On corporate taxation, national governments are trapped in a race to the bottom. As technology becomes more important to all sectors of the economy, the factors that create economic value — intellectual property, software, computing power — become more mobile. Each country, hoping to retain and attract jobs and investment, adjusts tax policy to attract these intangible (or at any rate mobile) assets. But the situation is unstable: there always seems to be another country ready to undercut whoever is currently offering companies the sweetest deal.

The result is a steady erosion of tax rates on multinational companies — at a time when revenue-strapped government are committed to austerity (the UK, for example) or running historic deficits (the US) or both.

A Financial Times analysis of the effective tax rates of multinational corporations shows the effects of this unhappy situation. In the ten years since the financial crisis, the reported effective tax rates at the ten biggest public companies in nine sectors fell 9 per cent (over the same period, tax rates for individuals have risen, on average). This is actually a slower rate of decline than in the years between 2000 and 2008.