Quote of the day: Swiss Franc

Swatch

Switzerland’s in for some colourful times now.

The value of the Swiss Franc exploded upwards this morning, after the Swiss National Bank (SNB) removed its fairly longstanding 1:1.2 peg against the Euro (that is, 1.2 Swiss Francs per Euro.) That is an astonishing currency move. Our quote of the day comes from Nicolas Hayek, the chief executive of watchmaker Swatch, via Reuters:

“Words fail me! Today’s SNB action is a tsunami; for the export industry and for tourism, and finally for the entire country.”

Why is this a tax justice issue? Because it underscores one of the central points we make in our Finance Curse analysis. There is an inherent conflict between finance and industry. Inflows of capital have the effect of make everything relatively more expensive, either through changes in the exchange rate, or inflation, or both. In the case of oil-producing countries, this phenomenon is known as the Dutch Disease. But it’s the same with over-inflated financial sectors.

Switzerland had sought to protect its non-financial industries by printing Swiss Francs and selling them to buy foreign currency, in order to keep the value of the Franc down and protect its currency peg against the Euro. But after having built up hundreds of billions of dollars’ worth of foreign exchange reserves, it clearly decided enough was enough and released the peg. Swatchmakers and a host of other industrialists (and others, such as farmers) will feel the pain of a more costly manufacturing base.

More on the Finance Curse here.

Report: every U.S. state taxes its poorest at much higher rates than top 1%

ITEP Who PaysFrom the U.S. Institute on Taxation and Economic Policy (ITEP), the 5th edition of Who Pays, its signature report that examines tax systems in all 50 states and the District of Columbia. Now get the highlights:

Continue reading “Report: every U.S. state taxes its poorest at much higher rates than top 1%” →

Quote of the day: offices of UK tax tribunal owned offshore

Bedford Square

The offices of the UK tax tribunal, owned offshore. Courtesy of Google Maps

The quote of the day is from the British investigative and satirical magazine Private Eye:

“Buildings occupied by the Ministry of Justice, including Britain’s tax tribunal, are – almost unbelievably – owned offshore in a Mediterranean tax haven, while the attorney-general works from a London office that is owned in a tax haven in the British West Indies, the Eye has discovered.”

Continue reading “Quote of the day: offices of UK tax tribunal owned offshore” →

Slovak govt. to enact new anti-shell company law after scandal

Flag_of_Slovakia.svgA guest blog by Miroslav Beblavy, Member of Slovak Parliament for the opposition party Sie?, (who has been involved in drafting the legislation) and Silvia Hudackova, assistant to Miroslav Beblavy.

Slovak government committed to enact new anti-shell law after the healthcare procurement scandal

The legislative interest in shell companies in Slovakia increased in November because of a scandal involving the purchase of a greatly overpriced CT scanner in the public procurement in Pieš?any hospital, which was won by a shell company. Continue reading “Slovak govt. to enact new anti-shell company law after scandal” →

Credit Suisse’s U.S. public hearing on Wednesday

credit-suisse-logo-370x229A guest blog by Heather Lowe of Global Financial Integrity, with thanks:

As many of you know, Credit Suisse AG (CSAG) was convicted in November of U.S. felony charges relating to assisting (and soliciting) tax evasion by U.S. taxpayers.  A consequence of this felony conviction is that, according to Department of Labor (DOL) regulations, CSAG and its affiliates lose their privileged status as ‘qualified professional asset managers’ (QPAMs).  Essentially, this means that CSAG and its affiliates would no longer be able to engage in higher-risk transactions with the pension fund money that they manage.  Continue reading “Credit Suisse’s U.S. public hearing on Wednesday” →

Oil and mining contract transparency: is a tipping point approaching?

Oil concessions

Some oil concessions yesterday

From Open Oil:

“a push towards universality – all contracts and all concessions in public domain – is only what is due to the public. Who are, after all, the legal owners of sub-soil resources in every country in the world bar one. What management of a company would be taken seriously if they published a partial profit-and-loss, or balance sheets from only some departments?”

We would not disagree. Oil contracts, as with many minerals contracts, have generally been kept secret. Every now and then, one popped into, say, a journalist’s hands, but in general terms they have been kept under wraps, usually for reasons of “commercial confidentiality”.

