To contact us Click HERE
New website on human rights abuses linked to financial sector Centre of Concern
On the launch of rightingfinance by a task force of human rights organizations and networks - a website devoted to highlighting the globally growing concern about the impact of financial regulation on human rights.
Tax demo at Ugland House Cayman News Service
Nov 14 - Passengers travelling on a special cruise with The Nation demonstrate outside Ugland House, the home of legal offshore specialists Maples and Calder. See also CODEPINK press release Americans on Cayman Islands Protest US Corporate Tax Evaders.
Fortune 500 Corporations Holding $1.6 Trillion in Profits Offshore Citizens for Tax Justice
Dec 13 - "Among the Fortune 500 corporations, 290 have revealed that they, collectively, held nearly $1.6 trillion in profits outside the United States at the end of 2011. This is one indication of how much they might benefit from a so-called “territorial” tax system, which would permanently exempt these offshore profits from U.S. taxes." See also: New Report Shows Why Corporate Lobbyists' Proposals Should Not Be Part of Budget Deal.
Americans Support Tax Increase But Not Spending Cuts FiredogLake
Dec 13 - "According to a new Pew Research poll, raising taxes on those making over $250,000 a year is the most popular deficit reduction idea, while cutting eduction spending is the least popular."
The difference between the U.K. and the U.S. on financial regulation Treasure Islands
Dec 14 - "Financial regulation in the United States has been godawful enough. But compared to Britain, it has always looked rather good ... "
UK: Prince Charles's £700m estate accused of tax avoidance Guardian
Dec 14 - "The duchy of Cornwall last year provided Charles with an income of £18m and HMRC's anti-avoidance group is now being asked to examine its non-payment of corporation tax following a potentially significant court ruling on its legal status. The issue has been raised by an accountant investigating the tax affairs of the duchy – an agricultural, commercial and residential landowner."
Panorama confronts the Barclay brothers with tax revelations Guardian
Dec 14 - Commenting on tonight's BBC Panorama programme "The Tax Haven Twins John Sweeney investigates the secretive world of the billionaire Barclay twins."
31 Aralık 2012 Pazartesi
Tax evasion protest in the Cayman Islands
To contact us Click HERE
This has just appeared in our email inbox, via Nicole Tichon, TJN-USA
That is a remarkable and very welcome development. It is not a hospitable environment for such protests. More photos here.
Contact: Medea Benjamin, medea @ codepink.org Jodie Evans, 310-913-1431, Jodie @ codepink.org
For other protests in tax havens, see this, for example.
"In the first protest against Cayman Island tax shelters the island has seen, on Thursday, December 13, over 100 Americans marched to the Ugland House, the location where some 18,000 corporations hide their tax dollars, to demand that corporations pay their fair share of taxes. They held signs saying “Bring our tax dollars home” and “We want our money back” and sang a parody song to Harry Belafonte's "Day-O" with the refrain "Tax evaders time to bring the money home." Four of them were dressed as billionaires, waving their money in the air in a theatrical show of corporate greed."
That is a remarkable and very welcome development. It is not a hospitable environment for such protests. More photos here.
The protesters are traveling with the weekly magazine The Nation, and the protest was organized by the activist group CODEPINK. This focus on tax shelters takes place at a time when US officials are engulfed in a tug-of-war over what budget cuts to make to avoid what they are calling the “fiscal cliff.” “The US deficit could be solved with the $150 billion a year that could be recovered from these offshore tax shelters,” says CODEPINK cofounder Jodie Evans.
“The American people, exposed to the issue of tax cheaters during Romney’s presidential bid, believe that corporations should pay their fair share,” said CODEPINK cofounder Medea Benjamin. “That’s why we are here, in the Cayman Islands, to demand that corporations such as Exxon, McDonalds, and KBR bring the tax dollars home."
Contact: Medea Benjamin, medea @ codepink.org Jodie Evans, 310-913-1431, Jodie @ codepink.org
For other protests in tax havens, see this, for example.
Illicit Financial Outflows Cost Developing World $859 Billion in 2010 - study
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From Global Financial Integrity in Washington, D.C.:
Crime, corruption, and tax evasion cost the developing world $858.8 billion in 2010, just below the all-time high of $871.3 billion set in 2008—the year preceding the global financial crisis. The findings are part of a new study released today by Global Financial Integrity (GFI), a Washington-based research and advocacy organization.For this estimate, GFI have changed their methodology compared to previous reports.
The report, “Illicit Financial Flows from Developing Countries: 2001-2010,” is GFI’s annual update on the amount of money flowing out of developing economies via crime, corruption and tax evasion, and it is the first of GFI’s reports to include data for the year 2010.
Dr. Kar and Ms. Freitas’ research tracks the amount of illegal capital flowing out of 150 different developing countries over the 10-year period from 2001 through 2010, and it ranks the countries by magnitude of illicit outflows. According to the report, the 20 biggest exporters of illicit financial flows over the decade are:See the full report here.
China ....................... $274 billion average ($2.74 trillion cumulative)
Mexico ..................................... $47.6 billion avg. ($476 billion cum.)
Malaysia .................................. $28.5 billion avg. ($285 billion cum.)
Saudi Arabia ........................... $21.0 billion avg. ($210 billion cum.)
Russia ....................................... $15.2 billion avg. ($152 billion cum.)
Philippines ............................... $13.8 billion avg. ($138 billion cum.)
Nigeria ...................................... $12.9 billion avg. ($129 billion cum.)
India ......................................... $12.3 billion avg. ($123 billion cum.)
Indonesia ................................. $10.9 billion avg. ($109 billion cum.)
United Arab Emirates .............. $10.7 billion avg. ($107 billion cum.)
Iraq ......................................... $10.6 billion avg. ($63.6 billion cum.)2
South Africa ........................... $8.39 billion avg. ($83.9 billion cum.)
Thailand ................................. $6.43 billion avg. ($64.3 billion cum.)
Costa Rica ............................... $6.37 billion avg. ($63.7 billion cum.)
Qatar ........................................ $5.61 billion avg. ($56.1 billion cum.)
Serbia ....................................... $5.14 billion avg. ($51.4 billion cum.)
Poland .................................... $4.08 billion avg. ($40.8 billion cum.)
Panama ................................... $3.99 billion avg. ($39.9 billion cum.)
Venezuela ................................ $3.79 billion avg. ($37.9 billion cum.)
Brunei ..................................... $3.70 billion avg. ($37.0 billion cum.)
For a complete ranking of average annual illicit financial outflows by country, please refer to Table 2 of the report’s appendix on page 36, or download the rankings by average annual illicit outflows here.
Links Dec 18
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Conference: "Tackling Tax Havens and Illicit Financial Flows - How the EU and Nordic Countries can take the lead" Concord Denmark
High level conference on 28 January 2013, in Copenhagen. Participants include TJN Director John Christensen, EU Commissioner for taxation Algirdas Šemeta, and OECD Centre for Tax Policy and Administration Director Pascal Saint-Amans. Registration deadline is 23 January 2013 - check the link for programme and contacts.
Swiss Court Unable To Block Tax Deals Tax-News
Dec 17 - "The Swiss Federal Court in Lausanne has recently rejected an attempt to block entry into force of the bilateral withholding tax agreements concluded between Switzerland and Germany, the UK, and Austria."
Channel Islands Rebuff UK's FATCA-Style Plans Tax-News
Dec 17 - "Jersey and Guernsey have released a joint statement indicating that they will not sign an enhanced Tax Information Exchange Agreement with British authorities unless the UK's proposed Foreign Account Tax Compliance Act (FATCA)-style initiative targets global adoption." They claim to be 'clean' and 'transparent' then fight tooth and nail against key transparency schemes. Isle of Man looks a paragon by comparison (which isn't saying much).
New publication: Tax justice as an alternative to austerity of the debt ceiling and fiscal compact TJN Germany blog
Dec 17 - Paper by Nicola Liebert, following a conference jointly organized by the Friedrich Ebert Foundation, the Global Policy Forum Europe, MISEREOR and Terre des Hommes together with TJN Germany. See also: links from the TJN Germany blog.
The IMF’s New View on Financial Globalization: A Critical Assessment Boston University Pardee Center
In December 2012, the IMF issued a new “institutional view” on capital account liberalization and the management of capital flows between countries. In this policy brief, Kevin P. Gallagher, one of the co-chairs of the Pardee Center Task Force on Regulating Global Capital Flows for Long-Run Development, offers his assessment of the IMF’s new position.
How Venezuela blacklisted itself as a tax haven Martin Hearson's blog
Dec 14 - On the European Commission proposing that EU Member States create a blacklist of countries that do not “apply minimum standards of good governance in tax matters. Points out the perils of blacklisting, and why an EU approach with only criteria rather than jurisdictions will be more effective. Cites Jason Sharman,'s paper “Dysfunctional policy transfer in national blacklists”
SFr39.5 million to be returned to Angola swissinfo
Dec 17 - "Switzerland has announced it will return $43 million (SFr39.5 million) in frozen assets to Angola. The money will be used to fund development projects that directly benefit the population of the southern African country ... The backdrop to the restitution are judicial proceedings in Geneva regarding alleged money laundering." The question, as always: how is it that the money was accepted into the Swiss bank accounts in the first place? At least, in a small way, the Swiss are acting; the UK, which is the world's greatest money laundering sink, refuses even to consider such gestures.
