La CSJ declara que no son inconsticionales artículos de Código de la Familia
El Pleno de la Corte Suprema de Justicia declara que no son inconstitucionales la frase “entre un hombre y una mujer”, contenida en el artículo 26 del Código de la Familia de la República de Panamá, ni la expresión “las personas de ese mismo sexo”, incluida en el precepto 34, numeral 1, también del Código de la Familia de la República de Panamá, en un fallo del 16 de febrero de 2023.
La Corte Suprema de Justicia también declara que no es inconstitucional el artículo 35 de la Ley n.° 7 de octubre de 2015, que subroga la Ley n.° 7 de 8 de mayo de 2014, que adopta el Código de Derecho Internacional Privado de la República de Panamá, cuyo texto es el que sigue: “Se prohíbe el matrimonio entre individuos del mismo sexo”.
Bajo la ponencia de la magistrada María Eugenia López Arias, el Pleno concluyó que “las normas que disponen que el matrimonio debe concertarse voluntariamente entre un hombre y una mujer, legalmente capaces para unirse, y hacer, y compartir una vida en común, y las que de manera concomitante prohíben que contraigan matrimonio entre sí personas del mismo sexo (artículo 34, numeral 1 del Código de la Familia y 35 del Código de Derecho Internacional Privado), están objetiva y razonablemente justificadas en el interés general de dar prevalencia a aquellas uniones con el potencial de instaurar familias, dar continuidad a la especie humana y, por ende, a la sociedad”.
En el fallo se indica que hay una realidad, y es que, hasta ahora, el derecho al matrimonio igualitario no pasa de ser una aspiración que, aunque legítima para los grupos implicados, no tiene categoría de derecho humano y tampoco de derecho fundamental, siendo que carece de un reconocimiento convencional y constitucional.
Agrega que, algo que debe quedar claro, es que la Corte Suprema de Justicia, como guardiana e intérprete de la Constitución Nacional, no tiene facultad para decretar o proclamar derechos fundamentales que no estén positivizados e incidir en la eficacia y vigencia del contenido normativo del texto constitucional, por más cambios que se sucedan en la realidad, aun cuando estos tengan la entidad suficiente para producir una mutación constitucional.
Este fallo contó con seis votos a favor de los magistrados Carlos Alberto Vásquez Reyes, Cecilio Cedalise Riquelme, María Cristina Chen Stanziola, Miriam Cheng Rosas, Maribel Cornejo Batista y Ariadne Maribel García Angulo; uno razonado del magistrado Olmedo Arrocha Osorio, y el salvamento de voto de la magistrada Angela Russo de Cedeño.
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“The Wreck of the Old 97” is a classic bluegrass song recounting a spectacular train crash in 1903, caused by the company’s demand that the engineer speed down a dangerous track to deliver cargo on time.
Fully 120 years later we have the “Wreck of the Norfolk Southern” — a devastating crash caused by the company’s demand that it be allowed to run an ill-equipped, understaffed, largely unregulated, 1.7 mile train carrying flammable, cancer-causing toxins through communities, putting profit over people and public safety.
This rolling bomb of a train was hardly unique, for the handful of multibillion-dollar railroad giants that control the industry also control lawmakers and regulators who are supposed to protect the public from profiteers.
A measure of their arrogance came just two years ago, when an Ohio legislative committee dared to consider a modest proposal for just a bit more rail safety. Norfolk Southern executives squawked like Chicken Little, asserting a plutocratic doctrine of corporate supremacy on such decisions. They even imperiously proclaimed that state lawmakers have no right to interfere in safety matters.
Ohio’s Chamber of Commerce dutifully echoed Norfolk’s concern for profit over people, testifying that “Ohio’s business climate would be negatively impacted” by the bill. Never mind that Ohio’s public safety climate can literally be “negatively impacted” by train wrecks!
Plunging deeper down the autocratic rabbit hole, the Chamber insisted that corporate control over workers is sacrosanct. It postulated that a crew-safety provision in the Ohio bill was illegal because it “would interfere with the employment relationship between employers and their employees.”
