From Dereje Alemayehu, Chair of the Coordinating Committee of the Global Alliance for Tax Justice (the campaign coordination wing of the tax justice movement)
Teresa Marshall
Dear Friends
I am delighted to announce that TERESA MARSHALL will be joining the Global Alliance for Tax Justice (GATJ) as the campaign and communications coordinator, beginning in August 2014. Continue reading “Global Alliance for Tax Justice appoints campaigns and communications coordinator”
The following guest blog was written by Renaud Fossard [1]
The idea of ??a political space in international tax issue discussions in the framework of the United Nations is still being blocked by the OECD. Though not much interest has been seen from developing countries either, its implementation is crucial. Continue reading “OECD continues to stand in the way of global tax reforms”
For decades Western countries have peddled a fairy tale about Africa’s plight. The tale spins a homely story of how the West provides development aid to assist African nations overcome their own shortcomings.
The tale is, of course, a vicious and mendacious nonsense.
As this new report from Health Poverty Action (which lists TJN as a co-author) details, Western countries have used aid to Africa as a smokescreen to hide the sustained looting of the Continent, which loses nearly US$60 billion a year through tax evasion, climate change mitigation, and the flight of profits of transnational companies.
Those who still believe in fairy tales should watch the following (and also read our earlier study of Africa’s Bane, and for a fuller analysis read Léonce Ndikumana and James Boyce’s excellent book Africa’s Odious Debts).
From The World Weekly:
with kind permission from The World Weekly
City University London, Northampton Square, EC1V 0HB
4 November 2014 – 7 November 2014
The Tax Justice Network and the Centre of Investigative Journalism have announced the dates for the fourth Illicit Finance Journalism Programme four day training course at City University London. Continue reading “4th Illicit Finance Journalism Programme – November 2014 Course”
We have previously blogged about the role played by the former Luxembourg prime minister in shaping the rise of tax haven Luxembourg. Europe now faces the prospect that he will be elected the next president of the European Commission this coming week. If this happens, those politicians who vote for Juncker will be directly contributing to the re-emergence of extremist politics. Continue reading “Jean-Claude Juncker and the rise of extremism”
World famous children’s author Allan Ahlberg has rejected a lifetime achievement award because it is sponsored by the tax-abusing retailer Amazon.
Ahlberg, whose many books include The Children Who Smelled a Rat, was due to receive his award at the Booktrust Best Book Awards ceremony last week.
Writing to the Bookseller, he explained that he declined the award on principle because of Amazon’s abusive tax arrangements.
As Ahlberg comments: “Tax, fairly applied to us all, is a good thing. It pays for schools, hospitals – libraries! When companies like Amazon cheat – paying 0.1% on billions, pretending it is earning money not in the UK, but in Luxembourg – that’s a bad thing. We should surely, at the very least, say that it is bad and on no account give it any support or, by association, respectability.”
Some artists get it: others don’t.
Josh Kornbluth
We at TJN hear endless bleating – mainly from tax abusers and their pet news outlets – about the horrors of tax. We certainly don’t often hear it FOR tax. Continue reading “Love and Taxes – the live show and forthcoming major motion picture”
The Laffer Curve. With thanks to www.and-smith.com
From Citizens for Tax Justice in the U.S.:
“It is a truism in Washington that being wrong does not preclude one from wielding influence. There are, however, some pundits who are so egregiously wrong that it boggles the mind to find policymakers taking their advice.
Art Laffer is one of these pundits.
Laffer, an economist most famous for developing consequential fiscal policy on the back of cocktail napkins, is the father of supply-side economics. If you’re unfamiliar with the term, it basically means that cutting taxes for the wealthy will create a rising economic tide that lifts all boats. Three decades of empirical research says this notion is false.
And yet here is Art Laffer, barnstorming the country to spread the gospel of tax cuts to red-state governors, with predictably disastrous results. Not content to have started a bender of deficit spending and ill-advised tax cuts during the Reagan years, Laffer and his associates have turned their sights on state budgets. Recent news from the states that have fallen for their shenanigans tell the tale.”
Now read on.
