Stop Amazon's tax dodge now - petition from independent booksellers

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We bring you this petition from Change.org:

We pay our taxes and so should Amazon!

We run the Kenilworth and Warwick bookshops,  independent shops which have been a proud part of our local high streets for many years. We are proud of the personal service we provide to all those who visit our store.

But times are tough and getting tougher.

We face unrelenting pressure from huge online retailers undercutting prices, in particular Amazon and it's pushing businesses like ours to the brink.

But what’s even worse is that Amazon, despite making sales of £2.9 BILLION in the UK last year, does not pay any UK corporation tax on the profits from those sales. In my book, that is not a level playing field and leaves independent retailers like us struggling to compete just because we do the right thing.

All Amazon UK book and toy sales are routed through its Luxembourg subsidiary. So when the British public buy goods from Amazon, they are in fact paying a Luxembourg company. This means Amazon can avoid paying British corporation tax on the profits it makes. Experts say if Amazon's total UK sales profits were not funnelled to Luxembourg, it could be paying as much as £100m a year in British corporation tax.

As Independent booksellers, we are happy with competition in the market but it must be on level terms and by dodging corporation tax in this way, Amazon start with an unfair advantage.

As they grow bigger it’s inevitable that shops like ours will be under even more pressure. That’s bad for customers, bad for the high street and bad for the UK.

Amazon may be obeying the letter of the law - but they’re certainly not being fair. Last year Starbucks announced that they had caved to public pressure and would look at their tax affairs in the UK. It’s time that Amazon did the same.

We pay our taxes and so should they -- please take a stand with us and tell Amazon to pay their fair share.

Until they do, please consider purchasing from local, independent shops instead.

Sign the petition here.

U.S. income inequality: another stunning graph

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From the United States, via David Cay Johnston of Tax Notes, an article entitled Income Inequality: 1 Inch to 5 Miles.

This graph shows that, among other things, the adjusted gross income (AGI) of the bottom 90 percent of the U.S. population rose by just $59 in 2011 dollars in the 45 years between 1966 and 2011, while the AGI of the top 1 percent of the top 1 percent (ie the top 0.01 percent) rose by $18.4 million.


As they say Statesside: go figure. Johnston concludes:

"For each extra dollar of annual income going to each household in the vast majority, an extra $311,233 went to households in the top 1 percent of the top 1 percent. One inch to almost five miles.

What do you think will happen to our tax system, and to the United States, as tax policy helps extend that line to 10 miles?"

More horrifying stats in the main article.

Links Feb 25

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The uncompetitive culture of auditing's big four remains undented The Guardian
Prem Sikka comments on a report published by the UK's Competition Commission on the lack of competition in the auditing market, arguing that the problems are deep rooted and require major surgery.

Yes, taxation can be a good thing for developing countries devex
Article by TJN-Africa's Alvin Mosioma

In Europe's tax race, it's the base, not the rate, that counts Reuters
On the vote in the European Parliament for the EU to adopt the Common Consolidated Corporate Tax Base (CCCTB), and how Ireland, the Netherlands and the UK have either opposed the CCCTB or withheld support.

LinkedIn paid no federal income tax over past three years New York Post

Tax expert urges Channel Islands not to follow Isle of Man on compliance deal Jersey Evening Post

The final assault on tax havens, the OECD tries a pincer movement La Repubblica (In Italian)

Tax, Law And Development Edward Elgar Publishing
New book just released, edited by Yariv Brauner, Professor of Law, University of Florida Levin College of Law, US and Miranda Stewart, Professor of Law, University of Melbourne Law School, Australia.

Kenya: State now slaps 20 per cent tax on mining sector deals Business Daily Africa

Bermuda Relaxes Beneficial Owner Reporting Rules Tax-News

Gérard Depardieu registered as Russian resident amid tax row with France The Guardian

A Revolving Door in Washington With Spin, but Less Visibility Dealb%k

UK rating downgraded while Cayman Islands retains AAA Cayman News Service

Tax evasion is threatening social morality NyTid (In Swedish)

Laundry ... pagina12 (In Spanish)

Rahm's real fight

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As I write this, the Illinois Supreme Court has ruled that they will hear the case that will determine if Rahm Emanuel, the former Illinois Congressman and White House Chief of Staff, can run for Mayor of Chicago. The ruling also has halted all ballots being printed until they make a final determination.

The issue is whether Emanuel has truly established residency to run for the office. There is a law that says a person running for mayor in an Illinois municipality must be resident of that municipality for one year before the election. There is also another law that says a person voting in any Illinois election must establish residency for one year prior to the election, unless said person is called into service for the United States of America.

Emanuel has a home in Chicago, for he was the Congressman for Illinois' 5th District from 2003 to 2009. Ironically, he replaced Rod Blagojevich in Congress. In January of 2009, he became the Chief of Staff for President Obama. He resigned in October of 2010 to run for mayor of his hometown.

