The paper "The Tax Justice Network in the UK and the USA" is a good example of macro and microeconomics case study. Countries experience loses to multinationals and individuals through increasingly aggressive use of tax avoidance schemes. Various press reports have continuously highlighted the low tax paid by well-known multinational companies. Tax avoidance and tax evasion are two different concepts that have been used interchangeably. Basically, tax evasion is illegal and punishable by law while tax avoidance is legal. Tax avoidance is the legitimate minimizing of tax by using methods approved by the Internal Revenue Service (IRS).
Most multinationals avoid paying taxes by taking legitimate deductions and sheltering income from taxes by setting up employee retirement plans which are legal under the state tax codes or IRS. Some of the methods of tax avoidance taking tax credits for spending money for a legitimate purpose such as taking a work opportunity tax credit or setting tax deferral plan such as Individual Retirement Arrangements (IRA) plans to delay taxes to a later date. However, tax evasion is an illegal avoidance to pay by individuals, trust or corporations. In most cases, tax evasion involves a deliberate misinterpretation of the true state of the company’ s affair to the tax authorities in an attempt to reduce the tax liability.
The misinterpretation includes dishonest tax reporting such as declaring less income or profits. Moreover, tax evasion includes the shifting of various company activities and profits to low-cost countries to avoid tax. Therefore, researchers and activities have come up with the Tax Justice Network that is concerned about tax avoidance, tax evasions, tax havens and tax competitions.
The TJN has the purpose of identifying tax havens and addressing issues concerned with tax avoidance and evasion. This essay will illustrate the Tax Justice Network UK and Tax Justice Network USA; ad identifies the organization’ s goals, guidelines, and actions. Justice Network-UK The Tax Justice Network (TJN) is an advocacy group that consists of a coalition of researchers and activist that have a shared concern on tax avoidance, tax competition, and tax havens. From the 2009 reports, the Tax Justice Network International Secretariat Limited is a UK company that is controlled by the Tax Justice Network Association.
Launched in 2003, the core mission of the TJN UK is to ‘ change the weather’ on a wide range of issues. The TJN is dedicated to conducting high-level research, analysis and advocacy in international tax and in the international aspects of financial regulation. The role of the TJN UK is to map, analyze and explain the role of tax and the negative impacts of tax evasion, tax avoidance, tax havens, and tax competition. The core goals of the TJN-UK are to create understanding and debate and to promote reform, especially in developing countries.
The berserker tactics were the major tactic used by the TJN after its launch. Tax Justice Network-USA Tax Justice Network USA has the role of promoting tax justice and tax cooperation, including policies that address tax avoidance and tax evasion. Moreover, the TJN USA develops and implements policies that address financial transparency in the US government, corporations, and financial institutions. The TJN USA operates as a not-for-profit and non-partisan organization that brings together organizations, social movements, and individuals working towards similar goals. From the report released by the organization, tax loopholes, subsidies and deductions make 39% a quaint notion.
According to TJN USA, the rate is not an issue. According to TJN USA, the US has a US approach to taxing MNCs that enables the MNCs to shift their profits around the world to evade the responsibilities in the US.