Yes, that’s a corporate claim that executives have an inalienable right to endanger workers.
Sure enough, bowing to the corporate powers, Ohio lawmakers rejected the 2021 safety bill. And that is why, 120 years after the wreck of the old 97, train catastrophes keep happening.
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The US diplomatic compound at the former Fort Clayton in Panama City. US State Department graphic.
US Social Security services in Panama (March 20-24, 2023)
The US Embassy in Panama is pleased to announce that representatives from the Regional Federal Benefits Office will visit Boquete and Panama City to offer services for beneficiaries or individuals with questions about U.S. Social Security benefits.
Where: Biblioteca de Boquete, Ave. Belisario Porras, Bajo Boquete When: March 20th from 9:00am – 4:30pm and March 21st from 9:00am – 12:00pm
Where: US Consular Section, US Embassy Panama City, Panama When: March 22nd – March 23rd from 8 am to 3 pm and March 24th from 8am to 11:30am
Appointments:Consultations are by appointment or walk-in basis.
You may schedule an appointment by contacting the FBU Costa Rica at +506-2519-2228 Monday through Thursday from 9:00 AM to 12:00 PM or by sending an email to FBU.CostaRica@ssa.gov. Please include in the Subject line “APPOINTMENT SSA – PANAMA” along with your requested date/time and location
What to bring for social security services: (please bring the originals and legible copies of all documents to be submitted)
Applying for Social Security Benefits: Bring originals and one copy of the following for all applicants: Birth Certificate, passport. If applying for auxiliary benefits or survivor’s benefits, please also bring marriage certificate and/or death certificate.
Social Security Number Card Application: Bring a copy of your valid U.S. passport, Certificate of Birth Abroad or original birth certificate if registered after age-5 and completed form SS-5FS.
Foreign Enforcement Questionnaire (FEQ): Colloquially known as “proof of life” forms, these were mailed to individuals that have a mailing address in Panama registered with Social Security if the last two numbers of the Social Security under which you receive benefits are 00 through 49.
We will be unable to accept forms for those whose last two digits are 50 through 99 as you will receive these in the mail around June/July 2023.
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Canadian Friends of Peace Now, endorsed by Tikkun, the Network of Spiritual Progressives and Beyt Tikkun
Canadian Friends of Peace Now decries and condemns Sunday’s vicious rampage by a large crowd of settlers on the Palestinian community of Hawara, West Bank, which saw one Palestinian killed, some 100 injured and much property damage inflicted.
We also condemn and decry the brutal attack that was used as the excuse for this violence: the murder by a lone Palestinian terrorist of two young brothers from the settlement of Har Bracha, gunned down while driving through Hawara.
Calming measures are sorely needed to stem the cycle of violence that is already spiraling out of control and threatens to become a full-scale conflagration. Even more imperative are initiatives that address the root causes of the Israeli-Palestinian conflict. Sadly, the trend is in the opposite direction.
Settler attacks on Palestinian communities in the West Bank are nothing new, but the rampage in Hawara was particularly savage. Peace Now says: “Let’s call it what it is: a pogrom.”
Ha’aretz reports that some 400 settlers entered Hawara on Sunday, throwing stones and torching houses, cars and trees in a frenzy of revenge that lasted hours. The settlers had publicized their intentions on social media in advance, and this was known to Israeli security forces. But they failed to prevent the settler riot or to adequately protect the Palestinian residents once the riot was underway.
Certain Israeli cabinet ministers have issued feeble warnings that citizens should not “take the law into their own hands,” while inciting exactly that kind of behaviour.
On Sunday, Itamar Ben Gvir, Israel’s National Security Minister, told a group of settlers that “our enemies need to hear a message of…crushing them one by one.” After the Hawara debacle, Bezalel Smotrich, a finance minister who also holds a position in the defense ministry, appealed to settlers to allow Israeli security forces to “plan the appropriate response and let the ministry win” – hardly a rebuke of settler vigilantism. Before that Smotrich had “liked” a tweet by the deputy head of the Samaria village council which said: “the village of Hawara should be wiped out today.”