Emanuel contends that he meets the residency requirement to be a voter in the upcoming election, thus making him a qualified elector, and therefore a qualified candidate for mayor. He claims that his service as Chief of Staff qualifies for the service to the United States exemption. The Chicago Board of Elections agreed with that premise and qualified him as a candidate.

However, that ruling was challenged to the Illinois Appellate Court and that court overturned their ruling. Unfortunately, I agree with the Appellate Court and I believe the Illinois Supreme Court will also. The problem for Emanuel is that while he may qualify as a voter for the election, the law concerning the qualifications as a candidate are clear and distinct. The fact that he has not been a resident of the state for one year prior to the election, and that absence is documented, Rahm Emanuel is not qualified to run for Mayor of Chicago.

It is a shame because he was the leading candidate going into the February 22nd primary. He campaigned on a positive vision for the city and was not only well-funded, but well-organized also. The main beneficiary of Emanuel leaving the race will more likely be former U.S. Senator Carol Moseley Braun, who has also campaigned as a healer, not a divider.

If the Illinois Supreme Court rules otherwise it will be a surprise, but it is a tough fight that Emanuel has to engage in and in the long run, it will bring some clarity to Chicago politics, which would be a rare, but welcome, moment indeed.

My thoughts on Mississippi's Nov. Initiatives

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As usual, while most Mississippi voters are focused on individuals seeking the various statewide, legislative and county offices, many may not be aware that there are three initiatives on the ballot as well that will impact their lives greatly. Below is my take on those initiatives and where I stand on them. I will start with Initiative #31: Should government be prohibited from taking private property by eminent domain and then transferring it to other persons? Initiative #31 would amend the Mississippi Constitution to prohibit state and local government from taking private property by eminent domain and then conveying it to other persons or private businesses for a period of 10 years after acquisition. Exceptions from the prohibition include drainage and levee facilities, roads, bridges, ports, airports, common carriers, and utilities. The prohibition would not apply in certain situations, including public nuisance, structures unfit for human habitation, or abandoned property. During my time in the Mississippi House of Representatives, this issue showed its importance as we were trying to figure out how to get Nissan to locate their new plant in Canton. We committed millions of dollars in infrastructure development which included the use of eminent domain to make that happen. Eminent domain, which is the attainment of private property for public use, in that regard was a positive because it was used for public projects but it was clear it was beneficial for a private economic development interest. This initiative will clarify in the Mississippi Constitution that eminent domain is only supposed to be used for public projects. It will prohibit eminent domain to be used, for example, to acquire land for the building of a strip mall, factory or an office building. The Farm Bureau has taken the lead in pushing this initiative because any expansion of eminent domain for private economic development would immediately threaten the largest group of landowners in the state, our farmers. I will vote YES on this initiative. Initiative #27: Should the Mississippi Constitution be amended to require a person to submit government issued photo identification in order to vote? Initiative #27 would amend the Mississippi Constitution to require voters to submit a government issued photo identification before being allowed to vote; provides that any voter lacking government issued photo identification may obtain photo identification without charge from the Mississippi Department of Public Safety; and exempts certain residents of state-licensed care facilities and religious objectors from being required to show photo identification in order to vote. One of the most emotional days during my tenure in the Legislature was when we had to take a vote on making Voter ID mandatory, so much so that I wrote a column about it in the Jackson Free Press. Every member spoke on the floor and expressed their feelings, either in support or opposition, and afterwards many of us became closer, despite competing political philosophies. Needless to say this is an emotional issue to members of the African-American community that remember poll taxes and questions like how many bubbles are there in a bar of soap. Voter ID seems like a practical, innocuous argument to preserve the integrity of the voting process. However, it has been used to suppress voter turnout for certain groups in other states. In Tennessee, a 96-year-old Black woman was denied the right to vote recently because she did not have a driver's license. In Florida, college students cannot use their college IDs, even if they attend state universities. The author of the initiative, Sen. Joey Fillingane (R-Lamar County), organized the initiative drive after killing the Voter ID bill passed by the House in the Senate. His argument was that there needed to be a "clean" Voter ID bill, without provisions that would have allowed early voting, same-day registration and restoring the suffrage of first-time felons once they have served out their sentence. It is questionable whether the US Department of Justice will approve a Constitutional Amendment that requires Voter ID for all voters, but it is very possible. It is the only initiative that has a cost attached to it. It is estimated that the initiative, if passed, could cost as much as $1.5 million from the Department of Public Safety budget. Obviously the proponents of the measure do not feel strongly enough to convince the state's 82 Circuit Clerks to provide photos on the voter registration cards they provide in their respective counties. I will vote NO on this initiative. Initiative #26: Should the term “person” be defined to include every human being from the moment of fertilization, cloning, or the equivalent thereof? Initiative #26 would amend the Mississippi Constitution to define the word “person” or “persons”, as those terms are used in Article III of the state constitution, to include every human being from the moment of fertilization, cloning, or the functional equivalent thereof. I am considered a pro-life politician. I was endorsed by Pro-Life Mississippi when I served in the House. I am opposed to abortion, an emergency medical procedure, being used as a form of birth/population control. I am a strong proponent of adoption and a former abstinence-only counselor. I voted for the House Bill that banned abortions in this state, but I was also the author of the amendment in that same bill that allowed exceptions for rape, incest and the health of the mother. As a Christian, I believe life begins at conception and that God has predestined our lives before our existence on this earth begins. However, I have also made the argument that the US Constitution and the Mississippi Constitution are not the 67th and 68th books of the Holy Bible. To redefine "person/persons" in Article III of the Mississippi Constitution would effectively ban abortions in this state, but how broad of a swath will this provision cut? Medical professionals are divided on whether the initiative would prevent in vitro fertilization and outlaw forms of conventional birth control. Would family planning activities be possibly outlawed? Would the exceptions of rape, incest and the health of the mother be considered? Here is another scenario that has not be broached: Say an immigrant couple from El Salvador comes to Mississippi without proper documentation. The wife becomes pregnant in Mississippi and then they are caught. At that point, the deportation process begins. If the personhood initiative is passed, does that fetus, which would be considered a person in the Mississippi Constitution have the right to stay, thus preventing the mother from being deported? If the Federal Government is successful in deporting the mother, can the child come back and petition for US Citizenship based on the notion it was conceived in Mississippi and was considered a person by that state's Constitution? This initiative has failed twice in Colorado, but will be introduced in four other states. The Mississippi initiative supporters' strategy is for this initiative to be challenged and struck down in the Federal Courts, moved up in the Federal docket to the Supreme Court of the United States, thus forcing them to re-visit the Roe v. Wade decision. I consider this an extreme action based on a constitutionally extreme political philosophy. I will vote NO on this initiative. Those are my positions. Research these initiatives for yourself and then cast your vote on November 8th.