Unitary taxation one way to tackle multinationals The Australian Financial Review
Dec 10 - Cites TJN's Mark Zirnsak, on the Australian federal government's tax review panel, arguing for a switch to unitary taxation - as explained here.
Australian Taxation Office Reports On Tax Evasion Crackdown Tax-News
Dec 14 - In July-Septemnber 2012, two people have been prosecuted under Project Wickenby - a cross-agency task force set up in 2006 to prevent the promotion of and participation in the abusive use of "secrecy havens." To date, 28 people have been sentenced under the project. For more on Project Wickenby see here.
Cayman: Offshore Industry autonomy stressed Cayman News Service
Dec 14 - "In the wake of the premier’s arrest ... in connection a number of investigations, including financial irregularities, the body representing the Cayman Islands' financial industry has stressed the independence of the sector and its regulators from the government." Which highlights the fortress-like democratic disconnect between finance and the related populations.
Unfulfilled promise of the end of tax havens Carta Maior (In Portuguese)
Dec 12 - Commenting on how, following the 2009 G20 statement that the era of tax havens is over, the problem is still rampant. Points out the asymmetry whereby nations such as the U.S. demand tax compliance by their own taxpayers, whilst providing tax haven and secrecy services from their own jurisdiction. Hat tip: Jorge Gaggero.
U.S.: Small Business Owners to Congress: "Need $1 Trillion? Look Offshore" Citizens for Tax Justice
Dec 14 - Reporting on 626 small business owners having signed a letter calling for corporate tax reform, sent by the American Sustainable Business Council, Business for Shared Prosperity, and the Main Street Alliance to Congress and President Obama.
The Second Great Betrayal: Obama and Cameron Decide that Banks are above the Law New Economic Perspectives
Dec 17 - William K. Black observes: "One of the “tells” that reveals how embarrassed Lanny Breuer (head of the Criminal Division) and Eric Holder (AG) are by the disgraceful refusal to prosecute HSBC and its officers for their tens of thousands of felonies are the false and misleading statements made by the Department of Justice (DOJ) about the settlement." See comment on Treasure Islands.
UK: Calls to reform HMRC’s ‘big business’ board The Bureau of Investigative Journalism
Dec 3 - "All four non-executive board members of HM Revenue & Customs (HMRC) have extensive links with big business, leading to wide-ranging calls for HMRC to make its key strategic body more representative of British commerce."
High level conference on 28 January 2013, in Copenhagen. Participants include TJN Director John Christensen, EU Commissioner for taxation Algirdas Šemeta, and OECD Centre for Tax Policy and Administration Director Pascal Saint-Amans. Registration deadline is 23 January 2013 - check the link for programme and contacts.
Swiss Court Unable To Block Tax Deals Tax-News
Dec 17 - "The Swiss Federal Court in Lausanne has recently rejected an attempt to block entry into force of the bilateral withholding tax agreements concluded between Switzerland and Germany, the UK, and Austria."
Channel Islands Rebuff UK's FATCA-Style Plans Tax-News
Dec 17 - "Jersey and Guernsey have released a joint statement indicating that they will not sign an enhanced Tax Information Exchange Agreement with British authorities unless the UK's proposed Foreign Account Tax Compliance Act (FATCA)-style initiative targets global adoption." They claim to be 'clean' and 'transparent' then fight tooth and nail against key transparency schemes. Isle of Man looks a paragon by comparison (which isn't saying much).
New publication: Tax justice as an alternative to austerity of the debt ceiling and fiscal compact TJN Germany blog
Dec 17 - Paper by Nicola Liebert, following a conference jointly organized by the Friedrich Ebert Foundation, the Global Policy Forum Europe, MISEREOR and Terre des Hommes together with TJN Germany. See also: links from the TJN Germany blog.
The IMF’s New View on Financial Globalization: A Critical Assessment Boston University Pardee Center
In December 2012, the IMF issued a new “institutional view” on capital account liberalization and the management of capital flows between countries. In this policy brief, Kevin P. Gallagher, one of the co-chairs of the Pardee Center Task Force on Regulating Global Capital Flows for Long-Run Development, offers his assessment of the IMF’s new position.
How Venezuela blacklisted itself as a tax haven Martin Hearson's blog
Dec 14 - On the European Commission proposing that EU Member States create a blacklist of countries that do not “apply minimum standards of good governance in tax matters. Points out the perils of blacklisting, and why an EU approach with only criteria rather than jurisdictions will be more effective. Cites Jason Sharman,'s paper “Dysfunctional policy transfer in national blacklists”
SFr39.5 million to be returned to Angola swissinfo
Dec 17 - "Switzerland has announced it will return $43 million (SFr39.5 million) in frozen assets to Angola. The money will be used to fund development projects that directly benefit the population of the southern African country ... The backdrop to the restitution are judicial proceedings in Geneva regarding alleged money laundering." The question, as always: how is it that the money was accepted into the Swiss bank accounts in the first place? At least, in a small way, the Swiss are acting; the UK, which is the world's greatest money laundering sink, refuses even to consider such gestures.
Unitary taxation one way to tackle multinationals The Australian Financial Review
Dec 10 - Cites TJN's Mark Zirnsak, on the Australian federal government's tax review panel, arguing for a switch to unitary taxation - as explained here.
Australian Taxation Office Reports On Tax Evasion Crackdown Tax-News
Dec 14 - In July-Septemnber 2012, two people have been prosecuted under Project Wickenby - a cross-agency task force set up in 2006 to prevent the promotion of and participation in the abusive use of "secrecy havens." To date, 28 people have been sentenced under the project. For more on Project Wickenby see here.
Cayman: Offshore Industry autonomy stressed Cayman News Service
Dec 14 - "In the wake of the premier’s arrest ... in connection a number of investigations, including financial irregularities, the body representing the Cayman Islands' financial industry has stressed the independence of the sector and its regulators from the government." Which highlights the fortress-like democratic disconnect between finance and the related populations.
Unfulfilled promise of the end of tax havens Carta Maior (In Portuguese)
Dec 12 - Commenting on how, following the 2009 G20 statement that the era of tax havens is over, the problem is still rampant. Points out the asymmetry whereby nations such as the U.S. demand tax compliance by their own taxpayers, whilst providing tax haven and secrecy services from their own jurisdiction. Hat tip: Jorge Gaggero.
U.S.: Small Business Owners to Congress: "Need $1 Trillion? Look Offshore" Citizens for Tax Justice
Dec 14 - Reporting on 626 small business owners having signed a letter calling for corporate tax reform, sent by the American Sustainable Business Council, Business for Shared Prosperity, and the Main Street Alliance to Congress and President Obama.
The Second Great Betrayal: Obama and Cameron Decide that Banks are above the Law New Economic Perspectives
Dec 17 - William K. Black observes: "One of the “tells” that reveals how embarrassed Lanny Breuer (head of the Criminal Division) and Eric Holder (AG) are by the disgraceful refusal to prosecute HSBC and its officers for their tens of thousands of felonies are the false and misleading statements made by the Department of Justice (DOJ) about the settlement." See comment on Treasure Islands.
UK: Calls to reform HMRC’s ‘big business’ board The Bureau of Investigative Journalism
Dec 3 - "All four non-executive board members of HM Revenue & Customs (HMRC) have extensive links with big business, leading to wide-ranging calls for HMRC to make its key strategic body more representative of British commerce."
Links Dec 19
To contact us Click HERE
Uruguayan Congress approves deal to fight tax evasion Reuters
Dec 18 - On "an accord that will let Argentine tax inspectors dig up information on savers with Uruguayan bank accounts to crack down on evasion and money laundering ... The OECD had urged Uruguay to strike accords to share tax information with its biggest trading partners, among them Argentina and Brazil." However, note: "Tax agents will only be able to share information in specific cases where there is a strong likelihood of evasion." See our resource page on On Exchange of Information for Tax Purposes.
Is the Isle of Man negotiating the equivalent of a Liechtenstein Disclosure Facility? Tax Research UK
Dec 19 - The Isle of Man has now agreed to implement a FATCA style agreement with the UK. Jersey and Guernsey have not. What might explain the difference in approach?
Liechtenstein FMA Seeks Stronger Ties With Switzerland Tax-News
Dec 19 - "President of the Liechtenstein Financial Market Authority supervisory board Urs Roth-Cuony has urged both countries to work together to capitalize on their respective strengths with regard to financial services."
Luxembourg, US To Conclude FATCA In 2013 Tax-News
Dec 19 - "Luxembourg’s Finance Minister Luc Frieden has announced plans to begin negotiations shortly on an inter-governmental agreement between Luxembourg and the United States, implementing the Foreign Account Tax Compliance Act (FATCA) ... the finance ministry underscored that the inter-governmental agreement will serve to enable the country’s financial institutions to conform in all legal certainty to the new US legislation and to guarantee the competitiveness of the Luxembourg financial sector."
Questions and Answers on the Task Force for Greece Europa
Dec 17 - "As regards anti-money laundering the Greek Financial Intelligence Unit (FIU) has reported 418 cases of suspected tax evasion to the tax authorities and to the tax investigation service (SDOE). Since the beginning of 2012, 267 cases relating to confirmed tax evasion have been sent to the Prosecutor´s office and assets worth €60m have been frozen."