The matrix of the rising tensions in the West Bank is an Israeli government agenda of continuing military occupation, accelerated settlement expansion and thwarting any prospect of a two-state solution.
Says Peace Now: “This was the peak event of a long process that has been going on for years, in which settlers spare no means to implement their dangerous vision. Years of settler violence, land grabs, illegal establishment of outposts, and massive land seizure through settlements had lit a red flag in all of us that such an event would occur. Pogroms like these will happen again because this is the policy that the Israeli government is heading towards.”
We call on all parties, including international players, to take steps that can prevent further escalation of violence while creating a political peace-building horizon.
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This administration has begun to arrange the election laws and others so as to prolong its power after July 1, 2024. Miguel Antonio Bernal, archive photo by Eric Jackson.
Another fraud is underway
by Miguel Antonio Bernal V.
In the kidnapped democracy where rampant authoritarianism hides, the times we live in are so difficult for freedoms that we have to go out and explain the obvious.
The constitutional norms, the laws, the rules of the game, are daily violated by the monopolists of the public institutions. It should not surprise us then that, within the constitutional farce to which we are subjected, we are also led by the hand to electoral fraud.
To avoid confusion, let us remember with the Royal Academy of the Spanish Language that fraude is “the action contrary to truth and rectitude, which harms the person against whom it is committed. It is the act intended to circumvent a legal provision to the detriment of the state or third parties.”
Thus, we see how the administration headed by Laurentino Cortizo Cohen and his PRD party, in addition to arrogantly assuming the role of permanent violators of the constitution and of institutionality, have begun to alter electoral and other legislation for a fraud that would allow them to remain in power beyond June 30, 2024.
* Let us remember that, contrary to what one might think, fraud is not a single act. Fraud, in Panama, is in the system, yes, but also in the complicity with which out-of-office political parties act. They do not question the system because they “hope” to be able to benefit in one way or another from it.
* Thus we will see how the “official candidate, like many ruling party candidates, will receive direct or indirect official support, given the complicit silence of the Electoral Prosecutor’s Office, the Electoral Tribunal and the very leaders of the political parties who call themselves “non-government.” The President of the Republic has personally staged and will stage official acts to disqualify, slander or disrespect his political adversaries. For this contrived operation he has all the paraphernalia of the state apparatus.
* Another fraud is underway. So far everything indicates that they will reach their goal, unless the people manage to react. Otherwise, the first thrust they prepare will serve as a preamble to the slaughterhouse of fraud.
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About six months ago, Americans’ belief in God hit an all-time low.
According to a 2022 Gallup survey, the percentage of people who believe in God has dropped from 98% in the 1950s to 81% today; among Americans under 30, it is down to an unprecedented 68%.
Up close, the trend looks even more dramatic. Only about half of Americans believe in “God as described in the Bible,” while about a quarter believe in a “higher power or spiritual force,” according to a Pew poll. Just one-third of Generation Z say they believe in God without a doubt.
Congregational membership, too, is at an all-time low. In 2021 Gallup found that, for the first time ever, fewer than half of Americans – 47% – were members of a church, synagogue or mosque.
Yet another crucial measure of institutional religion in the U.S., the percentage of people identifying as religious, is also at a low: About 1 in 5 adults now say they have no religious affiliation, up from 1 in 50 in 1960.
In short, when it comes to three key realms of religious life – belief, behavior and belonging – all are lower than they have ever been in American history.
What’s going on? In my view, it’s clear: secularization.
However, despite these seemingly unambiguous numbers, debate about whether secularization really is happening has persisted. Indeed, for several decades now, many academics have continued to doubt its trajectory, especially in the United States.
‘The sacred shall disappear’
Secularization is the process whereby religiosity weakens or fades in society. Peter Berger, a sociologist of religion, defined it as the process that removes institutionalized religion’s domination over a culture, and a situation where more and more people make sense of their lives without traditional religious interpretations.
As Berger noted, one key aspect of secularization is societal: Organized religion loses its overarching public power. Welfare of the poor and sick, for example, is no longer overseen by religious orders, but is largely the responsibility of state bureaucracies.
