Social Europe

  • EU Forward Project
  • YouTube
  • Podcast
  • Books
  • Newsletter
  • Membership

Trump’s America: The New Global Tax Haven?

Joseph Stiglitz 30th April 2025


Trump is turning America into a tax haven, dismantling safeguards and fueling inequality through global deregulation.

u4219834692035b95b1f0 2

Donald Trump is quickly turning the United States into the greatest tax haven in history. One need only note the Treasury Department’s mandate to withdraw from the transparency regime that shares the real identities of company owners; the administration’s withdrawal from negotiations to establish a UN Framework Convention on International Tax Cooperation; its refusal to enforce the Foreign Corrupt Practices Act; and massive crypto de-regulation.

This seems to be part of a broader strategy to undermine 250 years of institutional safeguards. The Trump administration has violated international treaties, ignored conflicts of interest, dismantled checks and balances, and impounded congressionally allocated funds. The administration isn’t debating policy; it’s trampling the rule of law.

But Trump does love one tax: import tariffs. He appears to believe that foreigners are footing the bill, thereby providing the money to cut taxes for billionaires. He also seems to believe that tariffs will eliminate trade deficits and return manufacturing to the US. Never mind that tariffs are paid by importers, driving up domestic prices, and are being levied at the worst time possible, just as the US is recovering from an inflationary episode.

Moreover, elementary macroeconomics shows that multilateral trade deficits reflect the disparity between domestic savings and domestic investment. Trump’s tax cuts for billionaires will widen the gap, because deficits subtract from domestic national savings. So, ironically, policies like tax cuts for billionaires and corporations increase the trade deficit.

Since Ronald Reagan, conservatives have claimed that tax cuts pay for themselves by boosting economic growth. But it didn’t work that way for Reagan, and it didn’t work that way for Trump during his first term. Empirical research confirms that tax cuts for the rich have no measurable impact on economic growth or unemployment, but do increase income inequality immediately and persistently. The proposed extension of the 2017 Tax Cuts and Jobs Act – the biggest corporate tax cuts in US history – would add around $37 trillion to the US national debt over the next 30 years, without delivering the promised economic boost.

Trump is worsening the trade deficit at the microeconomic level, too. The US has become a service economy. Among its largest exports are tourism, education, and health care. But Trump has systematically undermined each. What tourist, student, or patient would want to come to the US knowing that he could be arbitrarily detained and held for weeks? The undermining of America’s premier education institutions, the arbitrary cancellation of student visas, and the defunding of science research have cast a deep pall over these critical sectors.

Trump’s strategically flawed approach is already backfiring. China is one of America’s biggest trading partners, and the US depends on it for critical imports. China has already retaliated. Fear of stagflation – higher inflation combined with stagnant growth – has hit the stock and bond markets. And this is just the beginning.

Thanks to Elon Musk’s Department of Government Efficiency, tax revenues could plummet by over 10 percent this year because of weaker enforcement and compliance. A reduction of some 50,000 IRS workers would result in $2.4 trillion of forgone revenue over the next ten years, compared to the projected $637 billion increase under provisions of the Inflation Reduction Act that aimed to boost the IRS workforce. The agenda is clear: not just lower tax rates for the rich, but weaker enforcement.

In a world where capital and rich individuals can cross borders freely, international cooperation is the only way for governments to ensure that multinational corporations and the ultra-rich are fairly taxed. In this context, halting the enforcement of beneficial-ownership data collection, tolerating anonymity-enhancing crypto markets, and abandoning the process to conclude a new UN tax convention and a global minimum tax reveal a deliberate pattern: dismantling multilateral frameworks designed to combat tax avoidance and money laundering. The “pausing” of enforcement of the Foreign Corrupt Practices Act indicates that the US no longer minds even bribery and graft.

What we are witnessing is an apparent attempt by Trump, Musk, and their billionaire cronies to forge a kind of capitalism modeled after the lawless zones of the offshore world. It’s not just a tax revolt; it’s an all-out assault on any law that threatens the extreme accumulation of wealth and power.

