Page 96 – Tax Justice Network

Quote of the day: Elizabeth Warren

Elizabeth Warren
via Wikimedia Commons

Regarding corporations paying their way, the trailblazing U.S. senator Elizabeth Warren:

You built a factory out there? Good for you. But I want to be clear. You moved your goods to market on the roads the rest of us paid for. You hired workers the rest of us paid to educate. You were safe in your factory because of police-forces and fire-forces that the rest of us paid for. You didn’t have to worry that marauding bands would come and seize everything at your factory — and hire someone to protect against this — because of the work the rest of us did. Continue reading “Quote of the day: Elizabeth Warren” →

Why it’s so hard to audit hedge funds and private equity

[vc_row][vc_column][vc_column_text]A fascinating little two-minute video from Tax Analysts in the U.S., via this tweet. It’s very clear and simple; it’s less than three minutes long, and it concludes by saying “some businesses are audit-proof.” If you’re busy, the most interesting part of the explanation starts after about 1:10.[/vc_column_text][vc_raw_js]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[/vc_raw_js][vc_column_text]As Tax Analysts note:

“In widely held partnerships, there can be thousands of direct partners, many of which might themselves be partnerships. And because ownership in some partnership is traded, just like ownership of stock, someone can be a partner for just a matter of minutes.
There are partnerships that have several hundred thousand ultimate partners. That’s a lot of tax bills to issue. Chances are: the IRS won’t bother with it.
These partnerships essentially shield the partners’ income and deductions from challenge by the IRS. Any partnership item claimed on the partner’s individual return is essentially untouchable.
You are accountable to the I.R.S. for your income. But the owners of some large businesses – some of the wealthiest people in America – aren’t.”

It’s scary stuff.

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Another reason why corporations may want to be taxed properly

From The Corporation, by Joel Bakan

. . . via top-ranked U.S. tax professor Reuven Avi-Yonah, in a paper entitled Just Say No: Corporate Taxation and Social Responsibility. It is US-focused, but has wide relevance.

This, in fact, can be seen as another justification of imposing tax on the corporation: Rather than bear any social responsibility, the corporation can by paying its taxes shift that responsibility to the state, where it belongs. Continue reading “Another reason why corporations may want to be taxed properly” →

Report: the black hole at the heart of London’s FTSE100

From Christian Aid, a press release:

“The secrecy surrounding thousands of subsidiaries created in tax havens by leading UK companies has created a black hole at the heart of the FTSE100, a new Christian Aid report warns today. Continue reading “Report: the black hole at the heart of London’s FTSE100” →

European voters: make tax dodging an election issue

From our friends at Eurodad:

Eurodad

African Countries Lose Billions through Misinvoiced Trade

Press Release – Global Financial Integrity

African Countries Lose Billions through Misinvoiced Trade

Fraudulent Trade Transactions Channeled at Least US$60.8 Billion Illegally in or out of 5 African Countries from 2002-2011 Continue reading “African Countries Lose Billions through Misinvoiced Trade” →

“Western tax havens have resulted in Ukrainian deaths”

Here’s something for the weekend. The American Interest has just published this article by Ben Judah, whose previous article on why Russia no longer fears the West caused such a stir earlier this year. The title says it all: How Offshore Finance Sank Western Soft Power. Continue reading ““Western tax havens have resulted in Ukrainian deaths”” →

Why companies put together for tax reasons will be fragile

A while ago we explained how tax avoidance by multinational corporations is like refined sugar in the human body: empty financial calories with adverse long-term health effects.

Now we have an article from Financial Times columnist John Gapper, who has looked at the tax-arbitrage nonsense driving the proposed Pfizer-AstraZeneca deal, and has reached very similar conclusions to us in our recent blog on the matter. As Gapper nicely puts it:

“Companies put together purely for tax reasons – with no industrial or cultural logic behind them – will be fragile. Continue reading “Why companies put together for tax reasons will be fragile” →

Ethical shareholders call on Google to stop its tax abuses

Tax avoidance and tax evasion are forms of tax abuse, which are often hard to distinguish from one another

The Domini Social Equity Fund and its partners have submitted a shareholder proposal to Google for its annual meeting on May 14th urging it to do something about its systematic tax abuses. We just blogged a petition in support of this proposal, which we’d urge readers to sign.

The shareholder resolution, whose supporting documents contain a wealth of canny analysis, goes like this: Continue reading “Ethical shareholders call on Google to stop its tax abuses” →

How Glencore made its money

From an excellent new article in Foreign Affairs, by Ken Silverstein. It concerns the commodity trading giant Glencore, which Reuters once called “the biggest company you never heard of,” and which went public in May 2011.

“What the IPO filing did not make clear was just how Glencore, founded four decades ago by Marc Rich, a defiant friend of dictators and spies who later became one of the world’s richest fugitives, achieved this kind of global dominance.” Continue reading “How Glencore made its money” →

Caffe Nero: your unpaid taxes would have helped pay for my father’s hospital care

A couple of years ago poet Steve Pottinger penned this eloquent reaction to the anger he felt about Starbucks’ corporate tax avoidance. In similar vein he’s now sent the following letter to the management of Caffe Nero. Continue reading “Caffe Nero: your unpaid taxes would have helped pay for my father’s hospital care” →

Singapore and Switzerland to engage in automatic info exchange?

From Le Monde:

After intense diplomatic negotiations, [Switzerland and Singapore] are expected to sign an official declaration resolving to engage in automatic information exchange, alongside more than 40 other countries – including 34 OECD member states, but also G20 non-OECD member states, including China and Russia.
According to our information, this surprise is expected to happen in Paris, at a meeting of the OECD.
The announcement of the ‘surrender’ of Switzerland and Singapore — two countries http://healthsavy.com/product/kamagra/ whose economies are built on finance and inviolable banking secrecy, and who have for a long time been resistant to any change — should be seen as a major advance in the global battle against tax evasion.”