Spain frees wanted ex-HSBC employee swissinfo
Dec 18 - "Spain’s National Court has granted conditional freedom to a former HSBC bank employee who is wanted by Switzerland for stealing confidential data on thousands of customers with Swiss accounts ... Several Spanish political parties oppose Falciani's possible extradition, saying he is helping uncover tax fraud."
UBS fined $1.53 billion for interest rate rigging swissinfo
Dec 18 - "UBS has agreed to pay approximately SFr1.4 billion ($1.53 billion) in fines to United States, British and Swiss authorities to resolve Libor-related investigations ...The charge is the latest blow for UBS, which already suffered a $2.3-billion loss in a rogue trading scandal earlier this year. In 2009, it paid a $780 million fine to settle a US tax investigation after nearly collapsing a year earlier under the weight of sub-prime losses."
Swiss, facing EU tax pressure, ponder how to attract firms Reuters
Dec 19 - "Happy Taxation" is a 2011 book by Pascal Broulis, finance minister of the Swiss canton of Vaud and celebrant of the low taxes that distinguish Switzerland. But as times get tougher, discontent about Swiss tax breaks is mounting."
France's Hollande Wants Deeper Euro-Zone Integration Wall Street Journal
Dec 14 - "France would push for deeper euro-zone integration and would be willing to use enhanced cooperation if its European Union partners raised objections, President Francois Hollande said."
Afghanistan Seeks Taxes From Contractors to U.S. Wall Street Journal
Dec 17 - "Afghanistan has launched tax audits of major contractors to the U.S. military, government officials say, in a bid to shore up the country's finances as the international military presence winds down and reconstruction funds dry up."
U.S.: Sen. Levin wants corporate tax revenue in a fiscal cliff deal Washington Post
Dec 14 - More on a story linked earlier. "Sen. Carl Levin ... argues that corporations, too, should be contributing net revenue to deficit reduction, rather than just finding savings through entitlement programs and the small businesses who pay their taxes through the individual tax code."
Dec 18 - On "an accord that will let Argentine tax inspectors dig up information on savers with Uruguayan bank accounts to crack down on evasion and money laundering ... The OECD had urged Uruguay to strike accords to share tax information with its biggest trading partners, among them Argentina and Brazil." However, note: "Tax agents will only be able to share information in specific cases where there is a strong likelihood of evasion." See our resource page on On Exchange of Information for Tax Purposes.
Is the Isle of Man negotiating the equivalent of a Liechtenstein Disclosure Facility? Tax Research UK
Dec 19 - The Isle of Man has now agreed to implement a FATCA style agreement with the UK. Jersey and Guernsey have not. What might explain the difference in approach?
Liechtenstein FMA Seeks Stronger Ties With Switzerland Tax-News
Dec 19 - "President of the Liechtenstein Financial Market Authority supervisory board Urs Roth-Cuony has urged both countries to work together to capitalize on their respective strengths with regard to financial services."
Luxembourg, US To Conclude FATCA In 2013 Tax-News
Dec 19 - "Luxembourg’s Finance Minister Luc Frieden has announced plans to begin negotiations shortly on an inter-governmental agreement between Luxembourg and the United States, implementing the Foreign Account Tax Compliance Act (FATCA) ... the finance ministry underscored that the inter-governmental agreement will serve to enable the country’s financial institutions to conform in all legal certainty to the new US legislation and to guarantee the competitiveness of the Luxembourg financial sector."
Questions and Answers on the Task Force for Greece Europa
Dec 17 - "As regards anti-money laundering the Greek Financial Intelligence Unit (FIU) has reported 418 cases of suspected tax evasion to the tax authorities and to the tax investigation service (SDOE). Since the beginning of 2012, 267 cases relating to confirmed tax evasion have been sent to the Prosecutor´s office and assets worth €60m have been frozen."
Spain frees wanted ex-HSBC employee swissinfo
Dec 18 - "Spain’s National Court has granted conditional freedom to a former HSBC bank employee who is wanted by Switzerland for stealing confidential data on thousands of customers with Swiss accounts ... Several Spanish political parties oppose Falciani's possible extradition, saying he is helping uncover tax fraud."
UBS fined $1.53 billion for interest rate rigging swissinfo
Dec 18 - "UBS has agreed to pay approximately SFr1.4 billion ($1.53 billion) in fines to United States, British and Swiss authorities to resolve Libor-related investigations ...The charge is the latest blow for UBS, which already suffered a $2.3-billion loss in a rogue trading scandal earlier this year. In 2009, it paid a $780 million fine to settle a US tax investigation after nearly collapsing a year earlier under the weight of sub-prime losses."
Swiss, facing EU tax pressure, ponder how to attract firms Reuters
Dec 19 - "Happy Taxation" is a 2011 book by Pascal Broulis, finance minister of the Swiss canton of Vaud and celebrant of the low taxes that distinguish Switzerland. But as times get tougher, discontent about Swiss tax breaks is mounting."
France's Hollande Wants Deeper Euro-Zone Integration Wall Street Journal
Dec 14 - "France would push for deeper euro-zone integration and would be willing to use enhanced cooperation if its European Union partners raised objections, President Francois Hollande said."
Afghanistan Seeks Taxes From Contractors to U.S. Wall Street Journal
Dec 17 - "Afghanistan has launched tax audits of major contractors to the U.S. military, government officials say, in a bid to shore up the country's finances as the international military presence winds down and reconstruction funds dry up."
U.S.: Sen. Levin wants corporate tax revenue in a fiscal cliff deal Washington Post
Dec 14 - More on a story linked earlier. "Sen. Carl Levin ... argues that corporations, too, should be contributing net revenue to deficit reduction, rather than just finding savings through entitlement programs and the small businesses who pay their taxes through the individual tax code."
27 Aralık 2012 Perşembe
Links Dec 21
To contact us Click HERE
Europe needs joint effort to tackle tax avoidance: EU Reuters
Dec 20 - On "an action plan detailed by EU taxation policy commissioner Algirdas Semeta on Thursday to deal with inventive and increasingly common tactics used by big companies and others to reduce their tax bills."
Netherlands To Support Tax Collection In Developing Countries Tax-News
Dec 19 - Very positive news - Dutch Minister for Foreign Trade and Development Cooperation Lilianne Ploumen has announced plans to assist developing countries in the collection of taxes. Further, existing tax treaties will be examined to assess the effects of the accords on tax revenues in developing countries.
Family trusts face greater scrutiny from banks when New Zealand's anti-money laundering law comes into force next June interest .co .nz
Dec 19 - "New Zealand's reputation has also taken a hit from a long list of New Zealand registered companies, often so-called offshore finance companies, committing crimes overseas."
CHART: The Global Corporate Tax Rate Plummeted In The Last Decade Think Progress
Dec 19 - Countering a conservative myth that corporations suffer from too-high taxes, a Deutsche Bank report illustrates how the global effective corporate tax rate has dropped significantly in the past decade.
Vietnam: Many foreign firms under tax evasion question vietnamnet
Dec 13 - Reporting on challenges faced by Vietnam with transfer pricing. Cites as one example: "Coming to Vietnam in 1993, Coca Cola has continuously invested in production expansion; its revenue growth is always strong, but the tax agency said they have not collected any coin of taxes from the company."
U.S.: 515 Groups Send Letters to White House & Congress Americans for Tax Fairness
Dec 20 - A letter sent to President Barack Obama and Capitol Hill in support of revenue-positive changes to the corporate tax code and to voice strong opposition to a territorial tax system.
In Russia, unheeded cries of corruption Reuters
Dec 18 - On challenges of journalists reporting on corruption in Russia. Cites President Barack Obama signing into law the so-called Magnitsky Act, which will deny visas to Russia officials thought to be connected with the violent death in jail of Sergei Magnitsky, a lawyer pursuing a state-level tax fraud.
UK: Revenue & Customs offers deal on tax avoidance sheltering £3.5bn Guardian
Dec 20 - "HM Revenue & Customs is to write to some of Britain's wealthiest bankers, hedge fund managers and celebrities offering a chance to settle income tax avoidance schemes estimated to have sheltered more than £3.5bn through film financing structures and other tax-motivated partnerships."
UBS Traders' 'Humongous' Libor-Fixing Boasts CNBC
Dec 19 - On the shocking content of emails and instant messaging by UBS traders involved in rigging Libor, released by The U.K.'s Financial Services Authority.
Tax avoidance could earn you a seat in the Lords Farmers Weekly
Dec 20 - An amusing account, by an English farmer, of a tax strategy structured via his "farming holding company "Carrbucks" registered in the little-known Caribbean atoll of "Amoral"".
Dec 20 - On "an action plan detailed by EU taxation policy commissioner Algirdas Semeta on Thursday to deal with inventive and increasingly common tactics used by big companies and others to reduce their tax bills."
Netherlands To Support Tax Collection In Developing Countries Tax-News
Dec 19 - Very positive news - Dutch Minister for Foreign Trade and Development Cooperation Lilianne Ploumen has announced plans to assist developing countries in the collection of taxes. Further, existing tax treaties will be examined to assess the effects of the accords on tax revenues in developing countries.