From U.S. tax expert Ed Kleinbard, and his forthcoming book We are Better Than This (p159):
“There is no meaning to the growth effects of taxes as such, only to fiscal policy taken as a whole.”
It is another way of explaining that taxes are not a cost to an economy: they are a transfer within it.
Kleinbard is alluding to the myriad ‘independent’ studies out there that seek to attribute all sorts of ‘deadweight’ costs to taxation, without taking into account the other side of the ledger: those often productive things that taxes are spent on. Huge sections of the academic literature on this topic are effectively without merit.
Nigeria’s Bonny Terminal: spot the insiders and the outsiders
We’ve written plenty about the similarities between a ‘resource curse‘ afflicting mineral-rich countries in Africa and elsewhere and what we have termed a ‘finance curse‘ afflicting economies that are overly dependent on the financial sector. Britain is a case in point, with offshore activity a substantial part of the sector.
Now Vince Cable, the U.K.’s business secretary, has made another explicit comparison which resonates with our analysis. As the Wall St. Journal reports:
“Business Secretary Vince Cable said the British banking system outside the City of London finance district is “primitive” and similar to Africa, where he used to travel to visit oil and gas refineries owned by Royal Dutch Shell, his former employer.
Speaking to lawyers and bankers in a room overlooking the City of London, Mr. Cable said the contrast between the sophisticated technology of the finance district and the rest of the country’s banking system is extreme. He said it reminds him of the gulf between oil and gas installations in Africa and the rest of the continent.”
And he added:
“in Nigeria, “you could go to these world-class liquefied natural gas institutions, you know, the best technology in the world, and then there would be a barbed-wire fence around it and outside you would have Africa.”
Today’s blogger has spent much time in and around these oil-fueled African ‘pampered paradises’ – especially in Angola: read this New York Times article describing just how stark (and, to be honest, bizarre) the divide can be in the northern oil-rich Angolan enclave of Cabinda.
Leaving aside the unfortunate connotations of the word ‘primitive’, we would wholly agree with Cable. He has put his finger on one important aspect of the Finance Curse: a heavily protected and subsidised sector failing to link appropriately to the domestic economy and serving more as an ‘offshore island’ producing some jobs directly, but also wreaking a range of other harms elsewhere.
Tax practitioner Noel Hodson has just issued the following notes to editors about the term ‘tax avoidance’:
Most media, even the BBC, persist in quoting notorious professional tax-planners, embedded in the establishment, that “tax avoidance is completely legal”. My 50+ years of practical, hands-on case work tells me that elaborate tax schemes, particularly via the 74 tax-havens are illegal in all OECD and most other tax regions – including the UK. Continue reading “Tax avoidance: a note to editors”
Krishen Mehta, a Senior Adviser to TJN, has written a short document with ten pointers offering ways that developing countries can take control over their tax destinies. We reproduce the introduction of his article below: please click on the full article for the ten points. We hope to produce more of these in due course, in collaboration with other experts.
How Developing Countries can take Control of their own Tax Destinies
By Krishen Mehta
July, 2014 Continue reading “How developing countries can take control over their tax destinies”
Next week we expect Jean-Claude Juncker, the former long-standing prime minister of Luxembourg, to be nominated to the powerful role of President of the European Commission. The man who for many years defended one of Europe’s nastiest and biggest secrecy jurisdictions (or tax havens) now faces an important question.
Will he continue discreetly to find ways to represent the interests of Luxembourg against the ordinary citizens of Europe? Time will tell. For now, the Financial Times investigates a recent European investigation into the tax arrangements of various large multinationals Continue reading “How will Juncker, tax haven candidate, handle his conflicts of interest?”
The state boundary runs through Kansas City
Last year the St. Louis Post-Despatch published an editorial entitled Missouri Senate declares class war against citizens, looking at tax subsidies being showered on businesses in an effort to lure them away from neighbouring Kansas – which, in turn, has been showering subsidies on businesses to cross the line to its side.