But secularization is also about families and individuals: Fewer people believe in supernatural claims, attend worship services or follow religious teachings. For instance, more and more Americans are choosing to get married in secular settings, and record low numbers are wanting to have religious funerals.
Secularization in industrializing societies had been anticipated by many European thinkers in the 19th century, including the likes of Emile Durkheim and Max Weber, two of the founders of sociology. Weber spoke of the “disenchantment” of the world: the idea that increasing scientific knowledge would replace supernatural explanations.
For decades afterward, social scientists who study religion took secularization in industrialized societies more or less for granted. Some assumed that religion’s disappearance from many societies was all but certain – such as C. Wright Mills, who proclaimed in 1959 that “the sacred shall disappear altogether except, possibly, in the private realm.”
Not so fast
Not everyone was so sure. In the decades after Mills’ dire prognostication, many sociologists began to voice skepticism about secularization’s inevitability. As they observed developments like the rise of Pentecostalism throughout much of Latin America and the momentum of the religious right in the U.S., debate took off about the extent of secularization, and even whether it was happening at all.
Other critics pointed out that sociologists of secularization tended to focus on wealthy, Western countries with Christian heritages, and that their theories did not always translate well to other settings. Even a question like “Are you religious?” can mean something different, especially in non-monotheistic religions or religions where “belief” is not as central as it is in Christianity.
The most notable critic of secularization was sociologist Rodney Stark, who, in the 1980s, insisted that secularization theory was a sham. Stark was so sure that religion was as strong as ever that he wrote the very idea of secularization ought to be carried off to “the graveyard of failed theories.”
Secularization cannot occur, Stark argued, because religion addresses certain human needs and fears that are fundamental, universal and unchanging. He viewed religions in diverse societies like companies in an economy: If a religion appears anemic, it is only because its “firms” aren’t marketing themselves well enough. Once they improve their outreach, messaging and branding – or if other, more innovative religious entrepreneurs step up – religious life continues as usual, or even increases.
As recently as 2015, Stark wrote that religion in the U.S. has actually strengthened, arguing that Americans simply aren’t responding to pollsters much anymore, and therefore results were unreliable. He also noted that only a small slice of people identify as atheists: fewer than 5% in most nations.
In our 2023 book, “Beyond Doubt,” however, religion and secularism scholars Isabella Kasselstrand, Ryan Cragun and I argue that religious faith, participation and identification are unambiguously weaker than they have ever been.
This is not only true in the U.S, but many parts of the world, as seen in surveys of people in countries such as Scotland, South Korea, Chile and Canada.
Our book lays out data on declines in religion in areas that have traditionally been home to many different faiths. In 2013, for example, 10% of Libyans and 13% of Tunisians said that they had no religion. By 2019, those numbers had more than doubled. Declines in belief in God are apparent in countries from Denmark and Singapore to Malaysia and Turkey.
But why? In our analysis, the transition from a traditional, rural, nonindustrial society to an urban, industrial or post-industrial society is a key part of the answer – along the lines of the first sociologists’ predictions. As these changes take place, religion is more likely to become unyoked from other aspects of society, such as education and government. Additionally, there is an increase in the amount of religious diversity in a given society, and there tend to be changes in the family, with parents granting their children more freedom regarding religious choices.
In nearly every society that we examined that has experienced these concomitant phenomena, secularization has occurred – often in spades. Of course, compared to most other wealthy countries, the U.S. is quite religious. Fifty-five percent of Americans, for example, say they pray daily, compared to an average of 22% of Europeans.
Still, we argue that the latest numbers regarding religious belief, behavior and belonging in the U.S. paint a clear portrait of secularization. Beyond the more universal factors, other developments that have been detrimental to religion include a strong reaction against the political power of the religious right, and anger at the Catholic Church’s child sex abuse scandal.
The consequences of religion’s weakening are unclear. But while its meaning for America remains an open question, whether secularization is happening is not.
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All kinds of gambling and maneuvering are coming into season. If you expect your party to take a beating and may not even win re-election to your present post, why not run for something higher, not even with much chance to win but as a bargaining chip for future dealings? Or…. Graphic from Crispiano Adames’s Twitter feed.