Family trusts face greater scrutiny from banks when New Zealand's anti-money laundering law comes into force next June interest .co .nz
Dec 19 - "New Zealand's reputation has also taken a hit from a long list of New Zealand registered companies, often so-called offshore finance companies, committing crimes overseas."
CHART: The Global Corporate Tax Rate Plummeted In The Last Decade Think Progress
Dec 19 - Countering a conservative myth that corporations suffer from too-high taxes, a Deutsche Bank report illustrates how the global effective corporate tax rate has dropped significantly in the past decade.
Vietnam: Many foreign firms under tax evasion question vietnamnet
Dec 13 - Reporting on challenges faced by Vietnam with transfer pricing. Cites as one example: "Coming to Vietnam in 1993, Coca Cola has continuously invested in production expansion; its revenue growth is always strong, but the tax agency said they have not collected any coin of taxes from the company."
U.S.: 515 Groups Send Letters to White House & Congress Americans for Tax Fairness
Dec 20 - A letter sent to President Barack Obama and Capitol Hill in support of revenue-positive changes to the corporate tax code and to voice strong opposition to a territorial tax system.
In Russia, unheeded cries of corruption Reuters
Dec 18 - On challenges of journalists reporting on corruption in Russia. Cites President Barack Obama signing into law the so-called Magnitsky Act, which will deny visas to Russia officials thought to be connected with the violent death in jail of Sergei Magnitsky, a lawyer pursuing a state-level tax fraud.
UK: Revenue & Customs offers deal on tax avoidance sheltering £3.5bn Guardian
Dec 20 - "HM Revenue & Customs is to write to some of Britain's wealthiest bankers, hedge fund managers and celebrities offering a chance to settle income tax avoidance schemes estimated to have sheltered more than £3.5bn through film financing structures and other tax-motivated partnerships."
UBS Traders' 'Humongous' Libor-Fixing Boasts CNBC
Dec 19 - On the shocking content of emails and instant messaging by UBS traders involved in rigging Libor, released by The U.K.'s Financial Services Authority.
Tax avoidance could earn you a seat in the Lords Farmers Weekly
Dec 20 - An amusing account, by an English farmer, of a tax strategy structured via his "farming holding company "Carrbucks" registered in the little-known Caribbean atoll of "Amoral"".
December Taxcast
To contact us Click HERE
In December’s Taxcast from the Tax Justice Network: Banks – too big to fail and now too big to prosecute? Thanks but no thanks to Starbucks cynical offer to pay some corporation tax after all, and we discuss a new system rating corporate tax responsibility for consumers that will be out in 2013. And – how we can reform our tax system to stop abuse.
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Links Dec 27
To contact us Click HERE
Facebook paid £2.9m tax on £840m profits made outside US, figures show Guardian
Dec 23 - Facebook channelled the bulk of its profits through Ireland and on to the Cayman Islands. Facebook Ireland made "gross 2011 profits of £840m – or £3.1m per each of its 287 staff. Despite the high gross profit, Facebook Ireland was able to cut its tax bill to just €3.2m by using an accounting technique called the "Double Irish"."
Ireland, US Reach FATCA Deal Tax-News
Dec 27 - "The agreement provides that Irish financial institutions will report to the Irish Revenue Commissioners in respect of US account-holders. In exchange, US financial institutions will be required to report to the IRS in respect of any Irish-resident account-holders. This information will then be automatically exchanged by the two tax authorities on an annual basis."
Swiss Bankers Welcome Enhanced Due Diligence Measures Tax-News
Dec 27 - The Federal Department of Finance commented: “With the planned implementation of the revised recommendations of the Financial Action Task Force (FATF), serious tax offences will be qualified as predicate offences for money laundering in future. In the event that they suspect money laundering, financial intermediaries should also report these cases to the Money Laundering Reporting Office Switzerland.”
Greece: Tax evasion scrutinized Kathimerini
Dec 26 - "Greece’s two financial prosecutors are expected to confirm by the end of the week whether the latest version of the so-called Lagarde list of Greeks who had deposits at the Geneva branch of HSBC is the same as the one they had been investigating over the last few weeks."
See also:
Greece not doing enough to fight tax dodgers, say EU and IMF The Telegraph
Dec 24 - "Greece's drive to crack down on tax evasion risks "falling idle" and must be reinvigorated, a report by the European Union and International Monetary Fund said on Monday."
Kabul blames tax evasion on "foreign" firms Deutsche Welle
Dec 24 - "The Afghan finance ministry has accused some NATO-linked foreign companies of "running away" from paying taxes. This follows a claim by President Hamid Karzai that corruption is his country is "imposed" from outside."
How to derail the corporate tax evasion gravy train Digital Journal
Dec 25 - " The legislators have apparently taken the “Wild West/no laws” myth of online transactions much too literally and put tax evasion in the too hard basket."
Young Swiss market liberals hail Depardieu's tax move France 24
Dec 23 - "Members of the youth section of the Swiss Liberal Party (PLR) have written to French actor Gerard Depardieu inviting him to Switzerland if things don't work out in Belgium. Their letter, published in the Internet edition of the daily paper Le Matin, congratulated him for having fled increased taxes in France."
Ukraine reminds Santas about tax Reuters
Dec 26 - "Cash-strapped Ukraine on Wednesday reminded entertainers making money by posing as Did Moroz - the local version of Santa Claus - and his helpers to pay income tax."
Dec 23 - Facebook channelled the bulk of its profits through Ireland and on to the Cayman Islands. Facebook Ireland made "gross 2011 profits of £840m – or £3.1m per each of its 287 staff. Despite the high gross profit, Facebook Ireland was able to cut its tax bill to just €3.2m by using an accounting technique called the "Double Irish"."
Ireland, US Reach FATCA Deal Tax-News
Dec 27 - "The agreement provides that Irish financial institutions will report to the Irish Revenue Commissioners in respect of US account-holders. In exchange, US financial institutions will be required to report to the IRS in respect of any Irish-resident account-holders. This information will then be automatically exchanged by the two tax authorities on an annual basis."
Swiss Bankers Welcome Enhanced Due Diligence Measures Tax-News
Dec 27 - The Federal Department of Finance commented: “With the planned implementation of the revised recommendations of the Financial Action Task Force (FATF), serious tax offences will be qualified as predicate offences for money laundering in future. In the event that they suspect money laundering, financial intermediaries should also report these cases to the Money Laundering Reporting Office Switzerland.”
Greece: Tax evasion scrutinized Kathimerini
Dec 26 - "Greece’s two financial prosecutors are expected to confirm by the end of the week whether the latest version of the so-called Lagarde list of Greeks who had deposits at the Geneva branch of HSBC is the same as the one they had been investigating over the last few weeks."
See also:
Greece not doing enough to fight tax dodgers, say EU and IMF The Telegraph
Dec 24 - "Greece's drive to crack down on tax evasion risks "falling idle" and must be reinvigorated, a report by the European Union and International Monetary Fund said on Monday."
Kabul blames tax evasion on "foreign" firms Deutsche Welle
Dec 24 - "The Afghan finance ministry has accused some NATO-linked foreign companies of "running away" from paying taxes. This follows a claim by President Hamid Karzai that corruption is his country is "imposed" from outside."
How to derail the corporate tax evasion gravy train Digital Journal
Dec 25 - " The legislators have apparently taken the “Wild West/no laws” myth of online transactions much too literally and put tax evasion in the too hard basket."
Young Swiss market liberals hail Depardieu's tax move France 24
Dec 23 - "Members of the youth section of the Swiss Liberal Party (PLR) have written to French actor Gerard Depardieu inviting him to Switzerland if things don't work out in Belgium. Their letter, published in the Internet edition of the daily paper Le Matin, congratulated him for having fled increased taxes in France."
Ukraine reminds Santas about tax Reuters
Dec 26 - "Cash-strapped Ukraine on Wednesday reminded entertainers making money by posing as Did Moroz - the local version of Santa Claus - and his helpers to pay income tax."
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.
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.
20 Aralık 2012 Perşembe
Seasons Greetings from TJN-USA
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Regards and Season's Greetings.Let's start by opening the presents.Given your interest in tax justice issues, we at TJN-USA thought you might be interested in a totally free link to a 56 minute version of the award-winning Sundance documentary"We're Not Broke" -- the leading film about corp tax dodging and the role of tax activism in the Occupy movement. After nearly a year of box office distribution, in the interests of having a wider impact, the film makers have generously offered to make the film freely available, to get as many people as possible at home and abroad to see it. SO HERE IT IS! Password: 56min2012Please feel free to share widely with your friends and interested organizations. (We have found that the film works very well as an occasion for discussion and panels about tax fairness, and would be happy to share our knowledge of that, if it is iPod interest.)
