1 February 2015   Leave a comment

One of the paradoxes of the current world system is that its political structure is dominated by nation-states that have strict territorial limits and its economic structure is almost completely globalized.  The paradox means that some entities, such as multinational corporations, operate in both structures.  Some corporations avoid the taxes imposed by some nation-states by placing some of their profits in other nation-states with lower tax rates.  Many believe that such a system is unfair since most of the profits are made in high-tax states and not in the lower-tax states such as the British Virgin Islands and Bermuda.  President Obama is proposing that the US exercise extra-territorial authority to tax corporations even if their money does not reside in the territorial boundaries of the US.  As one can see from the chart below, many of these tax havens rely heavily on these tax dodges.

The killing of Japanese citizens by the Islamic State has raised, once again, the issue of whether ransoms should be paid to terrorists to save innocent civilians.  The official US position is that such ransoms can never be paid because payment would only encourage further kidnappings.   Jordan is currently confronting this issue as the Islamic State holds one of its fighter pilots and has demanded the release of a convicted suicide bomber for his release.  The dilemma is a classic example of the realist assertion that interests and values are not interchangeable.

After a short respite, protesters are back in the streets of Hong Kong demanding the right to choose candidates for local elections.  The number of protesters was much smaller than those of last year, but their return is evidence of the commitment to a liberal democracy in Hong Kong.  The Beijing government insists upon the right of the Communist Party to select candidates, and is reluctant to concede, fearing that other localities within China might demand similar rights.

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Posted February 1, 2015 by vferraro1971 in World Politics

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