First moves for a 2024 presidential race that’s bound to change
Ricardo Martinelli has announced that he’s running but he has upcoming trials that will probably harm his presidential ambitions. Conviction later this year in either the Odebrecht or New Business bribery and money laundering cases would get him ruled off of the ballot.
Even if he manages to beat both raps, the things that will be discussed in those cases will make him appear to be much lesser man. That would not faze his hardcore supporters, but they’re a minority and it may well prod other forces to unite to stop him.
The PRD is broken into four or more factions, and voters here tend not to keep a party in the Palacio de Las Garzas for consecutive terms. The conventional wisdom was that the clumsy corporate lawyer, Vice President Gaby Carrizo, will easily win the primary. A physician who represents the purely political patronage game seeks the embrace of most of the party’s door-to-door activists, National Assembly president Crispiano Adames, has as little charisma as Carrizo and might yet upset him. But now ex-legislator and former party secretary general Pedro Miguel González has jumped in, running more or less to revive the old left-side “tendency” and championing the proposition that the PRD should stand for something. As if to balance him out, on the right side of the party the neofascist PRD deputy from San Miguelito, Zulay Rodríguez, is running as an independent with her xenophobic, homophobic, anti-banker screeds. Should be interesting to watch, anyway.
There will be other parties and candidates, then alliances will be made, over the next year. People here aren’t satisfied with what we have but by and large haven’t rallied around any particular alternative.
Repairing a fiber optic cable in the rubble near Kyiv, to keep Ukrainians in touch with the world via the Internet. Photo by Yuriy Matsyk.
A year on in the Ukraine War and all is not well
What does Vladimir Putin have to show for the invasion he ordered? Huge Russia, a country rich in resources, people and cultural heritage, did not waltz into Kyiv to the adulation of crowds. A fortune that Russia could not afford to blow has been blown on a war based on the miscalculation that Ukrainians would not fight. There have been heavy Russian battlefield casualties. Although any Russian opinion about the war other than enthusiastic (or faked) support is illegal there have been implicit and explicit expression of displeasure. The flagship of Russia’s warm water fleet, the Moskva (Moscow) has been sunk. The undersea gas pipeline that was to make Germany and much of Western Europe dependant on the Russians for energy has been blown up by US and NATO divers. The bridge that was to unite parts of Ukraine seized by Russia was hit with a truck bomb. Russia is diplomatically and culturally isolated in the world, and even if Western sanctions have not been all that effective, the cost to Russia is an increased economic dependence on trade with China. Go back seven or eight centuries to when Russia was a vassal to invaders from its east – Russians think that way – and it becomes an unpleasant prospect.
Ukraine is devastated with many lives lost, many wounded, its cities bombed into rubble, its farm production impaired, its ethnic divisions inflamed, its citizens personal freedoms reduced due to wartime necessities, its electrical system and other infrastructures devastated. It’s not the first time in its history that Ukraine has been a battleground for greater powers, in person or by proxy. Millions of Ukrainians have fled abroad.
Who’s winning? Which side will prevail in the end? If Kyiv, with Mr. Zelensky as Ukraine’s president, holds on for the duration, he’s the great national hero and Mr. Putin, however he may want to spin it, is the big loser whose power will soon be cut off.
We don’t know how it will end. There will be more fighting, and probably a negotiated settlement that will displease the hardest core backers of each side. How far back into history do the borders go back? Ukraine would settle for the way they were on the day that the Soviet Union collapsed, but of course, Sevastopol was founded on the orders of Catherine the Great as home of the Russian warm water fleet and Russia would surely fight on to keep it. There are some ethnic Ukrainians scattered across Russia and a lot of ethnic Russians in Ukraine, many of the latter loyal Ukrainians. There will be no peace without respect for ethnic minorities.
There must be peace, however. Russia and its fifth column in Ukraine, and Ukraine and its Western backers, must sit down to talk, and come away from the table with an enduring end to hostilities.
