Page 93 – Tax Justice Network

Quote of the day: coddling internet infants with tax subsidies

From Citizens for Tax Justice in the U.S.

Dear Congress: The Internet Never Was an Infant Industry That Needed Coddling

That’s our quote of the day, from their headline. There’s simply no reason to shovel subsidies at this fabulously wealthy (and increasingly politically powerful) sector. Yet that’s what’s happening in the U.S., on the assertion that the internet is a fragile ‘infant’ industry that is going to cry if it doesn’t get showered by subsidies paid for by other people elsewhere. Now some U.S. congresspeople http://pharmacy-no-rx.net want to make this feeding trough a permanent fixture. Continue reading “Quote of the day: coddling internet infants with tax subsidies” →

Howard Davies: the banks that ate the economy

What the Finance Curse looks like, in practice

Update: another piece of research here.

From Project Syndicate, an article with an identical headline to ours by Howard Davies, former Chairman of the UK’s Financial Services Authority (FSA).

The article focuses on what the iconoclastic economist Andrew Haldane of the Bank of England has described as the financial sector’s

“ability to both invigorate and incapacitate large parts of the non-financial economy.”

Its an ability that we have described as a Finance Curse, analogous though not identical to the well-understood “Resource Curse” that afflicts mineral-rich countries, where billions or trillions of dollars wheeling into and through an economy from the dominant sector don’t seem to translate into better living standards for ordinary folk. The dominant sector, far from being a goose that lays the golden eggs that everyone imagines it to be, turns out to be a cuckoo in the nest.

It’s quite uncanny how close Davies’ analysis is to our way of viewing all this – all he’s missing, really, is to make the link with the Resource Curse. It’s one of those things where once you see it, it’s so obviously right.

Read on: it’s a really good article.

hat tip: dan Hind.

Quote of the day: CEO narcissism and tax avoidance

Caravaggio’s Narcissus. And the artist hadn’t even met a modern corporate CEO

From a new paper entitled CEO narcissism and tax policies (via TaxProf):

“We document a positive association between CEO narcissism and various measures of corporate tax avoidance and tax risk.”

We haven’t read the paper yet but the correlation, which may simply be a matter of amusement for some, is unlikely to be a spurious one.

Big Bills: how our central banks nurture money launderers and kleptocrats

The Swiss 1,000 Franc note: a deliberate criminal partnership

A question for our European readers. How many of you have ever spent or even seen a 500 Euro note?

No, neither have we.

Which is may seem odd, given that there are some 300 billion Euros’ worth of these things out there, in circulation.

Which raises the question: where are they all? Continue reading “Big Bills: how our central banks nurture money launderers and kleptocrats” →

London march: Join the new Tax Dodgers’ Alliance

The route of the march

From UK Uncut, a march planned for this Saturday (June 21):

Come and join the newly formed ‘Tax Dodgers Alliance’. Big businesses and the super wealthy are welcome. Bankers, lawyers, CEOs, new money, old money… What do we have in common? We’re stinking rich & we don’t want to share – our cash is offshore.
Come dressed as a tax dodger Continue reading “London march: Join the new Tax Dodgers’ Alliance” →

Unequal Britain: tax system is much less progressive than people believe

More evidence, if this was needed, that people can be fooled most of the time by the repetitive drip, drip feed of tax nonsense coming from much of the media, some parts of academia and think-tanks, and from far too many politicians. Continue reading “Unequal Britain: tax system is much less progressive than people believe” →

Islands (or how to play dirty and get away with it)

We are delighted to be associated with a new play by award-winning Caroline Horton called Islands (or how to play dirty and get away with it).

In Caroline’s words:

“Islands will be an illuminating, absurd and powerful new show about tax havens, little empires, enormous greed and the few who have it all – yes, your bit too.”

We’ve been working with Caroline and her team since 2012, and we know the play will shock many when it comes to the stage in London in January 2015. Continue reading “Islands (or how to play dirty and get away with it)” →

From The Namibian: an open letter to De Beers on transfer pricing

FROM TODAY’S EDITION

LETTERS

AS NAMIBIAN political activists, we are writing to you because we are greatly concerned about your transfer-pricing methods. We know that transfer-pricing occurs when two companies from the same multinational corporation trade with each other. Continue reading →

Insurance sector seeking to trick the OECD with giant secrecy loophole?

Update: with Gibraltar / Bermuda shenanigans.

Last February the OECD, which has been mandated to set global financial transparency standards, presented a major report on a new global standard for transparency and to fight the scourge of tax evasion. We broadly welcomed the project, but noted that it has many shortcomings.

