How tax ‘competition’ affects women

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Credit: Center for Economic and Social Rights

From the Association for Women’s Rights in Development:

“The current “race to the bottom” in which tax competition among developing countries takes place to attract corporate and foreign direct investment is having a negative impact on government budgets needed to finance the advancement of women’s rights.

We prefer the more economically literate term ‘tax wars‘ instead of tax ‘competition’, but no matter: there is a clear and powerful argument here.  The key point is not that budget cuts affect everyone, including women, but that women are disproportionately affected by tax policies that are substantially the fruit of tax wars. It is not just about how much revenue is raised, either: it is about how revenue is raised. As it notes:

“Policy makers are yet to make the clear connection, even with increasing concerns that tax systems are biased against women, and, that contemporary tax reforms may increase the incidence of taxation on the poorest women while failing to generate enough revenue to fund the programmes needed to improve these women’s lives.”

The article continues, with more details:

“Decrease in government revenues often lead to cuts in social expenditure in key areas such as health, education, public jobs, care work, with disproportionate impact on women who often shoulder a greater unpaid care burden.
. . .

Fiscal policies are not gender neutral. In fact, tax systems hinge on certain concepts and assumptions that are themselves gendered (e.g. ‘breadwinner,’ ‘household,). These assumptions tend to put women at a disadvantage reinforcing stereotypes about women’s income being secondary to that of the male breadwinner, and does not recognize nor help to distribute unpaid care work.

The full article contains more — and for a still fuller flavour, it is also worth reading this new article by Prof. Susan Himmelweit focusing on the UK, which outlines clearly the several ways in which women can be affected by tax policies — and by implication, tax wars. As a taster:

“Women are more affected by cuts in public services than men are. This is partly because of their caring role within the family; partly because other family members are less likely to be around to look after women when they are old; and partly because women are likely to be poorer and thus more dependent on public services.

When public services are cut, women suffer particularly in three ways: they lose the services themselves, they will be ones who in practice make up for the lost services (possibly giving up employment to do so,) and they are more likely to lose their jobs, as the majority of public sector workers providing front line services are women.”

There is a serious case to answer here, and this clearly has implications far beyond the UK.

See also: the Tax Justice Network’s Gender page containing a range of resources on tax and gender.

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