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We’ve mentioned the incidence question several times before, but TJN’s Director John Christensen was at a debate in London last night on the future of the corporate income tax, alongside Mike Devereux of the Oxford Centre for Business Taxation; Helen Miller of the Institute for Fiscal Studies; Simon Walker of the Institute of Directors, and Margaret Hodge, chair of the UK All Party Parliamentary Group on Tax.
It was a wide-ranging discussion, but one question that came up repeatedly was the question of the ‘incidence’ of the corporate income. Put most crudely, is it corporate shareholders who ultimately shoulder the tax charge, or is it workers? There are a number of people who claim that research demonstrates that the tax charge falls squarely on workers: as a top UK tax official put it:
“The consensus, among economists at least, is that it’s predominantly the employee who foots the bill [for the corporation tax.]”
It is this claim that is the great incidence hoax. There is no such consensus: and we argue that the opposite is true.
We thought we’d take the opportunity to re-publish a section of our 2015 document Ten Reasons to Defend the Corporate Income Tax. Don’t forget to go to the original for the all-important footnotes. (See pp 7-8 on this question.) Continue reading “Corporate tax: the great incidence hoax”
From the 2016 budget speech in South Africa, from Finance Minister Pravin Gordhan:
“We will continue to act aggressively against the evasion of tax through transfer pricing abuses, misuse of tax treaties and illegal money flows. Drawing on the work of the OECD, the G20 joint project on base erosion and profit shifting and independent bodies such as the Tax Justice Network, further measures will be taken to address such revenue losses, including inappropriate use of hybrid debt instruments.”
A bit self-congratulatory of us to put this here, but hey. We’d add, however, a couple of things. Continue reading “Quote of the day: South Africa’s Finance Minister”
TJN is a strong supporter of the idea of a Land Value Tax, as part of a comprehensive tax system. It is a kind of wealth tax: a key recommendation in Thomas Piketty’s excellent Capital in the Twenty-First Century, and a long-running recommendation of TJN’s. The LVT, popularised by the 19th Century economist Henry George, building on the work of Adam Smith and David Ricardo, is an effective fair way to raise revenue from rent-seekers.
Now a new report for the London Assembly Planning Committee examines the tax. This is of great relevance in a world of falling interest rates (and possibly, as some argue, ‘secular stagnation’) which has seen a huge rise in asset prices – including house prices, in London and elsewhere. The report contains a map of the countries that have or have had experience with LVT:
Read the report here. This is a thoroughly modern, tax justice idea.
Highlighting a presentation by TJN’s Director John Christensen at the Max Planck Institute in December, and a chapter in a new book by two TJN authors, on the same theme. First, Max Planck, which published the details yesterday:
Click here for the presentation and podcast
Continue reading “National Competitiveness: a Dangerous Obsession”
Lovisa Möller
A guest blog by Lovisa Möller, ActionAid
Developing countries have now signed on to around a whopping 1,500 tax treaties with their wealthier counterparts. These agreements between countries carve up the right to tax business that operate across borders. Continue reading “Report: The treaties that cut taxes in poorest countries”
From the Financial Transparency Coalition, of which TJN is a member.
OECD invites developing countries to join anti-tax avoidance plan, but only after the rules have been written
The OECD’s plan to open the BEPS system to developing countries after it has already been designed highlights the need for a truly universal tax body
Ahead of this week’s G20 Finance Ministers meeting, the Organization for Economic Cooperation and Development announced plans to invite non-member countries to join in its anti-tax avoidance system. The Base Erosion and Profit Shifting (BEPS) project aims to tackle the problem of corporate tax dodging. Although the invitation for inclusion comes as the global discussion about tax dodging reaches new heights, the bones of the plan have been in place for years, leaving no room for substantive input.
The Australian Senate has just passed the Bill that will tie Australia into the new global system of tax authorities sharing information with each other automatically. Unfortunately, this system, set up through the OECD, currently had not allowed full participation by developing countries.