The full details of those global standards are still being put together, including many potent and often secret interventions from powerful lobby groups. Well, Tax-News.com has just published some details of one of these interventions, this time by the insurance industry. Continue reading “Insurance sector seeking to trick the OECD with giant secrecy loophole?” →

Civil society letter to OECD on its corporate tax project

The OECD’s so-called Base Erosion and Profit Shifting (BEPS) project which aims to reform the hopelessly outdated international tax system, has been progressing, and TJN and others have been monitoring it.

Civil society organisations, including those coordinated through the Global Alliance for Tax Justice (GATJ), have agreed the text of a Letter to the OECD Committee on Fiscal Affairs (CFA). Versions of this letter have now been sent both directly to the CFA and through national organisations to national members of the Committee. Continue reading “Civil society letter to OECD on its corporate tax project” →

Cambridge University: the Chinese government connection

Wen Jiabao at Cambridge, 2009

In March we wrote a post entitled Ukraine’s dirty money: the Cambridge University connection, which highlighted the fact that a Ukrainian oligarch who had showered money on Cambridge university to promote a “Cambridge Ukrainian Studies” department had just been arrested in Vienna on an international arrest warrant at the request of the FBI.

Now Cambridge University has been caught with its pants down (and trouser pockets open) again. A quote in Britain’s Telegraph newspaper from an academic source summarises the story:

“It would seem that a foreign government appointed a professor of politics at Cambridge.” Continue reading “Cambridge University: the Chinese government connection” →

Euro Commission probes corporate tax arrangements of Apple, Starbucks and Fiat

From Europa.eu

“The European Commission has opened three in-depth investigations to examine whether decisions by tax authorities in Ireland, The Netherlands and Luxembourg with regard to the corporate income tax to be paid by Apple, Starbucks and Fiat Finance and Trade, respectively, comply with the EU rules on state aid.”

This will get interesting. In 2011, the European Court of Justice declared that tax exemptions especially designed for offshore companies are considered state aid, and it prohibited Gibraltar from enacting new offshore tax legislation. The ruling can be found here: it’s complex, but see especially points 104 to 107. (With thanks to Martina Neuwirth and Maaike van Diepen.)

Ireland is putting on the usual theatre of probity. Continue reading “Euro Commission probes corporate tax arrangements of Apple, Starbucks and Fiat” →

FIFA’s “obscene” tax abuses – part 2: the John Oliver version

We recently wrote a post entitled Brazilians will pay heavily for FIFA’s “obscene” tax abuses, which gained a fair bit of attention and once more put the spotlight once more on the monopolistic, rent-seeking world football governing body based in Zurich, Switzerland.

Now U.S.-based TV funnyman John Oliver has a superb investigation of these matters – and others.

Cringe, but enjoy it too. This may not be available in all regions, unfortunately. Continue reading “FIFA’s “obscene” tax abuses – part 2: the John Oliver version” →

Reuters report: the UK’s “new” corporate tax policies have failed

The Laffer Curve. With thanks to www.and-smith.com

That’s the impression you get from reading the latest story by Tom Bergin of Reuters, who has done a detailed and excellent exploration of the UK’s recent moves to become more of a tax haven for multinational corporations.

The harm inflicted on taxpayers elsewhere? Enormous. Just look at the effect on one single U.S. oil company’s tax bill, with an effective tax rate that has been slashed from 34.6% in 2008 to 3.3% in 2013.

The benefits for Britain? Peanuts. In job terms, in fact, it looks as if there have been net job losses for Britain. In tax terms, there has been almost nothing directly to show for it either. Continue reading “Reuters report: the UK’s “new” corporate tax policies have failed” →

How Seychelles became a paradise for dirty money and corruption

In 2012 Al Jazeera published a remarkable undercover television investigation into the Seychelles, where two African journalists posing as wealthy Zimbabweans were brazenly offered the sleaziest secrecy services. It’s a classic of offshore undercover investigation, and we at TJN have referenced it several times.

Now the International Consortium of Investigative Journalists (ICIJ) has done its own in-depth investigation, referencing the Al-Jazeera piece and then delving deeper into the Seychelles and its murky offshore sector. We paste a section below, but we’d urge you to read the whole thing.

The ICIJ piece notes: Continue reading “How Seychelles became a paradise for dirty money and corruption” →

Quote of the day: on corporate tax policy making

From Martin Hearson:

“What my clients are concerned about,” said my friend, “is political interference in corporate tax policymaking.” I found this quite startling. Is it possible that businesses consider corporate tax policy to be a matter for private negotiations between them and the government, rather than the subject of public (and even parliamentary) debate as part of the government’s budgeting process?