NOW FOR THE BAD REASON -- and the reason why getting this film seen by as many people as possible right now may be so important.Today's word from DC is this: in the urge to cut a fiscal cliff deal w the Republicans in Congress, Obama MAY WELL BE turning to his corporate cronies, and quietly negotiating a corp tax deal that will slash US nominal corp tax rates, or even move toward a territorial tax, plus permit Repatriation of accumulated offshore profits at ultra low rates. This would undoubtedly really please big TNCs like Honeywell, JP Morgan, Exelon, and GE. But it would be DISASTROUS for global and local tax justice, for many reasons. Notably: 1. It would further discriminate against small biz, over half of whom are taxed as partnerships/ LLCs or Sub- S corps, and also don't make use of sophisticated structures like offshoring intellectual property or passive service companies. Indeed, their taxes will actually going up next year, because they are taxed at individual rates. 2. It would look the other way at the fact that one key source for the $1.6 trillion of corp profits now parked offshore has been the highly dubious offshoring of IP to low tax jurisdiction like Bermuda and Ireland by firms like GE, Pfizer, Apple, and Google -- to the tune of $70 b per year of lost US tax revenue. This high- tech dodging, which has exploded in the last decade, is largely responsible for the fact that the US corp tax is at an all time low, in terms not only of EFFECTIVE average tax rates but also revenue generation. Since many states tie their corp income taxes to the federal system, this is also having a negative effect at that level. 3. In terms of ending destructive global " tax competition" -- the destructive economic arms race that began in the 1980s, this is precisely the wrong move. Back in January, we saw Canada slash its federal corp tax rate to 15%; the UK soon followed with a cut to 21%. The EU's beleaguered economies are under pressure to follow suit. If the US -- still by far the world's largest economy, with by far the most significant TNCs -- now joins the race, the prospects for ending this arms race -- let alone reforms like country-by-county reporting, transfer pricing reform, or global unitary taxation -- will be very dim indeed. 4. In terms of the impact on developing countries, even big players like China and India have found it difficult to keep up with TNCs ability to move profits beyond the reach of taxes -- let alone poor countries, some of which are actually seeing companies demand NEGATIVE corp tax rates, after subsidies and forgiveness schemes are considered, in order to invest in them. The impending US corp tax gutting, widely described in the MSM as a " reform, " would only exacerbate this problem. In short: i really hope that i am wrong. But it may well be the case that in the next few days and weeks, behind closed doors, the Obama Administration caves in to the business lobby and "seals the deal" on the US fiscal cliff by giving away the store on all these corp tax issues that are really CENTRAL to our whole tax justice agenda. NOW, what can we do about it? As usual, the first step is education. So watch the film, and then connect up with US tax activists like Citizens for Tax Justice, TJN-US, and Americans for Fair Taxes (/TaxFairness) that are leading the opposition on the ground in DC. Second, lets have a discussion about getting other grass roots organizations with an interest in these issues involved. Third, Of course those of us who are journalists or self styled pundits should be writing and tweeting and digging. THIS IS CLEARLY A SITUATION THAT NEEDS MORE PUBLIC AWARENESS -- as well as public hearings. Finally, here in the US, some may even want to call their Congressperson or Senator about this. Or organize the kind of mass protests that have proved so catalytic in the UK. ANY OTHER IDEAS? This is an opportunity as well as an emergency. I know it is Christmas/ etc. but that's kind of a blessing. Yours in solidarity, Jim HenryTJN
Regards and Season's Greetings.Let's start by opening the presents.Given your interest in tax justice issues, we at TJN-USA thought you might be interested in a totally free link to a 56 minute version of the award-winning Sundance documentary"We're Not Broke" -- the leading film about corp tax dodging and the role of tax activism in the Occupy movement. After nearly a year of box office distribution, in the interests of having a wider impact, the film makers have generously offered to make the film freely available, to get as many people as possible at home and abroad to see it. SO HERE IT IS! Password: 56min2012Please feel free to share widely with your friends and interested organizations. (We have found that the film works very well as an occasion for discussion and panels about tax fairness, and would be happy to share our knowledge of that, if it is iPod interest.)
NOW FOR THE BAD REASON -- and the reason why getting this film seen by as many people as possible right now may be so important.Today's word from DC is this: in the urge to cut a fiscal cliff deal w the Republicans in Congress, Obama MAY WELL BE turning to his corporate cronies, and quietly negotiating a corp tax deal that will slash US nominal corp tax rates, or even move toward a territorial tax, plus permit Repatriation of accumulated offshore profits at ultra low rates. This would undoubtedly really please big TNCs like Honeywell, JP Morgan, Exelon, and GE. But it would be DISASTROUS for global and local tax justice, for many reasons. Notably: 1. It would further discriminate against small biz, over half of whom are taxed as partnerships/ LLCs or Sub- S corps, and also don't make use of sophisticated structures like offshoring intellectual property or passive service companies. Indeed, their taxes will actually going up next year, because they are taxed at individual rates. 2. It would look the other way at the fact that one key source for the $1.6 trillion of corp profits now parked offshore has been the highly dubious offshoring of IP to low tax jurisdiction like Bermuda and Ireland by firms like GE, Pfizer, Apple, and Google -- to the tune of $70 b per year of lost US tax revenue. This high- tech dodging, which has exploded in the last decade, is largely responsible for the fact that the US corp tax is at an all time low, in terms not only of EFFECTIVE average tax rates but also revenue generation. Since many states tie their corp income taxes to the federal system, this is also having a negative effect at that level. 3. In terms of ending destructive global " tax competition" -- the destructive economic arms race that began in the 1980s, this is precisely the wrong move. Back in January, we saw Canada slash its federal corp tax rate to 15%; the UK soon followed with a cut to 21%. The EU's beleaguered economies are under pressure to follow suit. If the US -- still by far the world's largest economy, with by far the most significant TNCs -- now joins the race, the prospects for ending this arms race -- let alone reforms like country-by-county reporting, transfer pricing reform, or global unitary taxation -- will be very dim indeed. 4. In terms of the impact on developing countries, even big players like China and India have found it difficult to keep up with TNCs ability to move profits beyond the reach of taxes -- let alone poor countries, some of which are actually seeing companies demand NEGATIVE corp tax rates, after subsidies and forgiveness schemes are considered, in order to invest in them. The impending US corp tax gutting, widely described in the MSM as a " reform, " would only exacerbate this problem. In short: i really hope that i am wrong. But it may well be the case that in the next few days and weeks, behind closed doors, the Obama Administration caves in to the business lobby and "seals the deal" on the US fiscal cliff by giving away the store on all these corp tax issues that are really CENTRAL to our whole tax justice agenda. NOW, what can we do about it? As usual, the first step is education. So watch the film, and then connect up with US tax activists like Citizens for Tax Justice, TJN-US, and Americans for Fair Taxes (/TaxFairness) that are leading the opposition on the ground in DC. Second, lets have a discussion about getting other grass roots organizations with an interest in these issues involved. Third, Of course those of us who are journalists or self styled pundits should be writing and tweeting and digging. THIS IS CLEARLY A SITUATION THAT NEEDS MORE PUBLIC AWARENESS -- as well as public hearings. Finally, here in the US, some may even want to call their Congressperson or Senator about this. Or organize the kind of mass protests that have proved so catalytic in the UK. ANY OTHER IDEAS? This is an opportunity as well as an emergency. I know it is Christmas/ etc. but that's kind of a blessing. Yours in solidarity, Jim HenryTJN
Links Dec 20
To contact us Click HERE
Failure to Count Uncounted
Dec 17 - Alex Cobham reports from the conference of the DFID-funded International Centre for Tax and Development in Cape Town. This "brings together researchers from around the world to work on various research themes – including tax havens and corporate tax shenanigans, and of course an effort to generate improved data… All the presentations are now available, including some intriguing insights into the difficulties faced by African revenue authorities. Too much is uncounted, here too."
Vale settles Brazil, Swiss tax cases, to take Q4 charge Reuters
Dec 19 - "Brazil's Vale SA, the world's second-largest mining company, settled tax disputes in Switzerland and Brazil ... Vale agreed to pay 212 million Swiss francs ($232 million) to the Swiss federal government, and 663 million reais ($317 million) to the government of Brazil's Minas Gerais state."
Senegal sees 2013 mining revenue tax earnings at $30m mineweb
Dec 17 - Senegal is seeking to boost money it collects from the growing mining industry. The budget document handed to reporters at the 14 December National Assembly said “The mining sector makes a very weak contribution to the budget of the state”.
Zambia: State to Probe Siphoned K40 Trillion allAfrica
Dec 20 - "Government will institute investigations into reports that the country lost a shocking K40 trillion from 2000 to 2010 in tax evasion and corruption, mainly in the mining sector." See also: Clip Tax Evasion Now!
EU lets Catholic Church off its billion-euro tax bill The Independent
Dec 19 - "The Vatican has received a generous early Christmas present from European Union chiefs with the announcement that illegal tax exemption from 2006 to 2011, which saved the Catholic Church billions of euros, will not have to be paid back." Hat tip Offshore Watch.
Cayman Islands: Premier Is Named to Replace Ousted Predecessor New York Times
Dec 19 - "The governor of the Cayman Islands on Wednesday appointed Juliana O’Connor-Connolly as the new premier of the British territory. The former premier, W. McKeeva Bush, was ousted Tuesday by the Legislative Assembly, a week after his arrest in a corruption investigation." See our recent post Cayman Islands Premier arrested in corruption probe
"The Friends of bank secrecy" in retreat NZZ (In German)
Dec 19 - Following a meeting by Swiss President Eveline Widmer-Schlumpf with Luxembourg Prime Minister Jean-Claude Juncker and Finance Minister Luc Frieden, the report notes the initialling of a FATCA agreement with the U.S. by Switzerland, and Luxembourg's intent to enter FATCA negotiations in 2013. A spokeswoman for EU Tax Commissioner Algirdas Šemeta is reported as saying that since Switzerland is a close neighbor with a special access to the single market, one would expect Switzerland to show to the EU an "equivalent openness" as that shown to the U.S.