With help from international colleagues, TJN’s Andres Knobel and Joe Stead, we were able to get Labor party support for an amendment to the Bill that will require de-identified aggregated information about accounts held in Australia to be published each year by the Australian Tax Office (ATO.) Continue reading “Australia passes new information sharing provision”
TJN’s Andres Knobel participated in a conference in Panama on February 18-19, hosted by the Inter-American Centre of Tax Administrations (CIAT) & the German International Cooperation Agency (GIZ), and involving tax administrations from Barbados, Bolivia, Brazil, Canada, Chile, Colombia, Costa Rica, Dominican Republic, Ecuador, El Salvador, Italy, Mexico, Panama, Peru, Portugal, Spain and Uruguay.
The conference’s purpose was to push forwards a new initiative (called DIP) to boost the availability of public information of tax Interest among CIAT member states. In plain English, the proposal involves creating an interactive map with details of all relevant “public” information from each jurisdiction (e.g. commercial registry web-page, registry of importers and exporters, etc.), to give foreign authorities easy access to public information without needing to send a formal request. Continue reading “New project to share tax info in the Americas”
TJN laments the closure of the Centro de Economía y Finanzas para el Desarrollo de la Argentina” (Cefid-ar), an Argentine organisation heavily involved in research on illicit financial flows.
Their work has shed light on capital flight from Argentina, estimating the figures of hidden money held offshore by Argentine residents. Their papers also focused and explained the role of enablers in the illicit financial flows system, and provided insight on transfer mispricing mechanisms by agribusiness exporters, one of the main economic sectors of the country. Continue reading “On the closure of the Argentinian think tank Cefid-AR”
In the underworld, this one is known as the “Bin Laden”
In June 2014 we wrote an article about Big Bills: those high-value cash notes that are primarily of use to the world’s criminals (when was the last time you saw a 500 Euro note in the flesh, for instance?) The countries that print them can literally make a killing from so doing.
Big bills have been in the news again recently, with proposals in Europe stop printing the damn things. A New York Times headline today summarises: Getting Rid of Big Currency Notes Could Help Fight Crime. Continue reading “Big bills: let’s recall them all”
For our workshop on tax havens and corruption at City University, London, 28th – 29th April 2016, our draft programme is here.
Please click here to register, and follow the links.
We are calling for expressions of interest in contributing to an issue of Tax Justice Focus, dedicated to exploring the relationship between corporate tax reform, value theory, and the global transition to a post-capitalist, post-patriarchal, post-work society. An introductory essay is available here, setting out some of the linkages that we perceive to exist between these topics.
Tax Justice Focus is the flagship newsletter of the Tax Justice Network. It is issued two to four times a year, and contains four to six articles roughly 1000-1200 words in length. The articles are pitched for an engaged general audience rather than for an academic one.
If you would like to express interest in contributing an article linking corporate tax reform to any of the following topics please email david.quentin+TJF@gmail.com by 31 March 2016.
Contributions from or related to any country will be considered.
The introduction and manifesto for corporate tax reform and value theory is here.
The Daily Mirror newspaper in the UK is running a story entitled Google is paying even LESS tax than thought as UK deal is just 2%.
This is based on a new TJN analysis, based not on current tax rules but on what Google might pay if the UK were to adopt a fairer tax system that we’ve advocated. We analysed Google’s tax settlement in the UK for 2014, and we find that – even after a deal with the UK tax authorities to pay a little extra tax – just one tenth of the Google’s real profits are actually declared for tax purposes in the UK. This results in a real, effective tax rate of around two per cent.
This new book from Oxford University Press, edited by Thomas Pogge and Krishen Mehta, publishes fifteen chapters by leading tax justice scholars on different topics ranging from country-by-country reporting to unitary taxation, from automatic information exchange to tax wars, with clear and practicable policy recommendations for how to move forward on a tax justice agenda. Continue reading “Global Tax Fairness: new book from Oxford University Press”
In our 50th Taxcast edition: which country is the second easiest in the world after Kenya to set up an anonymous shell company? We shine the spotlight on tax haven USA and the lawyers secretly filmed by Global Witness advising a fake corrupt African government Minister. Also: we discuss Google’s tiny tax payment in the UK and how politicians are interfering with the independence of our tax authorities, and the rise of the unnoticed tax haven of Taiwan. Plus more scandal and analysis featuring Eryn Schornick of Global Witness, Clark Gascoigne of the Financial Accountability and Corporate Transparency (FACT) Coalition, John Christensen and Markus Meinzer of the Tax Justice Network, the voices of some (now shamefaced) New York lawyers. Produced and presented by Naomi Fowler for the Tax Justice Network.