There are probably fewer places in the world where this senseless race to the bottom is most evident. The process is widely known as tax competition but we prefer to borrow from the Brazilian term Guerra Fiscal (tax war, or tax wars) – partly because it is the more economically literate term, and partly because it conveys the harm more accurately. Continue reading “Kansas/Missouri: local ceasefire in U.S. tax border war?”
From a book called The Opium Wars, one of Britain’s less honourable (to put it mildly) historical escapades, a statement that was prompted by moves in Britain towards stopping the opium trade:
“Her Majesty’s government should do nothing to place in peril our opium revenues. As for preventing the manufacturing of opium, and the sale of it in China, that is far beyond your power.”
– Lord Ellenborough, 1843
Do those arguments sound familiar?
Doubtless they were wielded in the name of ‘competitiveness,’ or its equivalent at the time. Around the time, some ten percent of Britain’s revenues came from the opium trade – and, needless to say, the British government capitulated to the opium traffickers.
As reported by Tax-News, IMF Managing Director Christine Lagarde said:
“There would be more revenue for all if countries resisted the temptation to compete with each other on taxes to attract business. By definition, a race to the bottom leaves everybody at the bottom.”
Interestingly enough, she was speaking in the Caribbean, which contains more than its fair share of tax havens. See more on the race to the bottom on our Tax Wars page, here.
Richard Murphy, who pioneered the concept of Country by Country reporting, has produced an important analysis of the data revealed in one of the first such published reports, from UK-based Barclays bank.
Among many other things, he says:
“This analysis suggests that Barclays is massively under-declaring profit in the UK at cost to all of us. I estimate that the loss to the UK could easily exceed £150 million.” Continue reading “Barclays sheds some light on its financial affairs, country by country”
TJN is a signatory to the following letter, and this press release:
Press Release: CSOs protest as European Commission hires opponent of corporate transparency to assess corporate transparency
After strongly opposing any publication of data from corporate country by country reporting, PricewaterhouseCoopers (PwC) has been hired by the European Commission to do an impact assessment of public country by country reporting for banks in the EU. Continue reading “Press Release: European Commission hires transparency opponent to assess corporate transparency”
From The Equality Trust, in a report on the United Kingdom:
“Public support for a more progressive tax system is high. Over eight in ten (82%) believe that households in the highest 10% income group should pay a greater proportion of their income in tax than those in the bottom 10%. An even greater majority (96%) would like the tax system to be more progressive than it currently is.”
Ninety six percent: a number to make your eyes water. Read the report, or read this summary in The Guardian.
See also this recent report from the Equality Trust looking at top tax rates in the UK. They find, among other things, that
“There is little or no relationship between tax rates and economic growth. There is only a proven relationship in the case of very high taxes of above 80%”
As we have noted before, many times. And it’s hardly surprising that this is so, given that tax is not a cost to an economy but a transfer within it, from one productive sector to another.
From Prem Sikka our quote of the day comes from an article entitled Big accountancy firms have a human rights problem:
“In many other organisations such subversion of the human rights would be considered to be a badge of shame. At major accountancy firms it is increasingly considered to be a sign of business acumen.”
This follows news that the Big Four firms of global accountants clubbed together officially to publish an advertisement denouncing the Hong Kong pro-democracy movement in the name of competitiveness. We are delighted to see now that the South China Morning Post is reporting that Big Four employees have now taken out an advertisement of their own disowning the advertisement. Continue reading “Quote of the day: big accountancy firms have a human rights problem”
Image: Javier Gil
From New York Magazine, a long article about the high-end New York property market, echoing recent stories (such as this one) about One Hyde Park and the British tax haven.
“Those with less reflexively hostile reactions to foreign buying competition might still wonder: Who are these people? An entire industry of brokers, lawyers, and tight-lipped advisers exists largely to keep anyone from discovering the answer. This is because, while New York real estate has significant drawbacks as an asset—it’s illiquid and costly to manage—it has a major selling point in its relative opacity. With a little creative corporate structuring, the ownership of a New York property can be made as untraceable as a numbered bank account. And that makes the city an island haven for those who want to stash cash in an increasingly monitored global financial system. Continue reading “Manhattan real estate: a little tax haven in America”