 1 1. The Impact of Tax Abuse on the Realization of Economic and Social Rights ....................... 6 1.1 The Dilemma of Global Tax Abuse ................................................................................. 8 1.1.1 Tax Avoidance ........................................................................................................ 10 1.1.2 Tax Evasion ............................................................................................................ 11 1.1.3 Tax Havens, Secrecy Jurisdictions and Shell Corporations.................................... 13 1.1.4 Tax Expenditures .................................................................................................... 18 1.1.5 Understanding the Problem is Part of the Problem ................................................. 20 1.2 The Harmful Effects of Tax Abuse ................................................................................ 24 1.2.1 Poverty and Inequality ............................................................................................ 28 1.2.2 Fiscal Policy and Progressive Taxation .................................................................. 32 1.3 The Link to Human Rights ............................................................................................. 37 1.3.1 Creating an Enabling Environment ......................................................................... 37 1.3.2 Maximizing Available Resources ........................................................................... 39 1.3.3 Business and Human Rights ................................................................................... 43 1.3.4 Extraterritorial Obligations of Human Rights......................................................... 45 1.4 Concluding Remarks ...................................................................................................... 51 2 Tax Abuse and Human Rights in Mozambique .................................................................... 52 2.1 Overview of Mozambique’s Development Performance ............................................... 54 2.2 Domestic Human Rights Obligations ............................................................................. 58 2.2.1 Tax Base and Tax Collection .................................................................................. 59 2.2.2 Progressive Taxation and Non-Discrimination ....................................................... 61 v 2.2.3 Tax Avoidance and Evasion ................................................................................... 65 2.2.4 Accountability and Governance .............................................................................. 71 2.2.5 Fiscal Spending and Austerity Measures ................................................................ 75 2.3 Extraterritorial Obligations ............................................................................................ 77 2.3.1 Taxing Multinationals ............................................................................................. 77 2.3.2 Respecting and Protecting Mozambique’s Tax Revenues ...................................... 79 2.3.3 Tax Havens and Secrecy Jurisdictions .................................................................... 82 2.3.4 International Cooperation ....................................................................................... 83 2.4 Concluding Remarks ...................................................................................................... 87 3 The Impact of Tax Abuse on Economic and Social Rights: An Empirical Analysis ........... 89 3.1 Theory ............................................................................................................................ 90 3.2 Methodology and Hypotheses ........................................................................................ 92 3.3 Direct Impact .................................................................................................................. 93 3.3.1 Independent Variable .............................................................................................. 94 3.3.2 Dependent Variables of Concern ............................................................................ 95 3.3.3 Control Variables .................................................................................................... 98 3.4 First Level Indirect Impact ........................................................................................... 102 3.4.1 Independent Variables .......................................................................................... 102 3.4.2 Dependent Variables of Concern .......................................................................... 104 3.4.3 Control Variables .................................................................................................. 105 3.5 Second Level Indirect Impact ...................................................................................... 109 3.5.1 Independent Variables .......................................................................................... 109 3.5.2 Dependent Variables of Concern .......................................................................... 109 3.5.3 Control Variables .................................................................................................. 111 3.6 Statistical Findings and Discussion .............................................................................. 115 vi 3.6.1 Direct Impact ........................................................................................................ 116 3.6.2 First Level Indirect Impact.................................................................................... 124 3.6.3 Second Level Indirect Impact ............................................................................... 135 3.7 Concluding Remarks .................................................................................................... 145 4 Conclusion .......................................................................................................................... 150 Annex .......................................................................................................................................... 156 References ................................................................................................................................... 161 vii List of Acronyms ALP Arm’s Length Principle APF Achievement Possibilities Frontier ASEAN Association of Southeast Asian Nations BBC British Broadcasting Company BEPS Base Erosion and Profit Shifting CEDAW Convention on the Elimination of All Forms of Discrimination Against Women CERD International Convention on the Elimination of All Forms of Racial Discrimination CERD International Convention on the Elimination
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