Page 74 – Tax Justice Network

The Economist has noticed the Finance Curse

The Resource Curse, or perhaps the Finance Curse, in pictures

Regular readers will know that we have a permanent webpage entitled The Finance Curse explaining how countries with oversized financial sectors suffer a range of harms that are rather similar to a so-called Resource Curse that afflict resource-rich countries, and for a wide range of similar reasons.

The Economist has recently written a long article entitled What’s Wrong with Finance, in which they basically endorse our thesis (though without mentioning us. Hat tip: @NikoLusiani) As they note:

Continue reading “The Economist has noticed the Finance Curse” →

Building the foundation for tax justice through human rights

Click here for a Spanish language version of the following statement, which comes out of the meeting between tax justice and human rights communities in Lima, Peru on 29th/30th April 2015.

For years, the tax justice and human rights movements have worked along parallel paths to confront the rampant inequality and socio-economic deprivation that result from unfair fiscal policies and blight the lives of billions. These two communities of practice joined forces together last week in Lima, Peru for an international strategy meeting, Advancing Tax Justice through Human Rights, to build a platform for strategy-exchange and alliance-forming. Continue reading “Building the foundation for tax justice through human rights” →

British tax havens fret about UK election

Note whose head is on that stamp

From the BVI Beacon, in the British Virgin Islands, a story about the UK’s General Election taking place today:

“The biggest election issue pertaining to overseas territories is whether they each will be required to compile a publicly searchable register listing the beneficial owners of companies based in their jurisdictions.
Leaders in the VI and other OTs [British Overseas Territories] have opposed this proposal, which they say could damage financial services industries. But both Labour and Conservative officials have pushed for the registers . . . The parties, however, differ on how to implement that policy: Labour argues that OTs should be required to adopt a register, and the Conservatives counter that they should be encouraged but not forced to do so.”

Continue reading “British tax havens fret about UK election” →

Edouard Perrin, PwC and the Dodgy Duchy of Luxembourg

Edouard Perrin, victimised for defending the public interest

The investigative British magazine Private Eye is currently running a short, incisive piece about the Dodgy Duchy of Luxembourg and PwC, which, given its importance, bears repeating in full. It runs as follows: Continue reading “Edouard Perrin, PwC and the Dodgy Duchy of Luxembourg” →

TJN Report and Accounts for year ended 31 December 2014

Tax justice activists in Lima, Peru, 1st May 2015 calling on companies to pay their taxes

Our audited accounts and the Director’s Report for year ended 31st December 2014 are available here. Continue reading “TJN Report and Accounts for year ended 31 December 2014” →

The Tax Justice Research Bulletin 1(4)

Alex Cobham, TJN’s esteemed Director of Research

Corrected: the earlier version referring to a Banque de France Report said “$8bn revenue loss” when it should have referred to an $8bn loss in tax base.

The Tax Justice Research Bulletin

By Alex Cobham.

TJN (April 2015) – The Tax Justice Research Bulletin is a monthly series dedicated to tracking the latest developments in policy-relevant research on national and international tax. This is the fourth in our series.

This issue looks at ‘inefficient and unjust’ Greek tax policy since 1995; and at some striking results from the US on the employment impact of taxing different parts of the income distribution. Our Spotlight looks at the literature on taxing multinational companies, drawing on a handy study from the OECD’s BEPS (Base Erosion and Profit Shifting) project to tackle corporate tax dodging, and a new Banque de France working paper. Continue reading “The Tax Justice Research Bulletin 1(4)” →

Jersey’s foundations law is fit for money launderers: scrap it

Remind us: whose head is that on this Jersey stamp?

Foundations, like trusts and anonymous shell companies, are often used as secrecy vehicles for the purposes of money laundering, tax cheating, and much more. A while ago we pointed to an offshore promoter who had this to say about foundations:

“Trusts are . . . tools of the rich used to stay rich and deny people access to their funds. . . . Foundations were designed not by the rich but by the super rich to protect their assets insulating them from seizure and confiscation. These asset protection tools are so good they should be illegal but they are not illegal.”

Continue reading “Jersey’s foundations law is fit for money launderers: scrap it” →

Britain goes to the polls: the tax avoidance election

An interesting thing about the forthcoming UK election is that the subject of ‘tax avoidance’ has risen up the agenda so far and so fast. This guest blog briefly reviews the main parties’ manifestos, with a look out for their uses of the term.

[We should add, by the way, that ‘tax avoidance’ is a tricky term to use, and is often wrongly used, as David Quentin has reminded us. We prefer terms such as ‘tax cheating’ which sidestep tricky questions of legality.] Continue reading “Britain goes to the polls: the tax avoidance election” →

Why Gender Equality Requires More Tax Revenue

This is the third post this week on the topic of gender, and to celebrate our arrival in the modern world we have created a new topic page, where you will permanently be able to access news and analysis in this area.

Now we’re delighted to host a guest blog by Diane Elson, Chair of the UK Women’s Budget Group and Emeritus Professor, Department of Sociology, University of Essex. This is a preview article from a forthcoming edition of Tax Justice Focus, looking at gender issues.