Nowhere is this more evident than in their embrace of crypto. The explosion of underregulated crypto exchanges, online casinos, and betting platforms has boosted the global illicit economy. Under Trump, the Treasury Department has lifted sanctions and regulations on platforms that obfuscate transactions. Trump has even signed an executive order to establish a “strategic cryptocurrency reserve” and has held the first White House crypto summit. The US Senate followed suit, killing a provision that would have required crypto platforms to identify and report users.

Trump, who himself issued a controversial meme coin and may soon launch a crypto-based video game based on “Monopoly,” has now installed a crypto insider at the helm of the Securities and Exchange Commission. Paul Atkins is a member of a policy group that advocates for crypto assets and non-bank financial systems.

Cryptocurrencies are about one thing: secrecy. We have perfectly good currencies in the dollar, the yen, the euro, and others. And we have efficient trading platforms for buying goods and services. Demand for cryptocurrencies comes from the desire to hide money. People involved in nefarious activities, including money laundering and tax avoidance and evasion, don’t want what they do to be easily traceable.

The rest of the world cannot stand by and watch. We’ve seen that global cooperation can work, as shown by the global 15 percent minimum tax on the profits of multinationals, which more than 50 countries are now introducing. Within the G20, the consensus forged last year under Brazil’s leadership calls for the superrich to pay their fair share.

The US has distanced itself from international agreements but, paradoxically, the absence of its diplomacy may help strengthen multilateral negotiations to deliver a more ambitious outcome. In the past, the US would demand that an agreement be weakened (typically to benefit one special interest or another), but in the end, would refuse to sign. This is what happened during the OECD negotiations for the taxation of multinational corporations. Now, the rest of the world can get on with the task of designing a fair and efficient global tax architecture.

Addressing extreme inequality through international cooperation and inclusive institutions is the real alternative to rising authoritarianism. America’s self-isolation creates an opportunity to rebuild globalization on truly multilateral grounds – a G-minus-one for the twenty-first century.

Copyright Project Syndicate

Pics
Joseph Stiglitz

Joseph E Stiglitz, a Nobel laureate in economics and professor at Columbia University, is a former chief economist of the World Bank, chair of the US president’s Council of Economic Advisers and co-chair of the High-Level Commission on Carbon Prices. He is a member of the Independent Commission for the Reform of International Corporate Taxation.

Harvard University Press Advertisement

Social Europe Ad - Promoting European social policies

We need your help.

Support Social Europe for less than €5 per month and help keep our content freely accessible to everyone. Your support empowers independent publishing and drives the conversations that matter. Thank you very much!

Social Europe Membership

Click here to become a member

Most Recent Articles

u421983467f bb39 37d5862ca0d5 0 Ending Britain’s “Brief Encounter” with BrexitStefan Stern
u421983485 2 The Future of American Soft PowerJoseph S. Nye
u4219834676d582029 038f 486a 8c2b fe32db91c9b0 2 Trump Can’t Kill the Boom: Why the US Economy Will Roar Despite HimNouriel Roubini
u42198346fb0de2b847 0 How the Billionaire Boom Is Fueling Inequality—and Threatening DemocracyFernanda Balata and Sebastian Mang
u421983441e313714135 0 Why Europe Needs Its Own AI InfrastructureDiane Coyle