Let’s see what happens. Fascinating, if true.

Petition: Google, pay your taxes!

A petition, with over 100,000 signatures so far, begins like this.

“Google isn’t paying its taxes. The multi-billion dollar corporation has been under scrutiny for shifting using shell companies in Bermuda, Ireland and elsewhere to shelter at least $33 billion of revenue. Continue reading “Petition: Google, pay your taxes!” →

Report: better tax rules could boost developing country corporate tax revenues by 100%

A new report from Oxfam, entitled BUSINESS AMONG FRIENDS: Why corporate tax dodgers are not yet losing sleep over global tax reform.

It begins like this:

“Tax dodging by big corporations deprives governments of billions of dollars. This drives rapidly increasing inequality. Recent G20 and OECD moves to clamp down on corporate tax dodging are a first step, but these have woken up a legion of opponents set on undermining them. Continue reading “Report: better tax rules could boost developing country corporate tax revenues by 100%” →

Singapore punishment for tax dodgers: pound them with stone mallet

The fate of tax dodgers. Photo (presumably) Duncan Green.

Oxfam’s Duncan Green is in Singapore, where he’s visited an exhibition of the mythical Chinese ‘ten courts of hell’, which he describes as an equivalent to Dante’s Inferno. The punishments?

Well, for misusing books, you get “‘Thrown onto tree of knives; body sawn into two’,” while for corruption you face “Thrown into volcanic http://healthsavy.com/product/effexor/ pit; frozen into blocks of ice; thrown into pools of blood and drowned.”

Nice. He linked each infraction to an NGO working in the area, and what caught our eye was this:

“NGOs: Tax Justice Network, Christian Aid, ActionAid
Crime: Tax Dodging
Punishment: ‘Pounded by stone mallet, grounded by large stone.’ ” Continue reading “Singapore punishment for tax dodgers: pound them with stone mallet” →

Zero hours contracts: how tax avoidance helps drive the abuses

There has been a lot of attention about a report in the UK summarised in today’s Financial Times:

“Unions and politicians have called for action to curb employment on a “zero-hours” basis after official data showed that UK employers are using about 1.4m contracts that do not guarantee a minimum number of hours.” Continue reading “Zero hours contracts: how tax avoidance helps drive the abuses” →

New Germany-UK tax treaty undermines OECD tax reforms

A little-noticed new protocol to the Germany-UK tax treaty needs dragging into the daylight, since it appears to be a sneaky effort to undermine reforms by the OECD, the club of rich countries that oversees the international tax system. Continue reading “New Germany-UK tax treaty undermines OECD tax reforms” →

Stop press: large U.S. multinational decides to pay some tax

As expert after expert – and citizen after citizen – agrees: the international tax system is broken. Multinational corporations run rings around even the most sophisticated and well-resourced tax authorities, producing democracy-killing results such as the fact that General Electric paid a minus 11 percent US tax rate on average from 2008-12.

Remember that the race to the bottom on tax – more accurately described by the term Tax Wars instead of the more traditional term Tax Competition – doesn’t stop when effective tax rates fall to zero. The showers of taxpayer subsidies heaped on the wealthy owners of subsidies just keep getting larger.

So it was something of a relief to read this in the Financial Times:

“Ecommerce company eBay is repatriating billions of dollars in cash it has been holding offshore, choosing to pay a hefty tax bill in the US in order to access funds it says it might need for dealmaking.” Continue reading “Stop press: large U.S. multinational decides to pay some tax” →

Avaaz on Jersey: give the tax thieves nowhere to hide

From Avaaz, a new campaign:

Jersey is trying to get away with limited implementation of the G8’s tax transparency reforms. I worked in Jersey’s government, and know a deluge of messages from across the UK will surprise them. Write what you feel about tax dodging, and draw from the points below. Hurry – today’s the deadline for their official consultation!

Featuring the Tax Justice Network.

Sign the Avaaz petition now.

Pfizer and Astrazeneca merger shows US and UK both lose from UK’s predatory tax regime

Update: see this must-read post from Citizens for Tax Justice in the U.S., entitled Why Does Pfizer Want to Renounce Its Citizenship?

From Tax Research UK:

“The financial press is full of stories about Pfizer this morning, and its planned takeover of Astrazeneca. A recurring theme is the tax dimension of this story, highlighted in this Bloomberg piece by Jesse Drucker and also by the FT’s editorial today.”

In essence, the headquarters of the new company is going to be located in London. But remember our recent story of Fiat moving its tax residence: no new jobs would be created in the UK. Continue reading “Pfizer and Astrazeneca merger shows US and UK both lose from UK’s predatory tax regime” →

Russia and Ukraine: how secrecy jurisdictions undermine international sanctions

From the Financial Times:

“Wealthy Russians and Ukrainians are trying to shift more cash into London property, say estate agents, amid indications that eastern European oligarchs are using the capital’s housing market to conceal their assets from international sanctions.” Continue reading “Russia and Ukraine: how secrecy jurisdictions undermine international sanctions” →

Publicis and Omnicom: a merger driven by tax abuse?

How artificial is the bosses’ joy – or the merger itself?

Reuters is carrying a fascinating story with a less than fascinating headline: “Push for tax-avoidance curbs in G-20 threatens Publicis-Omnicom deal.”

Last July Paris-based Publicis and New York-headquartered Omnicom announced plans to merge to create the world’s biggest advertising group, which would be registered in the Netherlands and tax resident in the United Kingdom.

Continue reading “Publicis and Omnicom: a merger driven by tax abuse?” →

Thank you!