“If I were corrupt foreign official I’d be looking to the United States…The rest of the world is leaping ahead of the United States in tax transparency stuff and the United States is continuing to go it alone.”
Clark Gascoigne, Financial Accountability and Corporate Transparency (FACT) Coalition
The United States is “so hostile to moving anywhere nearer, you know, full-fledged membership of international community and it’s geared towards US first, US interest alone and above everyone else’s.”
Markus Meinzer, Tax Justice Network“I regret to say this, I really do, we cannot trust the tax authorities any longer to act in the public interest, it is quite clear that as a result of of political lobbying and state capture that the politicians in many countries…can no longer be trusted to not interfere constantly with the supposedly independent tax authorities”
John Christensen, Tax Justice Network
Watch the videos in full and learn about Global Witness’s undercover sting here.
Never miss a Taxcast: subscribe to our youtube channel Tax Justice TV or email naomi[at]taxjustice.net or grab our rss feed or find us on iTunes
The UN Sustainable Development Goals (SDGs, the global framework guiding policy until 2030) include a target to reduce illicit financial flows (IFF), under SDG 16 on peace and security.
Our research director, Alex Cobham, has written an article for the European Centre for Development Policy Management tracing the linkages between illicit flows and security, and the basis for this important target – along with a few additional suggestions for indicators, to ensure its effectiveness. Continue reading “Illicit financial flows: the links to peace and security concerns”
Offshore, underworld
In the New York Review of Books:
The Offshore Trillions
John Christensen and James Henry, reply by Cass R. Sunstein
MARCH 10, 2016 ISSUE
In response to: Parking the Big Money from the January 14, 2016 issue
To the Editors:
Continue reading “TJN in New York Review of Books: Missing Trillions”
We get a nice name check in an article in this week’s Economist, which goes after a subject we’ve been particularly exercised about for some time: Tax Haven USA.
It cites one player in the spreading game:
“It’s going nuts. Everyone is doing it or looking into it,” says a tax consultant, speaking of the American loophole.”
Continue reading “Apply withholding taxes to tackle tax haven USA”
From the European Green Party:
The full report finds that IKEA structured itself to dodge €1 billion in taxes over the last 6 years using onshore European tax havens.
Rebecca Wilkins, tax justice hero. Photo from CTJ
The tax justice movement has lost a treasured colleague and friend. Rebecca Wilkins, of razor-sharp intellect and with a powerful gift for tax justice advocacy, passed away on Sunday 14 February 2016.
While serving as legal counsel for Citizens for Tax Justice in Washington DC, Rebecca was diagnosed with cancer which went into remission following treatment. With her customary energy and drive, and her desire to serve the tax justice cause, Rebecca also took on the role of executive director of TJN-USA and the FACT Coalition. Tragically, cancer returned, but Rebecca continued working and serving the cause as long it was humanly possible to do so.
CTJ, in their tribute to Rebecca, speak of “her unyielding passion for tax justice”: Continue reading “Remembering Rebecca Wilkins, champion for tax justice”
We’ve just written about HSBC’s extensive lobbying effort to water down UK banking reforms by pretending it was planning to throw its toys out of the pram relocate its head office from London to Hong Kong if it didn’t get what it wanted. But inside HSBC, a very real relocation is underway.
Via TJN contacts, this email has been sent out:
“We would like to inform you of a planned change in the place of incorporation and headquarters of HSBC Bank Middle East Limited (HBME).
. . . HBME intends to move its place of incorporation and head office to the Dubai International Financial Centre (DIFC), following which it will become lead regulated by the Dubai http://humanrightsfilmnetwork.org/cialis Financial Services Authority (the Migration).”
This has been flagged previously, but it seems things are now moving.
Anyone who thinks this relocation is going to contribute to the financial or ethical health of this scandal-happy global bank needs to consider this, about the “twisted Switzerland of the Middle East”. Continue reading “HSBC: a very different relocation, tax haven to muckier tax haven”