Most Popular Articles

startupsgovernment e1744799195663 Governments Are Not StartupsMariana Mazzucato
u421986cbef 2549 4e0c b6c4 b5bb01362b52 0 American SuicideJoschka Fischer
u42198346769d6584 1580 41fe 8c7d 3b9398aa5ec5 1 Why Trump Keeps Winning: The Truth No One AdmitsBo Rothstein
u421983467 a350a084 b098 4970 9834 739dc11b73a5 1 America Is About to Become the Next BrexitJ Bradford DeLong
u4219834676ba1b3a2 b4e1 4c79 960b 6770c60533fa 1 The End of the ‘West’ and Europe’s FutureGuillaume Duval
u421983462e c2ec 4dd2 90a4 b9cfb6856465 1 The Transatlantic Alliance Is Dying—What Comes Next for Europe?Frank Hoffer
u421983467 2a24 4c75 9482 03c99ea44770 3 Trump’s Trade War Tears North America Apart – Could Canada and Mexico Turn to Europe?Malcolm Fairbrother
u4219834676e2a479 85e9 435a bf3f 59c90bfe6225 3 Why Good Business Leaders Tune Out the Trump Noise and Stay FocusedStefan Stern
u42198346 4ba7 b898 27a9d72779f7 1 Confronting the Pandemic’s Toxic Political LegacyJan-Werner Müller
u4219834676574c9 df78 4d38 939b 929d7aea0c20 2 The End of Progess? The Dire Consequences of Trump’s ReturnJoseph Stiglitz

KU Leuven advertisement

The Politics of Unpaid Work

This new book published by Oxford University Press presents the findings of the multiannual ERC research project “Researching Precariousness Across the Paid/Unpaid Work Continuum”,
led by Valeria Pulignano (KU Leuven), which are very important for the prospects of a more equal Europe.

Unpaid labour is no longer limited to the home or volunteer work. It infiltrates paid jobs, eroding rights and deepening inequality. From freelancers’ extra hours to care workers’ unpaid duties, it sustains precarity and fuels inequity. This book exposes the hidden forces behind unpaid labour and calls for systemic change to confront this pressing issue.

DOWNLOAD HERE FOR FREE

ETUI advertisement

HESA Magazine Cover

What kind of impact is artificial intelligence (AI) having, or likely to have, on the way we work and the conditions we work under? Discover the latest issue of HesaMag, the ETUI’s health and safety magazine, which considers this question from many angles.

DOWNLOAD HERE

Eurofound advertisement

Ageing workforce
How are minimum wage levels changing in Europe?

In a new Eurofound Talks podcast episode, host Mary McCaughey speaks with Eurofound expert Carlos Vacas Soriano about recent changes to minimum wages in Europe and their implications.

Listeners can delve into the intricacies of Europe's minimum wage dynamics and the driving factors behind these shifts. The conversation also highlights the broader effects of minimum wage changes on income inequality and gender equality.

Listen to the episode for free. Also make sure to subscribe to Eurofound Talks so you don’t miss an episode!

LISTEN NOW

Foundation for European Progressive Studies Advertisement

Spring Issues

The Spring issue of The Progressive Post is out!


Since President Trump’s inauguration, the US – hitherto the cornerstone of Western security – is destabilising the world order it helped to build. The US security umbrella is apparently closing on Europe, Ukraine finds itself less and less protected, and the traditional defender of free trade is now shutting the door to foreign goods, sending stock markets on a rollercoaster. How will the European Union respond to this dramatic landscape change? .


Among this issue’s highlights, we discuss European defence strategies, assess how the US president's recent announcements will impact international trade and explore the risks  and opportunities that algorithms pose for workers.


READ THE MAGAZINE

Hans Böckler Stiftung Advertisement

WSI Report

WSI Minimum Wage Report 2025

The trend towards significant nominal minimum wage increases is continuing this year. In view of falling inflation rates, this translates into a sizeable increase in purchasing power for minimum wage earners in most European countries. The background to this is the implementation of the European Minimum Wage Directive, which has led to a reorientation of minimum wage policy in many countries and is thus boosting the dynamics of minimum wages. Most EU countries are now following the reference values for adequate minimum wages enshrined in the directive, which are 60% of the median wage or 50 % of the average wage. However, for Germany, a structural increase is still necessary to make progress towards an adequate minimum wage.

DOWNLOAD HERE

Social Europe

Our Mission

Team

Article Submission

Advertisements

Membership

Social Europe Archives

Themes Archive

Politics Archive

Economy Archive

Society Archive

Ecology Archive

Miscellaneous

RSS Feed

Legal Disclosure

Privacy Policy

Copyright

Social Europe ISSN 2628-7641