Page 94 – Tax Justice Network

Manhattan real estate: a little tax haven in America

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” →

Quote of the day on the OECD’s tax project: “let’s hope nothing happens”

From the Financial Times, in a story about a conference on the OECD’s much-discussed BEPS project to reform international tax rules for transnational corporations:

“The gameplan is to be positive but hope as little as possible happens,” is how Paul Oosterhuis, a tax partner of Skadden Arps, the US law firm, described the attitude of US corporations to government proposals to amend its global arrangements.

Big Four firms officially sell out Hong Kong’s democracy movement

[vc_row][vc_column][vc_column_text]Updated with commentary from the Financial Times and Bloomberg: see below

CNBC is reporting:

“As a pro-democracy movement gains steam in Hong Kong, some worry the campaign could hurt the city’s competitiveness and rattle its financial market.”

One could unpack that short sentence and probably find five or ten nonsenses and fallacies coiled up inside it. So democracy is the enemy of ‘competitiveness,’ is it? In that case, what is the meaning or the point of ‘competitiveness,’ if it stands against the wishes of the people it is supposed to benefit? Pray do tell, CNBC. Continue reading “Big Four firms officially sell out Hong Kong’s democracy movement” →

The Swiss commodity black hole: a bizarre new government proposal

From the Berne Declaration backgrounder.
Click to enlarge

From the Berne Declaration and Swissaid:

“The Federal Council today announced its wish to close the Swiss gaps in transparency for the global commodity industry. But the entire commodities trading business may well be excluded from any future regulation.”

Continue reading “The Swiss commodity black hole: a bizarre new government proposal” →

IMF: tax havens cause poverty, particularly in developing countries

The IMF has a major new Policy Paper out entitled Spillovers in International Taxation, looking at the effects that one country’s tax rules and practices can have on others.

Of course this is a Staff Report and the IMF would never be so rude to some of its most powerful member states as to explicitly say what is in our headline – but that’s what we read between the lines. “Spillovers” in international tax are all about tax haven activity, particularly when those spillovers are deliberately crafted.

Now that we’ve read it, we conclude that this is a really important document. It tears apart much of the prevailing OECD tax consensus that has dominated international tax for the last century.

We are delighted to see that it convincingly takes the side of developing countries: not only taking sides in big current political fights (such as India vs. Vodafone) Continue reading “IMF: tax havens cause poverty, particularly in developing countries” →

The UK’s ‘open for business’ tax regime: investment falls

We were going to do a job on this report but Tax Research got there first, so we’ll cut and paste:

UK corporation tax policy fails to attract new business as Foreign Direct Investment falls
From the time that the current government came into power corporation tax reform has been one of their key objectives. The result has been a cut in the tax rate from 28 % to 21% now with 20% to follow, and a cut in the tax base, meaning that whole swathes of income have fallen out of the scope of the tax. Continue reading “The UK’s ‘open for business’ tax regime: investment falls” →

Why big time tax dodgers love Jean-Claude Juncker

On the plus side, he is quite the joker

From Private Eye, a commentary on Jean-Claude Juncker, and our quote of the day:

“Supporters of would-be European Commission president Jean-Claude Juncker should perhaps pause to examine the great man’s record of wreaking fiscal havoc across the continent.”
. . .
[under his tutelage] the Grand Duchy became the member of the economic club that pilfered from the club’s funds.

Our quote of the day in bold. Now read on.

The Impacts of Illicit Financial Flows on Peace and Security in Africa

From Alex Cobham of the Center for Global Development, a paper for the Tana High-Level Forum on Security in Africa 2014. It’s called, as our title suggests, The Impacts of Illicit Financial Flows on Peace and Security in Africa.

Published in April, it’s an important contribution to the literature on this large topic, and it teases out many of the subtleties in the arguments and analyses that very often get lumped together into one large topic. Continue reading “The Impacts of Illicit Financial Flows on Peace and Security in Africa” →

New report: developing countries want automatic information exchange

From the International Tax Review:

“The Tax Justice Network (TJN) has accused the OECD of not consulting developing countries about the design of the framework for Automatic Information Exchange (AIE), which the G20 has endorsed as the global model for information exchange.”

Our new report was prompted partly by comments from OECD tax boss Pascal Saint-Amans that

“Most (developing countries) are not yet ready and most of them don’t want it.”

So we conducted a survey to find out what developing countries genuinely thought. And the results clearly contradicted Saint-Amans’ pessimistic and strange view.

Read our in-depth report here.

The June 2014 Taxcast: Piketty, the World Cup, and capital flight

[vc_row][vc_column][vc_column_text]In the June 2014 Taxcast: the guillotine v progressive tax?

The Taxcast looks at Thomas Piketty’s book Capital in the 21st Century. Also: welcome to the temporary tax haven of World Cup Brazil; the EU Commission begins investigations into illegal state aid for tax havens; and are developing countries really not interested in tracking illicit outflows from their countries via transparency? Plus more scandal.

Produced by @Naomi_Fowler for the Tax Justice Network.