But transparency is beginning to emerge. Continue reading “Oil and mining contract transparency: is a tipping point approaching?” →

Event: Tax Justice to Promote Social Justice, Vienna, 24 Feb

The Global Alliance For Tax Justice (GATJ) and the European Association of Development Research and Training Institutes (EADI) are pleased to invite you to join us for an important conference to build closer cooperation between professional researchers and tax justice activists:

Tax Justice to Promote Social Justice

Research on Taxes for Development

Tuesday 24 February 2015, 9.00 to 18.00

University of Vienna, Austria

Hosted by the Vienna Institute for International Dialogue and Cooperation (VIDC) and the Department of Development Studies (IE) – University of Vienna 

Continue reading “Event: Tax Justice to Promote Social Justice, Vienna, 24 Feb” →

Dynamic scoring: “deception, tax fraud, sleight of hand”

We’ve just posted a brief reminder of the economic voodoo peddled by a certain well known U.S. economist, Arthur Laffer. Now we bring you a second, related example of economic prestidigitation: a devious and increasingly popular wheeze known as “dynamic scoring.” It emerged in the United States but has been seeping into the United Kingdom and other countries.

The basic idea is, in essence, that when you put together a tax policy plan you need to consider its “dynamic” effects on the economy. If you expect your plan to make the economy grow faster than it would otherwise have done, then tax revenues will presumably be higher than they would otherwise have been. And that feedback needs to be taken into account in the ‘dynamic’ model.

It all sounds so reasonable, right?

Wrong. And it’s so horribly wrong that we’re going to spend a bit of time discussing how and why it’s wrong.

We at TJN are a non-partisan organisation but even so we’re going to quote from this short, partisan video from U.S. Congressman Lloyd Doggett, because he lays it out in such clear terms. Via e-mail, a press release from Doggett notes: Continue reading “Dynamic scoring: “deception, tax fraud, sleight of hand”” →

Did Arthur Laffer kill Kansas?

Art Laffer. The Messiah.

Art Laffer. The Messiah.

For over three decades politics in some countries has been overshadowed by the theological views of a quirky U.S. economist called Arthur Laffer, whose belief system centres on the notion that if you cut personal and corporate income taxes, tax revenues will rise. The idea is that wealthy people will work harder, invest more, employ more labour, and as a result more taxes will flood in.  Continue reading “Did Arthur Laffer kill Kansas?” →

Financing for Whose Development? How Official Development Finance Institutions support Tax Havens

This is an extract from an article by Eurodad’s Mathieu Vervynckt, in which he discusses the Third UN Conference on Financing for Development (FfD), set to take place in Addis Ababa next year as a crucial opportunity to discuss both the use of scarce public resources to leverage private sector finance, and the fight against international tax avoidance and evasion. Continue reading “Financing for Whose Development? How Official Development Finance Institutions support Tax Havens” →

Poorer Countries Lose More from Corporate Profit-Shifting

By Alex Cobham. This post was originally published by the Center for Global Development, where I was a research fellow until leaving this month to join TJN as Director of Research. Reproduced, with CGD’s permission.

Poorer Countries Lose More from Corporate Profit-Shifting

Lower-income countries in general suffer the greatest shrinkage of the tax base as a result of corporate profit-shifting. In a new working paper, Simon Loretz and I find that the multinational tax bases of some lower-income countries could even be double their current size. We also find that some of the ‘tax haven’ jurisdictions that benefit most have received surprisingly little attention. Any guesses? Continue reading “Poorer Countries Lose More from Corporate Profit-Shifting” →

George Monbiot and Russell Brand: TJN and Uncut’s role as mythbusters

One of the biggest myths of the modern era is the self-attribution fallacy: I became rich thanks to my extraordinary personal qualities and hard work, while the poor are poor because they’re drunk and lazy. Comedian Russell Brand and writer George Monbiot discuss this myth in the following extract from Brand’s Trews series.

The Price We Pay wins top Canadian film documentary

Coming soon to a screen near you

Coming soon to a screen near you

STOP PRESS: The Vancouver Film Critics Circle award winners for 2014:

 

Dublin event: The Human Rights Impact of Tax and Fiscal Policy

Christian AidHurry, while tickets last. One to add to our Events Page, and to our Tax Justice and Human Rights page. From Christian Aid:

The Human Rights Impact of Tax and Fiscal Policy

Continue reading “Dublin event: The Human Rights Impact of Tax and Fiscal Policy” →

Please contribute to the update of The End of Poverty?

