ROBERT SIEGEL, HOST:
At this week's G-8 summit, the leaders of the world's wealthiest nations promise to fight what they call the scourge of tax evasion. The summit concluded with a pledge to end the use of tax shelters by multinational corporations. But as NPR's Jim Zarroli reports, there are still big questions about how to tackle the problem.
JIM ZARROLI, BYLINE: In the aftermath of the global recession, countries all over the world have struggled with budget shortfalls, and more and more of them have come to blame part of their revenue problems on tax avoidance. The G-8 statement this week represents a kind of doubling down on the determination of wealthy countries to take on the problem. Here was British Prime Minister David Cameron on Tuesday.
PRIME MINISTER DAVID CAMERON: If you want a low-tax economy, which I believe is fundamental to growth, you have to collect the taxes that are owed. That is only fair for companies and for people who play by the rules.
ZARROLI: But the G-8 statement was short on specifics about how to address the problem. It says tax authorities in different countries should share information more readily. It also says multinational companies should be more transparent about the taxes they pay.
Cameron spoke about creating a new international mechanism that would track where companies are earning their profits and under what name. That would make it clear whether they're paying what they owe. But the statement stops short of advocating a central ownership registry for corporations, something many tax activists have long pressed for. Jack Blum of Tax Justice Network USA says such a registry would make it harder for companies to hide their profits in shell corporations.
JACK BLUM: A registry will go a very long way to helping people sort out who's hiding money where and really help tax collectors collect the money that's owed.
ZARROLI: Blum says the G-8 statement is a step in the right direction.
BLUM: They've said a lot of the right things. Now the question is how will they do it?
ZARROLI: He says it's now up to lawmakers in the G-8 countries to spell out and agree on exactly what they want to do, and that promises to be a long and contentious process.
BLUM: This isn't a treaty. It's nothing that's passed the Congress. There are many hurdles between here and real action.
ZARROLI: Any major change in U.S. tax law is certain to face opposition by business groups. Cathy Schultz of the National Foreign Trade Council says in a complex global economy, companies shift money around for good reason. And what often seems like tax evasion to the public is really a legal effort by companies to minimize their tax bill.
CATHERINE SCHULTZ: If it's legal under the tax rules for them to minimize their taxes, we need to change the underlying tax rules. We need to go to tax reform. We need to fix our system.
ZARROLI: Business groups also insist that the real problem is that U.S. corporate tax rates are higher than in other developed countries. Any effort to crack down on tax evasion, they say, needs to be done as part of an overall reform of the nation's tax code. Jim Zarroli, NPR News.
NPR transcripts are created on a rush deadline by Verb8tm, Inc., an NPR contractor, and produced using a proprietary transcription process developed with NPR. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.