There are some principles that need to be vindicated:
* No recognition of the claims of bygone or diminished empires should be taken as legitimate. Not Putin’s dreams of restoring imperial Russia’s or the Soviet Union’s possessions and spheres of influence. Not US dreams of being the unquestioned leader of a unipolar world. No NATO membership, nor adhesion to some Moscow-run alliance, for Ukraine. Can Putin’s presidency live with that? Probably not. But Russia surely can.
* The US neoconservative dream of US world leadership based on the diminution of Russia, China and any other up-and-coming power needs to be seen as a nightmare for the rest of the world, a dangerous emotional disturbance that needs to be cured. If that ruins the US weapons and war economy, that would actually be a good thing for the personal and family economies of most Americans. Haven’t people yet figured it out? Daddy Warbucks isn’t the sort of guy who shares his wealth.
* Secessionist movements happen at different times and in different places but they are cruel and destructive. It was obnoxious for Putin to promote ethnic Russian secessionists in Ukraine. It would be obnoxious for him to promote that Republican extremist who is supporting red state secession from the United States from her seat at the US House of Representatives Homeland Security Committee. Did Ukrainians take violent military action to prevent the dismemberment of their country by Russian-backed secessionists? That is how such things normally work. Ukrainian military action to keep their country whole is not, was not and should never be an excuse to dismember the country.
* The notion that citizens of a lapsed or reduced empire who remain in old outposts provide an excuse to annex the places where they are was the ploy that Hitler used to start World War II. First the forced marriage with Austria, then the Sudetenland grab, then the invasion of Poland on the pretext of bringing Danzig (now Gdansk) into Germany. Any old Zonians who have the Canal Zone Forever delusion should forget about that reactionary idea, too. Imperial irredentism is by its very nature a breach of world peace.
Picasso self portrait, 1901.
The meaning of life is to find your gift. The purpose of life is to give it away.
Pablo Picasso
Bear in mind…
I am gradually approaching the period in my life when work comes first. No longer diverted by other emotions, I work the way a cow grazes.
Kaethe Kollwitz
Prodigious in concessions to the interoceanic railroad company, generous to the extreme with implacable speculators, we did not understand that giving the territory was giving the dominion, and that giving the land for permanent and costly works was almost giving the territory.
Justo Arosemena
Men often ask me, ‘Why are your female characters so paranoid?’ It’s not paranoia. It’s recognition of their situation.
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Israeli settlers’ February 26 attack on Palestinians and their property in the town of Huwwara in Nablus district. One Palestinian man was killed, more than 100 were injured, and about 75 houses and 100 cars were set on fire. Israel does not intend the death penalty for this sort of violence. Photo by the Gaza Times.
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Former legislator and former PRD secretary general Pedro Miguel González announces his presidential candidacy. Photo from the Movimiento de Bases para el Rescate Nacional Twitter feed.
Declaration to the country
by the Movimiento de Bases para el Rescate Nacional (Grassroots Movement for National Rescue)
The Movimiento de Bases para el Rescate Nacional, gathered this Sunday morning, February 26, in Panama City, conscious that victory will only be possible when what Omar Torrijos Herrera proposed is fulfilled; to give the greatest possible collective use to what has been achieved with our total sovereignty, eliminating the existing social inequality, and the building of a “welfare state” becomes the religion of all Panamanians.
Therefore we must, as Omar taught us, resume contact with the people and the organized sectors of the country, mobilize our farmers, workers, indigenous people, nationalist entrepreneurs, committed professionals, youth and women to achieve our victory that begins today with the proclamation of the candidacy for president of Panama, in the primaries to be held by the Democratic Revolutionary Party on Sunday, June 11, 2023.
Our movement proposes to take action on the issue of Social Security, pausing to take control of our wealth that is today in the hands of multinational companies, so that the state has the capacity to face the enormous deficit of its pension program.
We categorically reject the proposal of the current leadership of the party that curtails internal democracy by trying to reserve popularly elected positions throughout the nation, thereby restricting the aspirations of the party’s membership and violating the provisions of the party statute and electoral laws, as well as the constitutional right to elect and be elected.
We propose an electoral alliance with the organized sectors of Panamanian society, including those that do not belong to other political parties, to try to add the proposals of the organized people.