Films play an important part in shaping new understandings about the structural causes of poverty and inequality.

In 2007 we participated in the making of The End Of Poverty?, which has enjoyed huge critical success and has been watched by millions of people around the world. The makers of The End of Poverty? – Philippe Diaz and Beth Portello at Cinema Libre Films in California, are inviting activists to donate towards the costs of making an update, which will include a strong focus on tax justice related issues.

Please take this opportunity to donate to this project here

 

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Season’s Greetings from TJN

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Developing countries and corporate tax – ten ways forward

TJN logoOur last main blog before Christmas concerns developing countries. We are proud to publish an article by Krishen Mehta, one of our Senior Advisers, entitled The OECD’s BEPS Process and Developing Countries – a way forward.  This blog summarises the article, which is about how developing countries can protect themselves from corporate tax abuses, even while they wait for the OECD, a club of rich countries, to try and design new tax rules that they hope might help protect them. Continue reading “Developing countries and corporate tax – ten ways forward” →

Mafia, #LuxLeaks and more scandal in the Tax Justice Network December podcast

In the December 2014 Taxcast: how Mafia is corrupting democracy at the heart of Europe in Italy’s capital city of Rome. Also: the #LuxLeaks whistleblower is arrested and makes his first public statements on why he did it, the UK Chancellor’s new ‘Google Tax’, is the EU Commission President Jean Claude Juncker backing away from making a register of real owners of companies and trusts public? And more scandal and unique analysis. Continue reading “Mafia, #LuxLeaks and more scandal in the Tax Justice Network December podcast” →

Advancing Tax Justice through Human Rights: International Strategy Meeting, April 2015

Mark your calendar for a groundbreaking International Strategy Meeting

Advancing Tax Justice through Human Rights

Co-organized by the Center for Economic and Social Rights, Global Alliance for Tax Justice, LatinDADD, Oxfam, Red de Justicia Fiscal en América Latina y el Caribe and Tax Justice Network Continue reading “Advancing Tax Justice through Human Rights: International Strategy Meeting, April 2015” →

Eurodad: financial outflows from developing countries more than double the inflows

EurodadFrom Eurodad:

The State of Finance for Developing Countries, 2014

This report provides the most comprehensive review of the quantity of different financing sources available to developing countries, and how they have changed over the past decade.  Continue reading “Eurodad: financial outflows from developing countries more than double the inflows” →

On the Capture of Luxembourg by Big Accountancy Firms

Antoine Deltour

Antoine Deltour, whistleblower, now being attacked by the tax haven industry via Luxembourg’s courts. Scroll down to sign his petition. Photo: Libération

UPDATE:  TJN is among a host of signatories to a letter (published here) calling on the Luxembourg authorities to refrain from prosecuting whistleblower Antoine Deltour.  In the letter we note that even the Luxembourg government has publicly recognised that the information revealed by M Deltour has uncovered market information crucial to the proper functioning of the European Union’s internal market, and its release has served the public interest.  Read our letter here, and the accompanying Guardian article here.

From Reuters, in the wake of the sprawling #Luxleaks scandal, and the attacks on the PWC whistleblower Antoine Deltour, a fascinating story about the power of large accountancy firms in Luxembourg, a quote, highlighted in bold:

“So close are some to the new government that Ernst & Young’s local boss helped negotiate the coalition deal that saw Xavier Bettel succeed Juncker as prime minister a year ago.
. . .
Alain Kinsch of E&Y told a local newspaper last year while he was acting as a coalition negotiator for Bettel’s liberal party that others from the Big Four accounting firms had no need to play such a public political role to have access to ministers:

“If I really wanted to wield any influence, trust me, I wouldn’t have chosen this route. I would have kept behind the scenes and would have been able to wield influence differently.”

“Trust me.” Continue reading “On the Capture of Luxembourg by Big Accountancy Firms” →

TJN makes Global Top 50 – again!

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Every picture tells a story, and this picture reflects the fact that TJN remains an agenda setter at national, regional and global levels. Continue reading “TJN makes Global Top 50 – again!” →