“it’s impossible for nation states and democracy to survive in an era of totally globalised markets where capital can quite simply evade and avoid taxes” John Christensen

Featuring: Journalist and Treasure Islands author Nick Shaxson, Economist and author of Capital in the 21st Century Thomas Piketty, Director of the Tax Justice Network John Christensen, head of the Bank of England Mark Carney, head of the IMF Christine Lagarde, MEP Martin Schulz.

Download from this link here: http://traffic.libsyn.com/taxcast/Taxcast_June_2014.mp3[/vc_column_text][vc_column_text]Remember the Tax Justice Network app is free and available on Android and Apple: just search for Tax Justice Network…

www.tackletaxhavens.com/taxcast

www.taxjustice.net/taxcast

Happy listening![/vc_column_text][/vc_column][/vc_row]

The alternative offshore awards: an idea whose time has come?

From the Financial Secrecy Media Monitor:

“Thanks to a promoted tweet from Jersey Finance comes news of the International Fund & Product Awards 2014, in which Jersey won the Best International Financial Centre award. Other winners were Standard Bank Offshore Group for Best International Banking Service and BNP Paribas – currently awaiting a billion dollar settlement for sanctions violations in the US – who were “highly commended” as Best International Fund Group.
Since the offshore industry seems to regularly give itself awards, perhaps an alternative annual prize ceremony could be organized, inspired by The Intruders and their award for “innovation in interest rate manipulation” given to Barclays in 2012. Continue reading “The alternative offshore awards: an idea whose time has come?” →

Campaign: Ireland’s tax model must stop hurting the global south

In 2012 ActionAid published a report estimating that a huge new tax loophole deliberately created by the UK government – which it seems is bringing in precious little in terms of jobs or tax revenues – is also likely to cost developing countries some £4 billion (US$6 billion) a year.

Ireland’s dodgy transfer pricing shenanigans – whose history we have written about at length – are likely to be costing similarly vast sums to countries around the world, rich and poor.

Now, from the Debt and Development Coalition Ireland:

“Debt and Development Coalition Ireland (DDCI) has called on the Minister for Finance Michael Noonan to act to ensure that Ireland’s tax model stops hurting countries of the Global South. Continue reading “Campaign: Ireland’s tax model must stop hurting the global south” →

Quote of the day: the central question for the finance industry to answer

From The Economist magazine, in an article entitled Counting the Cost of Finance, which looks at a new paper by Guillaume Bazot of the Paris School of Economics, which complements U.S.-based research on finance to look at the situation in Europe. The paper finds, unsurprisingly, that the GDP share of finance has increased continuously in Germany, France, the UK and Europe as a whole, and the unit cost of financial intermediation increased over the past 40 years.

One of the findings of recent research is that hedge funds, private equity companies and other active fund managers are, collectively worse than useless: their stock-picking skills are, on average, average: but the downside is that they will charge you huge fees. The new research is the latest to find that fees have been increasing, even as their overall performance has been getting no better.

Our quote of the day comes not from the paper but from The Economist:

“The central question that the finance industry needs to answer is this: why has its increased importance been associated with slower economic growth in the developed world and a greater number of asset bubbles?”

And this is a question that has been relevant for years before the Global Financial Crisis emerged. One more for the fast-growing Finance Curse archive.

Linking Finance to Human Rights: the video

From Center of Concern, a video that fits well with our tax justice and human rights programme.

As they note:

“Only through financial reform can human rights be sustained. The Center of Concern provides this video for your use in classes, meetings, and other community organizing opportunities to educate viewers regarding the need for financial policy makers to be held accountable to those in marginalized situations and poverty. The brief video stimulates new ways of thinking about equality and social justice and its inextricable linkage to financial systems. The program recommends actions that each of us can and should take to address changes in local and global financial systems to promote and sustain equality and human dignity throughout society.”

Life Cycles: the 18,000 mile bike ride

In 2009 we hosted a guest blog by Julian Sayarer, who was setting off on a stunningly ambitious bike ride half way across the world, on behalf of a few organisations including TJN. He said at the time:

“This ride is not for charity, with it I hope to raise an awareness rather than funds. These organisations work to promote a healthier and fairer society, but differ from many charities in that they do not aim to support any obvious victim, rather, their work looks to better the society that we all inhabit together. Without the sentimental impact enjoyed by other charitable causes, much of their campaigning and hard work risks going unnoticed.” Continue reading “Life Cycles: the 18,000 mile bike ride” →

Army of angels needed: a Rabbi’s view on tax dodging

Rabbi Menachem Creditor

From the Daily Journal, an article by Rabbi Menachem Creditor in the U.S.:

“I recently returned from Washington, D.C., where I joined the interfaith, bipartisan anti-poverty group Jubilee USA and other faith leaders and small-business owners from across the country to encourage our elected officials to reform the tax system and protect the most vulnerable among us. Continue reading “Army of angels needed: a Rabbi’s view on tax dodging” →

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” →

Thank you!