The movement also reiterates its rejection of political patronage system which has become enthroned in political organizations, including the PRD, thus generating a lack of critical and proactive attitude towards government policies.
By virtue of what has been stated, we consider it necessary to propose a leader committed to the principles and project of Torrijismo, with the ability to lead a country in an inclusive and transparent manner, which allows us to build a management model that transforms us into the Panama that they dreamed in that generation, which, seeing with long lights, believed in a prosperous, equitable and just country for all.
For what has been stated here, we have decided to propose Pedro Miguel González, an institutional leader, a Torrijista and one who is committed to the best interests of the country, as a standard-bearer and pre-candidate for the PRD presidential primaries.
With this designation, our movement not only proposes a leader to champion our party to win the election, but in addition to winning, to implement the project for which our party was founded. Thus to guarantee this and future generations the Panama that we all want and that we need to rescue.
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About a decade ago, the world’s biggest economies agreed to crack down on multinational corporations’ abusive use of tax havens. This resulted in a 15-point action plan that aimed to curb practices that shielded a large chunk of corporate profits from tax authorities.
But, according to our estimates, it hasn’t worked. Instead of reining in the use of tax havens – countries such as the Bahamas and Cayman Islands with very low or no effective tax rates – the problem has only gotten worse.
By our reckoning, corporations shifted nearly US$1 trillion in profits earned outside of their home countries to tax havens in 2019, up from $616 billion in 2015, the year before the global tax haven plan was implemented by the group of 20 leading economies, also known as the G-20.
In a new study, we measured the excessive profits reported in tax havens that cannot be explained by ordinary economic activity such as employees, factories and research in that country. Our findings – which you can explore in more detail along with the data and an interactive map in our public database – show a striking pattern of artificial shifting of paper profits to tax havens by corporations, which has been relentless since the 1980s.
Global crackdown
The current effort to curb the legal corporate practice of using tax havens to avoid paying taxes began in June 2012, when world leaders at the G-20 meeting in Los Cabos, Mexico, agreed on the need to do something.
The Organization for Economic Cooperation and Development, a group of 37 democracies with market-based economies, developed a plan that consisted of 15 tangible actions it believed would significantly limit abusive corporate tax practices. These included creating a single set of international tax rules and cracking down on harmful tax practices.
In 2015, the G-20 adopted the plan officially, and implementation began across the world the following year.
In addition, following leaks like the Panama Papers and Paradise Papers – which shed light on dodgy corporate tax practices – public outrage led governments in the U.S. and Europe to initiate their own efforts to lower the incentive to shift profits to tax havens.
We found that the world’s biggest multinational businesses shifted 37% of the profits – or $969 billion – they earned in other countries (outside the headquarter country) to tax havens in 2019, up from about 20% in 2012 when G-20 leaders met in Los Cabos and agreed to crack down. The figure was less than 2% back in the 1970s. The main reasons for the large increase were the growth of the tax avoidance industry in the 1980s and US policies that made it easier to shift profits from high-tax countries to tax havens.
Tax haven crackdown?
We also estimate that the amount of corporate taxes lost as a result reached 10% of total corporate revenue in 2019, up from less than 0.1% in the 1970s.
In 2019, the total government tax loss globally was $250 billion. U.S. multinational corporations alone accounted for about half of that, followed by the U.K. and Germany.
Global minimum tax
How do policymakers fix this?
So far, the world as a whole has been trying to solve this problem by cutting or scrapping corporate taxes, albeit in a very gradual way. In the past 40 years, the global effective corporate tax rate has fallen from 23% to 17%. At the same time, governments have relied more heavily on consumption taxes, which are regressive and tend to increase income inequality.
But the root cause of profit-shifting is the incentives involved, such as generous or lenient corporate tax rates in other countries. If countries could agree on a global minimum corporate tax rate of, say, 20%, the problem of profit-shifting would, in our estimation, largely disappear, as tax havens would simply cease to exist.
Our research suggests implementing this type of tax reform is necessary to reverse the shift of ever-greater amounts of corporate profits going to tax havens – instead of being taxed by the governments where they operate and create value.
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