Taxing Ghosts: Closing Residency Loopholes to Fund Post-Pandemic Recovery Efforts

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Recovery from the COVID-19 pandemic depends on the ability of governments to find resources to fund essential public services. Most governments will need to do so by raising tax revenues. However, wealthy individuals have become impossible to tax effectively, as they are increasingly able to manipulate their legal residence into tax haven locations, in effect "ghosting" the tax systems from which they collectively benefit. Multinational corporations routinely book profits in tax favorable formats and locations, ghosting the very systems that have been built and maintained to make their existence and profitability possible. Ghosting is a global phenomenon that affects states both rich and poor, but its outsize impact on developing countries makes it a systemic threat to global economic stability, materializing into fiscal crisis in countries around the world. Reform proposals currently circulating at the international level focus on the specific needs of globally dominant (mostly wealthy) states, and do not fully contemplate the problem of ghosting as a systemic, worldwide phenomenon that must be addressed directly to build a tax system that will both enable the current post-Covid recovery and prepare for future pandemics and other fiscal shocks.This project focuses on the international tax reform agenda that illuminates the systemic problem of ghosting and demonstrates the procedural and substantive reforms needed to address it. The significance of our research lies in our holistic, system-based approach, drawing on research and expertise from law, sociology, international migration studies, and African development studies to examine relevant legal and geo-political factors comprehensively. We will research the national and international factors that facilitate tax ghosting by wealthy individuals and corporations, demonstrate the disparate economic threats created by such tax ghosting, analyze why states have failed to recognize the threats to date, and propose novel yet feasible policy solutions based on our findings.