US charges three Swiss bankers in offshore account case Reuters
Dec 19 - "Three Swiss bankers accused of conspiring with American clients to hide more than $420 million from the tax-collecting U.S. Internal Revenue Service were indicted, the U.S. Attorney's Office in Manhattan said on Wednesday." The bank was not named.
Media shake heads and point fingers at UBS swissinfo
Dec 20 - "Thursday brought more bad press for Swiss bank UBS in the form of critical editorials as well as the news that two former traders were arrested in New York on Wednesday". Zurich based Tages-Anzeiger pointed out, “Anybody curious to know where there is smoke or fire at the bank need only glance at the annual report – at the very back of which is a list of pending legal processes around the world.”
UBS Libor Scandal: Should Taxpayers Have to Pay for Bank Wrongdoing? U.S. PIRG
Dec 18 - Following news reports that UBS will soon reach a settlement with regulators over its role in the Libor scandal, U.S. PIRG is calling on the federal government to bar the bank from pushing hundreds of millions of dollars in costs onto taxpayers by writing off the settlement payment as a tax deduction. A 2012 report by U.S. PIRG on the tax deductibility of costs from corporate wrongdoing can be found here.
Did Obama and Cameron Require HSBC to Aid the Prosecution of Tax Frauds? Huffington Post
Dec 18 - William K. Black asks the question: "as part of the HSBC settlement, did Obama and Cameron's officials require HSBC to blow the whistle on tax frauds? Did they require HSBC to provide them with a full intelligence briefing on how the networks of tax evasion and tax havens function?"
Big Banks Flunk OCC Risk Tests American Banker
Dec 13 - "The Office of the Comptroller of the Currency recently graded the 19 largest national banks on five factors designed to gauge how well they are being run. The results are startling."
Corporate tax breaks in the mix The Hill
Dec 19 - reports, "Tax hikes for millionaires and Social Security cuts for grannies. Those two divisive issues have dominated media coverage of the “fiscal cliff” debate. But now President Obama is hinting that corporate tax breaks might be in the mix."
Malta Holding Companies Review 2012/13 Tax-News
Nov 20 - "Malta, like Cyprus, has been obliged to dismantle its old 'offshore' companies regime as a trade-off for joining the European Union." The piece notes: "with investment-friendly government policies and some interesting tax planning opportunities, Malta remains one of the most favourable places in the EU in which to locate an international holding company."
Dec 17 - Alex Cobham reports from the conference of the DFID-funded International Centre for Tax and Development in Cape Town. This "brings together researchers from around the world to work on various research themes – including tax havens and corporate tax shenanigans, and of course an effort to generate improved data… All the presentations are now available, including some intriguing insights into the difficulties faced by African revenue authorities. Too much is uncounted, here too."
Vale settles Brazil, Swiss tax cases, to take Q4 charge Reuters
Dec 19 - "Brazil's Vale SA, the world's second-largest mining company, settled tax disputes in Switzerland and Brazil ... Vale agreed to pay 212 million Swiss francs ($232 million) to the Swiss federal government, and 663 million reais ($317 million) to the government of Brazil's Minas Gerais state."
Senegal sees 2013 mining revenue tax earnings at $30m mineweb
Dec 17 - Senegal is seeking to boost money it collects from the growing mining industry. The budget document handed to reporters at the 14 December National Assembly said “The mining sector makes a very weak contribution to the budget of the state”.
Zambia: State to Probe Siphoned K40 Trillion allAfrica
Dec 20 - "Government will institute investigations into reports that the country lost a shocking K40 trillion from 2000 to 2010 in tax evasion and corruption, mainly in the mining sector." See also: Clip Tax Evasion Now!
EU lets Catholic Church off its billion-euro tax bill The Independent
Dec 19 - "The Vatican has received a generous early Christmas present from European Union chiefs with the announcement that illegal tax exemption from 2006 to 2011, which saved the Catholic Church billions of euros, will not have to be paid back." Hat tip Offshore Watch.
Cayman Islands: Premier Is Named to Replace Ousted Predecessor New York Times
Dec 19 - "The governor of the Cayman Islands on Wednesday appointed Juliana O’Connor-Connolly as the new premier of the British territory. The former premier, W. McKeeva Bush, was ousted Tuesday by the Legislative Assembly, a week after his arrest in a corruption investigation." See our recent post Cayman Islands Premier arrested in corruption probe
"The Friends of bank secrecy" in retreat NZZ (In German)
Dec 19 - Following a meeting by Swiss President Eveline Widmer-Schlumpf with Luxembourg Prime Minister Jean-Claude Juncker and Finance Minister Luc Frieden, the report notes the initialling of a FATCA agreement with the U.S. by Switzerland, and Luxembourg's intent to enter FATCA negotiations in 2013. A spokeswoman for EU Tax Commissioner Algirdas Šemeta is reported as saying that since Switzerland is a close neighbor with a special access to the single market, one would expect Switzerland to show to the EU an "equivalent openness" as that shown to the U.S.
US charges three Swiss bankers in offshore account case Reuters
Dec 19 - "Three Swiss bankers accused of conspiring with American clients to hide more than $420 million from the tax-collecting U.S. Internal Revenue Service were indicted, the U.S. Attorney's Office in Manhattan said on Wednesday." The bank was not named.
Media shake heads and point fingers at UBS swissinfo
Dec 20 - "Thursday brought more bad press for Swiss bank UBS in the form of critical editorials as well as the news that two former traders were arrested in New York on Wednesday". Zurich based Tages-Anzeiger pointed out, “Anybody curious to know where there is smoke or fire at the bank need only glance at the annual report – at the very back of which is a list of pending legal processes around the world.”
UBS Libor Scandal: Should Taxpayers Have to Pay for Bank Wrongdoing? U.S. PIRG
Dec 18 - Following news reports that UBS will soon reach a settlement with regulators over its role in the Libor scandal, U.S. PIRG is calling on the federal government to bar the bank from pushing hundreds of millions of dollars in costs onto taxpayers by writing off the settlement payment as a tax deduction. A 2012 report by U.S. PIRG on the tax deductibility of costs from corporate wrongdoing can be found here.
Did Obama and Cameron Require HSBC to Aid the Prosecution of Tax Frauds? Huffington Post
Dec 18 - William K. Black asks the question: "as part of the HSBC settlement, did Obama and Cameron's officials require HSBC to blow the whistle on tax frauds? Did they require HSBC to provide them with a full intelligence briefing on how the networks of tax evasion and tax havens function?"
Big Banks Flunk OCC Risk Tests American Banker
Dec 13 - "The Office of the Comptroller of the Currency recently graded the 19 largest national banks on five factors designed to gauge how well they are being run. The results are startling."
Corporate tax breaks in the mix The Hill
Dec 19 - reports, "Tax hikes for millionaires and Social Security cuts for grannies. Those two divisive issues have dominated media coverage of the “fiscal cliff” debate. But now President Obama is hinting that corporate tax breaks might be in the mix."
Malta Holding Companies Review 2012/13 Tax-News
Nov 20 - "Malta, like Cyprus, has been obliged to dismantle its old 'offshore' companies regime as a trade-off for joining the European Union." The piece notes: "with investment-friendly government policies and some interesting tax planning opportunities, Malta remains one of the most favourable places in the EU in which to locate an international holding company."
Rahm's real fight
To contact us Click HERE
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.
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.
12/16/2012
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On Friday evening, I hugged my 10-year-old son and I told him that I loved him. It was not a different greeting or hug than I had given him before, nor was it planned based on the circumstances that had transpired so tragically earlier. But it had a certain significance on a day where the parents of 20 children in Newton, CT would not be given the same opportunity ever again.
It is even sadder that some of the so-called adults in our country chose to act childish in their reaction to this tragedy. I witnessed a caustic discussion on Facebook where the compassion that usually unites us was thrown out and the insults over political affiliation and philosophy began. It amazes me that so-called political leaders want to make public policy in a reactionary mode when many of us that have served predicted this day would come and tried to be pro-active about it. But I will finish that thought later.
On Saturday morning, I attended a breakfast sponsored by the non-profit I had the privilege of being President of the Board for the last two years. Our organization, Mississippi Families for Kids, helps children in Mississippi find families to be adopted into. When asked to address the group, I reminded them that they did the right thing in becoming an adoptive parent. Fear often deters people from becoming parents, whether naturally or through adoption. Fear about days like December 14, 2012; July 12, 2012; February 26, 2012; April 16, 2007; April 20, 1999; October 1, 1997. The fear that when you send your child to school, to the store or allow them to hang out with friends something will happen to them. Those of us of the Christian faith are constantly admonished to disregard fear and rely on our faith. Our faith that a hedge of protection will remain around them. Our faith in our ability as parents to teach right from wrong and how to avoid trouble. It is our faith that gets us through those moments when our children are in the care of someone else.