My thoughts on Mississippi's Nov. Initiatives

To contact us Click HERE
As usual, while most Mississippi voters are focused on individuals seeking the various statewide, legislative and county offices, many may not be aware that there are three initiatives on the ballot as well that will impact their lives greatly. Below is my take on those initiatives and where I stand on them. I will start with Initiative #31: Should government be prohibited from taking private property by eminent domain and then transferring it to other persons? Initiative #31 would amend the Mississippi Constitution to prohibit state and local government from taking private property by eminent domain and then conveying it to other persons or private businesses for a period of 10 years after acquisition. Exceptions from the prohibition include drainage and levee facilities, roads, bridges, ports, airports, common carriers, and utilities. The prohibition would not apply in certain situations, including public nuisance, structures unfit for human habitation, or abandoned property. During my time in the Mississippi House of Representatives, this issue showed its importance as we were trying to figure out how to get Nissan to locate their new plant in Canton. We committed millions of dollars in infrastructure development which included the use of eminent domain to make that happen. Eminent domain, which is the attainment of private property for public use, in that regard was a positive because it was used for public projects but it was clear it was beneficial for a private economic development interest. This initiative will clarify in the Mississippi Constitution that eminent domain is only supposed to be used for public projects. It will prohibit eminent domain to be used, for example, to acquire land for the building of a strip mall, factory or an office building. The Farm Bureau has taken the lead in pushing this initiative because any expansion of eminent domain for private economic development would immediately threaten the largest group of landowners in the state, our farmers. I will vote YES on this initiative. Initiative #27: Should the Mississippi Constitution be amended to require a person to submit government issued photo identification in order to vote? Initiative #27 would amend the Mississippi Constitution to require voters to submit a government issued photo identification before being allowed to vote; provides that any voter lacking government issued photo identification may obtain photo identification without charge from the Mississippi Department of Public Safety; and exempts certain residents of state-licensed care facilities and religious objectors from being required to show photo identification in order to vote. One of the most emotional days during my tenure in the Legislature was when we had to take a vote on making Voter ID mandatory, so much so that I wrote a column about it in the Jackson Free Press. Every member spoke on the floor and expressed their feelings, either in support or opposition, and afterwards many of us became closer, despite competing political philosophies. Needless to say this is an emotional issue to members of the African-American community that remember poll taxes and questions like how many bubbles are there in a bar of soap. Voter ID seems like a practical, innocuous argument to preserve the integrity of the voting process. However, it has been used to suppress voter turnout for certain groups in other states. In Tennessee, a 96-year-old Black woman was denied the right to vote recently because she did not have a driver's license. In Florida, college students cannot use their college IDs, even if they attend state universities. The author of the initiative, Sen. Joey Fillingane (R-Lamar County), organized the initiative drive after killing the Voter ID bill passed by the House in the Senate. His argument was that there needed to be a "clean" Voter ID bill, without provisions that would have allowed early voting, same-day registration and restoring the suffrage of first-time felons once they have served out their sentence. It is questionable whether the US Department of Justice will approve a Constitutional Amendment that requires Voter ID for all voters, but it is very possible. It is the only initiative that has a cost attached to it. It is estimated that the initiative, if passed, could cost as much as $1.5 million from the Department of Public Safety budget. Obviously the proponents of the measure do not feel strongly enough to convince the state's 82 Circuit Clerks to provide photos on the voter registration cards they provide in their respective counties. I will vote NO on this initiative. Initiative #26: Should the term “person” be defined to include every human being from the moment of fertilization, cloning, or the equivalent thereof? Initiative #26 would amend the Mississippi Constitution