Prof. Diane Elson

Gender Equality Requires More Tax Revenue

by Diane Elson

A government’s capacity to reduce gender inequality is determined in large part by the amount of revenue it raises in tax, and how tax payments are distributed. A high level of tax revenue, if raised progressively and spent wisely, enables governments to fund the services, social security and infrastructure that make it easier for women to undertake paid work and to provide jobs for women in the public sector that are often of better quality than those in the private sector. Continue reading “Why Gender Equality Requires More Tax Revenue” →

The Celtic Tiger: the Irish banking inquiry and a tale of two booms

The IFSC in Dublin’s Docklands

Cross-posted from Fools’ Gold:

One of our inaugural articles on this site was a post in March looking at the causes of the “Celtic Tiger” boom in Ireland. It contained a striking graph and a wealth of analysis suggesting strongly that what caused the boom was, above all, Ireland’s accession to the EU single market, rather than its supposedly ‘competitive’ corporate tax policies. After all, Ireland has been trying to be a tax haven since the 1950s, but it was only in the early 1990s that take-off began (also see this rollicking historical account of how Ireland became a corporate and financial tax haven, or offshore financial centre.) Continue reading “The Celtic Tiger: the Irish banking inquiry and a tale of two booms” →

Euro Trade unions spell out tax justice demands

This, from the European Trade Union Confederation (ETUC) dates from March 10th, but it remains fresh. It contains some excellent tax justice recommendations – including one surprising and interesting one, which we’ll highlight in bold text: Continue reading “Euro Trade unions spell out tax justice demands” →

Cayman implicated in fishy Saudi deal

[vc_row][vc_column][vc_column_text]From the Financial Times:

“Mr Foxley says he discovered gifts to Saudi military officials and illicit payments routed through the Cayman Islands.”

For background, the article begins:

“The UK government is fighting to keep secret details of how it handled allegedly corrupt transactions related to a contract to equip Saudi Arabia’s national guard.”

Continue reading “Cayman implicated in fishy Saudi deal” →

How do tax wars affect women?

Credit: Center for Economic and Social Rights

Cross-posted from Fools’ Gold:

From the Association for Women’s Rights in Development, a post related to a landmark meeting in Lima on tax justice and human rights:

“The current “race to the bottom” in which tax competition among developing countries takes place to attract corporate and foreign direct investment is having a negative impact on government budgets needed to finance the advancement of women’s rights.

We prefer the term ‘tax wars‘ instead of tax ‘competition’, but no matter: there is a clear and powerful argument here. The key point is not that budget cuts affect everyone, including women, but that women are disproportionately affected by tax policies that are substantially the fruit of tax wars. It is not just about how much revenue is raised, either: it is about how revenue is raised. As it notes:

Continue reading “How do tax wars affect women?” →

Is Singapore censoring critics of its tax haven status? Well, perhaps . . .

On April 30th we wrote a blog entitled Singapore spin: “we are not a tax haven.” They all say that. Then, this morning a news aggregator service provided us with this titillating tidbit:

So we clicked on the link, to find this: Continue reading “Is Singapore censoring critics of its tax haven status? Well, perhaps . . .” →

Two new reports challenge the OECD’s work on corporate tax cheating

The OECD, the club of rich countries that dominates international tax, is running a project known as Base Erosion and Profit Shifting (BEPS) which is supposed to fix some of the gaping holes in the international tax system. As we all know, transnational corporations (TNCs) are running rings around even the best-resourced tax authorities, and the OECD, responding to pressure from governments and civil society, are trying to do something about it.

An international network of tax researchers and academics has been set up, called the BEPS Monitoring Group (BMG), with the support of civil society groups, including TJN, and coordinated by Prof. Sol Picciotto, a Senior Adviser to TJN. The BMG aims to evaluate and respond to the proposals resulting from the BEPS process, as well as putting forward alternatives. It has just published two more reports, each looking at recent important proposals produced by the BEPS project:

Continue reading “Two new reports challenge the OECD’s work on corporate tax cheating” →

How do the UK parties’ promises on tax measure up on gender equality?

Ahead of the UK General Election due on May 7th, we are delighted to post a guest blog by Professor Sue Himmelweit of the Women’s Budget Group. The blog explains clearly just how important these issues are, and it also soon becomes clear that although this is a UK-focused blog, it has obvious implications for all countries.

Clearly, these issues also mesh very closely with our fast-growing focus on tax justice and human rights.

Prof. Susan Himmelweit

How do the UK parties’ promises on tax measure up on gender equality?

Guest blog by Prof. Susan Himmelweit

The Conservatives, Liberal Democrats and Labour have all three argued themselves into a big mess over tax. All have promised not the raise the main rates of income tax, National Insurance Contributions (NICs) and Value Added Tax (VAT). As a result, meeting their deficit reduction aims will be dependent on cuts in spending – but these they refuse to specify. This would be farcical if the consequences for those on low income, and women in particular, were not so severe.