It took a lot to hold back the tears and deliver the message, for everywhere I looked there were children. Smiling. Fidgeting. Waiting in anticipation to take their picture with Santa. It was a good day for those involved. But of course, the thoughts go back to the parents that will have a quieter Christmas than before in Connecticut and throughout the country. This event has hit us hard because we have never seen anything like this in our country. But children have been dying in our country to senseless violence for years. Unfortunately, we have been desensitized to it because of the frequency we see on a daily and yearly basis, especially in this advanced information age. Hopefully, this tragedy will shock us back to the notion that no child should ever be gunned down, no matter what neighborhood or economic class or ethnicity they came from. That every loss of a child is painful, whether it makes the nightly news or not.
With that being said, I have to point this out: I have been a financial member of the National Rifle Association. I am a proponent of the Second Amendment. I have a earned an A rating from the NRA on my public policy stances. I have also earned an F rating from the same organization when I broke away from them on public policy stances. Now that I have disclosed this, it is incumbent for me to say emphatically the killing of innocent children is not what the Founding Fathers intended when they drafted and ratified the Second Amendment.
The challenge is how to protect a society where it is the constitutional right of every citizen to bear arms. The mother of the Newton, CT shooter legally owned the guns that were used in the killing spree, herself being the first victim. No gun control law could have stopped that, other than the assault rifle ban on just one of the weapons. We have laws that ban guns from schools, but that did not deter the shooter in this case because he knew there was no authority figure present that could effectively enforce it.
So what to do? Ideally, the NRA has to yield its position of no compromise. Since that will not happen with the current leadership in place, elected officials have to take their hits like I did and support reasonable legislation to moderate gun violence in this country. The stance I received the F for was the opposition to repealing the law that ammunition purchases can be recorded and reported to our Department of Public Safety. I was reminded during the debate that the laws was designed to keep track of how many bullets Blacks were buying during the post-Reconstruction era. I countered by saying since 9-11, things that were designed with bad intentions should now be considered good public policy as an added deterrent to mass mayhem. If a killer can make the effort to execute his plans, what gives us the right to be too lazy not to use all the tools necessary to protect our citizens?
Then the next argument comes: People kill people, not guns per se. That is a true statement, because before the Chinese invented the method using gunpowder to fire projectiles out of a cannon to drive back the Mongols, people were killing each other. So let us deal with the people. Every citizen in the United States has the right to vote when they reach a certain age, however they can forfeit that right with conduct constituting moral turpitude. The gun laws in existence supposedly follow that same guideline. So where is the problem? The mental state of the people.
This young man who committed this act was documented to have mental health issues. The football player who recently killed the mother of his 3-month-old child and himself was in counseling prior to the incident. Yet they had easy access to weapons of destruction. At some point in the discussion, a reasonable compromise concerning access to guns by people with mental challenges, temporary and permanent, must be obtained. No piece of legislation has been effective in eradicating anything, especially dealing with the character of mankind, but it always has the possibility of minimizing future damage and harm, which has been effective in maintaining an orderly society. That possibility makes the effort worthwhile.
The last thing I want to address is this ridiculous notion that no prayer in school is the reason why this is happening. The concept is that since you cannot pray in school, then God is not in the school. First, there no law saying that prayer from any faith is banned from school. The school cannot tell you how to pray or what prayer to pray, and in a free society that is the just thing to do. Second, if you profess to be a Christian and truly believe that God is not omnipresent, then you are not a member of the Christian faith I was brought up in and still adhere to. Of all the dates aforementioned, hundreds of people survived, by the grace of God.
Those who truly understand our faith know that Satan, the fallen angel, fell to Earth and laid claimed that the Earth was his dominion. Therefore calamity strikes because his mission is to kill and destroy those that follow God, i.e. the high school student in Columbine that professed her faith to the killer before being shot or the teacher in Newport that stood outside the closet and sacrificed herself so her students would not be harmed. But we were put on this Earth, by God, to have dominion over all the things living, naturally and supernaturally, on Earth, including Satan himself. Only man can reason and constantly adapt and evolve. Only man can summon God through prayer. Only man has the same power that raised Jesus Christ from the dead dwelling inside of them.
When Flip Wilson coined the phrase, "the devil made me do it," it was meant to be a joke, not an excuse for our behavior or lack of faith. Therefore, since we are the ones in charge of carrying out God's will on Earth, then we should do so with all the power and ability God gave unto us. We can find a way to protect our children from senseless violence. We can find a way to compassionately and effectively treat mental illness. We can overcome evil in this world.
If we truly want to honor:
Charlotte Bacon, 6Daniel Barden, 7Rachel Davino, 29Olivia Engel, 6Josephine Gay, 7Ana Marquez-Greene, 6Dylan Hockley, 6Dawn Hochsprung, 47Madeleine Hsu, 6Catherine Hubbard, 6Chase Kowalski, 7Jesse Lewis, 6James Mattioli, 6Grace McDonnell, 7Anne Marie Murphy, 52Emilie Parker, 6Jack Pinto, 6Noah Pozner, 6Caroline Previdi, 6Jessica Rekos, 6Avielle Richman, 6Lauren Rousseau, 30Mary Sherlach, 56Victoria Soto,27Benjamin Wheeler, 6Allison Wyatt, 6 ;
then we must adhere to our faith, show no fear, love unconditionally, live abundantly, walk humbly, offer compassion and fight the good fight in the way God would want us to.
On Friday evening, I hugged my 10-year-old son and I told him that I loved him. It was not a different greeting or hug than I had given him before, nor was it planned based on the circumstances that had transpired so tragically earlier. But it had a certain significance on a day where the parents of 20 children in Newton, CT would not be given the same opportunity ever again.
It is even sadder that some of the so-called adults in our country chose to act childish in their reaction to this tragedy. I witnessed a caustic discussion on Facebook where the compassion that usually unites us was thrown out and the insults over political affiliation and philosophy began. It amazes me that so-called political leaders want to make public policy in a reactionary mode when many of us that have served predicted this day would come and tried to be pro-active about it. But I will finish that thought later.
On Saturday morning, I attended a breakfast sponsored by the non-profit I had the privilege of being President of the Board for the last two years. Our organization, Mississippi Families for Kids, helps children in Mississippi find families to be adopted into. When asked to address the group, I reminded them that they did the right thing in becoming an adoptive parent. Fear often deters people from becoming parents, whether naturally or through adoption. Fear about days like December 14, 2012; July 12, 2012; February 26, 2012; April 16, 2007; April 20, 1999; October 1, 1997. The fear that when you send your child to school, to the store or allow them to hang out with friends something will happen to them. Those of us of the Christian faith are constantly admonished to disregard fear and rely on our faith. Our faith that a hedge of protection will remain around them. Our faith in our ability as parents to teach right from wrong and how to avoid trouble. It is our faith that gets us through those moments when our children are in the care of someone else.
It took a lot to hold back the tears and deliver the message, for everywhere I looked there were children. Smiling. Fidgeting. Waiting in anticipation to take their picture with Santa. It was a good day for those involved. But of course, the thoughts go back to the parents that will have a quieter Christmas than before in Connecticut and throughout the country. This event has hit us hard because we have never seen anything like this in our country. But children have been dying in our country to senseless violence for years. Unfortunately, we have been desensitized to it because of the frequency we see on a daily and yearly basis, especially in this advanced information age. Hopefully, this tragedy will shock us back to the notion that no child should ever be gunned down, no matter what neighborhood or economic class or ethnicity they came from. That every loss of a child is painful, whether it makes the nightly news or not.
With that being said, I have to point this out: I have been a financial member of the National Rifle Association. I am a proponent of the Second Amendment. I have a earned an A rating from the NRA on my public policy stances. I have also earned an F rating from the same organization when I broke away from them on public policy stances. Now that I have disclosed this, it is incumbent for me to say emphatically the killing of innocent children is not what the Founding Fathers intended when they drafted and ratified the Second Amendment.
The challenge is how to protect a society where it is the constitutional right of every citizen to bear arms. The mother of the Newton, CT shooter legally owned the guns that were used in the killing spree, herself being the first victim. No gun control law could have stopped that, other than the assault rifle ban on just one of the weapons. We have laws that ban guns from schools, but that did not deter the shooter in this case because he knew there was no authority figure present that could effectively enforce it.
So what to do? Ideally, the NRA has to yield its position of no compromise. Since that will not happen with the current leadership in place, elected officials have to take their hits like I did and support reasonable legislation to moderate gun violence in this country. The stance I received the F for was the opposition to repealing the law that ammunition purchases can be recorded and reported to our Department of Public Safety. I was reminded during the debate that the laws was designed to keep track of how many bullets Blacks were buying during the post-Reconstruction era. I countered by saying since 9-11, things that were designed with bad intentions should now be considered good public policy as an added deterrent to mass mayhem. If a killer can make the effort to execute his plans, what gives us the right to be too lazy not to use all the tools necessary to protect our citizens?
Then the next argument comes: People kill people, not guns per se. That is a true statement, because before the Chinese invented the method using gunpowder to fire projectiles out of a cannon to drive back the Mongols, people were killing each other. So let us deal with the people. Every citizen in the United States has the right to vote when they reach a certain age, however they can forfeit that right with conduct constituting moral turpitude. The gun laws in existence supposedly follow that same guideline. So where is the problem? The mental state of the people.