to define the word “person” or “persons”, as those terms are used in Article III of the state constitution, to include every human being from the moment of fertilization, cloning, or the functional equivalent thereof. I am considered a pro-life politician. I was endorsed by Pro-Life Mississippi when I served in the House. I am opposed to abortion, an emergency medical procedure, being used as a form of birth/population control. I am a strong proponent of adoption and a former abstinence-only counselor. I voted for the House Bill that banned abortions in this state, but I was also the author of the amendment in that same bill that allowed exceptions for rape, incest and the health of the mother. As a Christian, I believe life begins at conception and that God has predestined our lives before our existence on this earth begins. However, I have also made the argument that the US Constitution and the Mississippi Constitution are not the 67th and 68th books of the Holy Bible. To redefine "person/persons" in Article III of the Mississippi Constitution would effectively ban abortions in this state, but how broad of a swath will this provision cut? Medical professionals are divided on whether the initiative would prevent in vitro fertilization and outlaw forms of conventional birth control. Would family planning activities be possibly outlawed? Would the exceptions of rape, incest and the health of the mother be considered? Here is another scenario that has not be broached: Say an immigrant couple from El Salvador comes to Mississippi without proper documentation. The wife becomes pregnant in Mississippi and then they are caught. At that point, the deportation process begins. If the personhood initiative is passed, does that fetus, which would be considered a person in the Mississippi Constitution have the right to stay, thus preventing the mother from being deported? If the Federal Government is successful in deporting the mother, can the child come back and petition for US Citizenship based on the notion it was conceived in Mississippi and was considered a person by that state's Constitution? This initiative has failed twice in Colorado, but will be introduced in four other states. The Mississippi initiative supporters' strategy is for this initiative to be challenged and struck down in the Federal Courts, moved up in the Federal docket to the Supreme Court of the United States, thus forcing them to re-visit the Roe v. Wade decision. I consider this an extreme action based on a constitutionally extreme political philosophy. I will vote NO on this initiative. Those are my positions. Research these initiatives for yourself and then cast your vote on November 8th.

Sudden jump in D.C.'s tax revenues helped by action on corporate tax shelters

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From the DC Fiscal Policy Institute in the U.S. District of Columbia, an interesting tale that provides further support for TJN's calls for unitary taxation:

"A little-noticed part of the story behind DC’s $417 million surplus is that corporate income tax collections jumped substantially in 2012. In fact, it was the largest single-year jump in 20 years.  A major factor behind the dramatic increase is that DC’s leaders took steps in recent years – which DCFPI had promoted – to close tax shelters used by large multi-state corporations.  The tax reform, known as “combined reporting,” was implemented in the District in 2012."

The graph shows the remarkable increase in the tax take. Combined Reporting is one of the two core components of Unitary Taxation. (A combined report on an international basis is a single set of worldwide consolidated accounts in each country where it has a business presence; the other key component of unitary taxation is the apportionment of global profits out to the different jurisdictions to tax at their own rate.)

The DCFI report and associated testimony highlights that Combined Reporting is not the only reason for the tax increases, but it is a significant one.

DCFPI adds:

"Without combined reporting, large multi-state corporations can shift their reported income and profits among various subsidiaries in ways that reduce the profits reported in any given state.  Beyond the problem of avoiding taxes, this also creates an unfair advantage over local businesses, which don’t have any way to shift their profits. Combined reporting requires corporations to report the income of all subsidiaries together and then apportion that total income among the states where they do business. It is viewed as the most comprehensive way to close corporate tax shelters, and is now used by 23 states and the District."

Now as it happens, the OECD has just published a major new policy report that opens the way for potentially radical changes to the international tax system. We will make sure they see this.

Hat tip: E.J. Fagan.