This is a question of profound and fundamental importance, and the nonchalance with which it is seemingly uttered is testament to the remarkable degree of ‘political capture‘ that large multinational corporations have achieved in the United Kingdom, a country with a large and boisterous democracy and a (fairly) effective press. For an example of the egregious anti-democratic processes at play, you only need to look at this brief summary entitled The Principles of Tax Policy at the UK parliament. Hearson continues:

“The UK’s corporate tax regime has been dramatically overhauled over the last ten years, with a plummeting corporation tax rate and vast swathes of the multinational tax base exempted. This is a serious structural change in our tax system, yet there’s been barely a peep about it in public debate. And we continue to sign tax treaties, with only a cursory discussion in parliament each time.

The more we can bring democratic debate into these issues – not just in rich countries like the UK but in developing countries too – the more the veil of secrecy can be lifted, and the more accountable and representative the tax policy making will be.

Tax dodging and the birth of the British Empire

As we’ve documented, the United Kingdom plays a central – if not the central – role in the modern global system of offshore tax havens, or secrecy jurisdictions. Now here’s a post from ActionAid, looking at (yet) another aspect of all this. Cross-posted, with permission.

Tax dodging and the birth of Empire
by Ruth Kelly, ActionAid.
I’ve always thought that the East India Company might tell us something about how the global tax system works. Watching Dan Snow’s recent BBC programmes, The Birth of Empire, made me realise that the Company had an even more active role in the tax system than I had imagined. Continue reading “Tax dodging and the birth of the British Empire” →

Tax, corporate responsibility and human rights: new paper

From the Boston University Law Review, a paper by Jasmine Fisher entitled Fairer Shores: tax havens, tax avoidance and corporate social responsibility. Its introduction contains this:

“The doctrine of corporate social responsibility provides a logical rationale for multinational corporations to adopt antiavoidance practices, in that the harm caused by tax avoidance outweighs any financial benefit that accrues from these practices.” Continue reading “Tax, corporate responsibility and human rights: new paper” →

Alliance Boots: tax cheats

We didn’t do anything illegal!

BOOTS AVOIDING TAXES RISKS PUBLIC HEALTH

JOIN WAR ON WANT, UNITE, MEDACT AND CHANGE TO WIN TO PROTEST BOOTS’ TAX AVOIDANCE AND ITS IMPACTS ON PUBLIC HEALTH Continue reading “Alliance Boots: tax cheats” →

Tax Justice Focus – the Human Rights edition

The latest edition of our newsletter Tax Justice Focus focuses on the theme of tax justice and human rights, perhaps the fastest-growing area of interest in the rapidly expanding global tax justice community.

Click here for the full edition of Tax Justice Focus, the Human Rights edition.

You can also access the individual articles below.

Continue reading “Tax Justice Focus – the Human Rights edition” →

The Price of Offshore Revisited – new material

We published a long rebuttal yesterday to an attack on TJN by two U.S. academics, supported by the lobbying arm of the British tax haven of Jersey, which has publicised it at a conference in London today. The attack focused quite heavily on our 2012 report The Price of Offshore Revisited, which estimated that there is some $21-32 trillion sitting offshore, substantially in conditions of secrecy and low or zero http://www.eta-i.org/provigil.html taxation.

In our rebuttal to the academics we promised to publish a second document today, backing the Price of Offshore Revisited with additional sourcing and information, and further explaining why we think our 2012 estimates were conservative.

This second document, containing a wealth of data, sources and analysis, is now available.

To read it, please click here.

We will post this permanently on our reports page. Feedback, as always, is most welcome.

Tax haven of Jersey to attack TJN with funded study. We respond.

June 6: updated with details of book project.

Jersey Finance, the lobbying arm of the finance industry in the offshore tax haven of Jersey, tomorrow will host a media event in London attacking TJN and our estimates for the size of the offshore industry, and publicising a supposedly independent academic paper, partly funded by Jersey Finance, which also focuses heavily on TJN and particularly on our estimates produced in our 2012 study Price of Offshore, Revisited.

We have produced a document that responds in detail to the claims and allegations made by Jersey Finance and by their two academics.

Please click here.

Our response is long and detailed, but for those with the time and energy, we feel it will be well worth it. All this adds clarity and exposure to these crucial issues. For a new (June 2014) analysis backing up the Price of Offshore Revisited with additional data, sources and analysis, please click here.

We paste a short section of the introduction to our report, below. Continue reading “Tax haven of Jersey to attack TJN with funded study. We respond.” →

Tax dodging and the birth of Empire

Thank you!