Greater gender equality in incomes and life chances depends on having a tax system that raises sufficient revenue to pay for good quality public services and a comprehensive social security system. Continue reading “How do the UK parties’ promises on tax measure up on gender equality?” →

Avaaz in legal challenge to UK over Liechtenstein amnesty and HSBC scandal

From the Financial Times:

“The UK tax authority faces a potential judicial review over its handling of the evasion scandal involving HSBC’s Swiss subsidiary, it emerged on Thursday. Lawyers acting for the international campaign group Avaaz have sent HM Revenue & Customs a letter asking for details of its decision to allow hundreds of suspected tax evaders to make use of an amnesty, in the first step of the potential legal challenge.
. . .
The move comes amid widespread public anger overrevelations of tax evasion involving HSBC’s Geneva operations, which have led to a single prosecution.”

The Guardian has the letter, in full. Continue reading “Avaaz in legal challenge to UK over Liechtenstein amnesty and HSBC scandal” →

Lima: TJN director Christensen speech on tax justice and human rights

John Christensen

From John Christensen, TJN’s director, a speech about tax justice and human rights.

It begins like this:

“Why the tax justice movement should embrace human rights. And vice versa
The history of economic and social rights in most countries can be discovered in their tax codes. Tax is at the core of the social contract between citizens and state and between businesses and the state. When powerful and wealthy citizens and businesses engage in abusive tax behaviour, by cheating on taxes or shaping tax policies in their favour, they undermine the social contract and deprive fellow citizens of the resources they need fulfil their democratic obligations.
Without tax revenues states are unable to deliver on their democratic mandates and human rights obligations.
Tax policies reflect political power relationships. When tax policies favour the rich, they almost always harm the well-being of poor people. When taxes are not used to redistribute wealth, inequality inevitably worsens – as Piketty has shown – and social conditions deteriorate accordingly, often leading to human rights abuses.”

Continue reading “Lima: TJN director Christensen speech on tax justice and human rights” →

Why must tax treaties starve developing countries of revenue?

Hearson in Denmark. We’ll now ask his permission to use this photo.

Martin Hearson, who has just been at a parliamentary hearing in Denmark, asks a very good question about tax treaties and developing countries: why exactly is it necessary for them to insist on stiffing developing countries of tax revenue?

Continue reading “Why must tax treaties starve developing countries of revenue?” →

Singapore spin: “we are not a tax haven.” They all say that

[vc_row][vc_column][vc_column_text]From the Twittersphere, our Director of Research:

Continue reading “Singapore spin: “we are not a tax haven.” They all say that” →

BBC still using ideological evidence on top UK income taxes

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The voice of the UK establishment?

On the BBC’s flagship World at One programme on Wednesday (about 19:40 minutes in), there was a discussion between Ed Balls, the UK’s Shadow Chancellor (rough translation, finance minister hopeful for the opposition Labour Party) and the BBC’s Martha Kearney. Once again, we see the BBC continue to parrot the establishment line on taxing wealthy people, in the face of clear contrary evidence that has been presented directly and publicly to them. Kearney:

“The IFS [Institute for Fiscal Studies], the economic think tank, they looked at your plans to raise the top rate of income tax, and they say that you are only going to raise about £100 million, which as you know is pretty small beer when it comes to these kinds of budgets. Is this purely an ideological move?”

Now Kearney is right in that the IFS did indeed say this, itself citing a 2012 report from HM Revenue & Customs (HMRC) on the matter.

But we recently sent to the BBC John Thompson’s recent analysis of the revenue impacts of changing the top rate of income tax. It demonstrates in great detail why the £100 million estimate is so uncertain as to be next to useless. There also appears to have been selective use of data to achieve what looks like an ideologically-skewed result.

Yet the BBC persist in using the flawed analysis, without questioning the figure, despite clear evidence to the contrary that is in their possession. They aren’t alone, of course: far from it. But it is frustrating when evidence is presented then ignored, and the establishment position parroted without even a raised eyebrow.

Endnote: On a separate BBC-related matter, we believe that this blog from 2011, entitled Is the BBC scared of tax havens?, still asks an appropriate question. Nothing has happened since it was published to make us change our minds.

We’ll finish with a tweet that isn’t about the BBC per se, but is about one of its little tax haven offshoots, in the British tax haven of Jersey. Based on our experiences of this voice of the Jersey establishment, this tweet is hardly exaggerating.[/vc_column_text][vc_raw_js]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[/vc_raw_js][/vc_column][/vc_row]

Adam Smith and the British East India Company: a perspective on competitiveness

This blog was originally posted at Fools’ Gold, a project supported by TJN.

Adam Smith was an arch-critic of the regime-hopping strategies of the exclusive stockholding corporations, the forerunners of today’s multinational corporations. The British East India Company, granted a Royal Charter, was supposed to be acting on behalf of the sovereign to meet the country’s commercial objectives. The free hand given to the Company would presumably be couched, in modern parlance, as a ‘competitive’ strategy for Britain.

This post by Matthew Watson, showing how rude Smith was about these corporations’ strategies, is the latest in the Fools’ Gold series exploring the intellectual history of the modern ways people talk about the ‘competitiveness’ of national economies. Continue reading “Adam Smith and the British East India Company: a perspective on competitiveness” →

The Tax Justice Research Bulletin

Thank you!