Breaking with Sovereignty: An Essay on Power Relations and Global Redistribution of Tax Revenue

Sovereignty to tax is a central idea for international tax law. However, to be formally sovereign is not the same thing as being able to effectively exercise sovereignty. The mobility of capital and businesses, or at least the perception of their mobility, is increasingly pressuring state sovereignty. In this essay I use the term ‘economic-ideological forces’ to describe this phenomenon. When sovereignty is understood in a narrower and more formal sense it blinds itself in relation to these forces. I argue that the concept of sovereignty then becomes a tool for maintaining established power relations in-between states. By breaking free from this understanding of sovereignty it becomes possible to also break free from preconceived ideas of how the international tax order must be structured. An alternative to discussing the allocation of taxing rights could for instance be to start discussing the allocation of tax revenue in-between states.