This young man who committed this act was documented to have mental health issues. The football player who recently killed the mother of his 3-month-old child and himself was in counseling prior to the incident. Yet they had easy access to weapons of destruction. At some point in the discussion, a reasonable compromise concerning access to guns by people with mental challenges, temporary and permanent, must be obtained. No piece of legislation has been effective in eradicating anything, especially dealing with the character of mankind, but it always has the possibility of minimizing future damage and harm, which has been effective in maintaining an orderly society. That possibility makes the effort worthwhile.
The last thing I want to address is this ridiculous notion that no prayer in school is the reason why this is happening. The concept is that since you cannot pray in school, then God is not in the school. First, there no law saying that prayer from any faith is banned from school. The school cannot tell you how to pray or what prayer to pray, and in a free society that is the just thing to do. Second, if you profess to be a Christian and truly believe that God is not omnipresent, then you are not a member of the Christian faith I was brought up in and still adhere to. Of all the dates aforementioned, hundreds of people survived, by the grace of God.
Those who truly understand our faith know that Satan, the fallen angel, fell to Earth and laid claimed that the Earth was his dominion. Therefore calamity strikes because his mission is to kill and destroy those that follow God, i.e. the high school student in Columbine that professed her faith to the killer before being shot or the teacher in Newport that stood outside the closet and sacrificed herself so her students would not be harmed. But we were put on this Earth, by God, to have dominion over all the things living, naturally and supernaturally, on Earth, including Satan himself. Only man can reason and constantly adapt and evolve. Only man can summon God through prayer. Only man has the same power that raised Jesus Christ from the dead dwelling inside of them.
When Flip Wilson coined the phrase, "the devil made me do it," it was meant to be a joke, not an excuse for our behavior or lack of faith. Therefore, since we are the ones in charge of carrying out God's will on Earth, then we should do so with all the power and ability God gave unto us. We can find a way to protect our children from senseless violence. We can find a way to compassionately and effectively treat mental illness. We can overcome evil in this world.
If we truly want to honor:
Charlotte Bacon, 6Daniel Barden, 7Rachel Davino, 29Olivia Engel, 6Josephine Gay, 7Ana Marquez-Greene, 6Dylan Hockley, 6Dawn Hochsprung, 47Madeleine Hsu, 6Catherine Hubbard, 6Chase Kowalski, 7Jesse Lewis, 6James Mattioli, 6Grace McDonnell, 7Anne Marie Murphy, 52Emilie Parker, 6Jack Pinto, 6Noah Pozner, 6Caroline Previdi, 6Jessica Rekos, 6Avielle Richman, 6Lauren Rousseau, 30Mary Sherlach, 56Victoria Soto,27Benjamin Wheeler, 6Allison Wyatt, 6 ;
then we must adhere to our faith, show no fear, love unconditionally, live abundantly, walk humbly, offer compassion and fight the good fight in the way God would want us to.
16 Aralık 2012 Pazar
Links Dec 13
To contact us Click HERE
German-Swiss tax deal sinks at last-ditch meeting swissinfo
Dec 12 - Excellent news. "Representatives from both chambers of Germany’s parliament have failed to reach an agreement on a German-Swiss tax accord, effectively ending any chance of ratification after the opposition refused to review its position."
Deutsche Bank offices raided amid tax evasion inquiry Guardian
Dec 12 - "Deutsche Bank co-chief executive Jürgen Fitschen has been drawn into a widening tax evasion investigation related to carbon trading at Germany's biggest lender as hundreds of police and tax inspectors raided the bank's offices."
Luxembourg: Luc Frieden - A new era without secrecy Le Quotidien (In French)
Dec 12 - Luxembourg's Minister of Finance says, with regard to Luxembourg's intent to sign an agreement with the U.S. on FATCA, that it will be difficult to avoid automatic exchange of information with European states if that is agreed to with the U.S.. Whilst stating that bank secrecy is over, Frieden asserts that Luxembourg should remain competitive on tax.
Support Argentina in the struggle against Vulture Funds Eurodad
Dec 12 - Diálogo 2000, member of Jubilee South Americas, has released the statement “The real debt is to the rights of the people of Argentina“ in defense of the rights and sovereignty of the people of Argentina in the face of recent vulture funds actions - they are asking for organizational endorsements.
Free Trade Agreement EU – Colombia & Peru: Deregulation, illicit financial flows and money laundering SOMO
Dec 5 - New report, presented at the European Parliament, reveals that with the signature of the Free Trade Agreement (FTA) between the EU, Colombia and Peru, there is a great risk of increased economic instability, tax evasion and even laundering of drug money. See press release here. Hat tip: Markus Henn.
Pakistan politicians engulfed by tax evasion storm Guardian
Dec 12 - "Nearly 70% of Pakistan's politicians, including some of the country's wealthiest people, did not file tax returns last year, according to a report that shines a light on a longstanding problem that reaches to the top of society."
Swiss Hedge Funds Consider Relocating to Liechtenstein, PwC says Bloomberg
Dec 12 - Swiss hedge fund managers trying to sidestep tougher regulations. "Switzerland has amended legislation to mirror the EU’s Alternative Investment Fund Managers Directive, tightening risk, compliance and auditing standards and increasing fund transparency. Managers from countries that don’t pass equivalent laws won’t be able to market to EU investors." Hat tip: Offshore Alert.
U.S.: Emerging Fiscal Cliff Deal Spares Corporations, but Not the Safety Net The Nation
Dec 12 - "So step back and take the long view: Obama could easily end up agreeing to a deal that asks corporate America to contribute nothing—revenue-neutrality is the selling point of his corporate tax plan—and could even end up giving them extra benefits. Meanwhile, Americans who rely on the safety net would have to make substantial sacrifice, and moreso if they’re not wealthy."
See also:
Why Is Big Business Supporting Obama? The New Yorker
Dec 12 - On a letter to the President, from the Business Roundtable, on the Need to Avoid the Fiscal Cliff - "I can’t help it. When I see Fortune 500 titans like Rex Tillerson, the chief executive of ExxonMobil, calling for higher taxes on the rich, I suspect there’s something fishy happening ... "
Pennies over patriotism? Stars move to tax havens Almogordo News
Dec 13 - A rundown on some celebrity moves of residence to avoid tax.
Dec 12 - Excellent news. "Representatives from both chambers of Germany’s parliament have failed to reach an agreement on a German-Swiss tax accord, effectively ending any chance of ratification after the opposition refused to review its position."
Deutsche Bank offices raided amid tax evasion inquiry Guardian
Dec 12 - "Deutsche Bank co-chief executive Jürgen Fitschen has been drawn into a widening tax evasion investigation related to carbon trading at Germany's biggest lender as hundreds of police and tax inspectors raided the bank's offices."
Luxembourg: Luc Frieden - A new era without secrecy Le Quotidien (In French)
Dec 12 - Luxembourg's Minister of Finance says, with regard to Luxembourg's intent to sign an agreement with the U.S. on FATCA, that it will be difficult to avoid automatic exchange of information with European states if that is agreed to with the U.S.. Whilst stating that bank secrecy is over, Frieden asserts that Luxembourg should remain competitive on tax.
Support Argentina in the struggle against Vulture Funds Eurodad
Dec 12 - Diálogo 2000, member of Jubilee South Americas, has released the statement “The real debt is to the rights of the people of Argentina“ in defense of the rights and sovereignty of the people of Argentina in the face of recent vulture funds actions - they are asking for organizational endorsements.
Free Trade Agreement EU – Colombia & Peru: Deregulation, illicit financial flows and money laundering SOMO
Dec 5 - New report, presented at the European Parliament, reveals that with the signature of the Free Trade Agreement (FTA) between the EU, Colombia and Peru, there is a great risk of increased economic instability, tax evasion and even laundering of drug money. See press release here. Hat tip: Markus Henn.
Pakistan politicians engulfed by tax evasion storm Guardian
Dec 12 - "Nearly 70% of Pakistan's politicians, including some of the country's wealthiest people, did not file tax returns last year, according to a report that shines a light on a longstanding problem that reaches to the top of society."
Swiss Hedge Funds Consider Relocating to Liechtenstein, PwC says Bloomberg
Dec 12 - Swiss hedge fund managers trying to sidestep tougher regulations. "Switzerland has amended legislation to mirror the EU’s Alternative Investment Fund Managers Directive, tightening risk, compliance and auditing standards and increasing fund transparency. Managers from countries that don’t pass equivalent laws won’t be able to market to EU investors." Hat tip: Offshore Alert.
U.S.: Emerging Fiscal Cliff Deal Spares Corporations, but Not the Safety Net The Nation
Dec 12 - "So step back and take the long view: Obama could easily end up agreeing to a deal that asks corporate America to contribute nothing—revenue-neutrality is the selling point of his corporate tax plan—and could even end up giving them extra benefits. Meanwhile, Americans who rely on the safety net would have to make substantial sacrifice, and moreso if they’re not wealthy."
See also:
Why Is Big Business Supporting Obama? The New Yorker
Dec 12 - On a letter to the President, from the Business Roundtable, on the Need to Avoid the Fiscal Cliff - "I can’t help it. When I see Fortune 500 titans like Rex Tillerson, the chief executive of ExxonMobil, calling for higher taxes on the rich, I suspect there’s something fishy happening ... "
Pennies over patriotism? Stars move to tax havens Almogordo News
Dec 13 - A rundown on some celebrity moves of residence to avoid tax.
Google boss Eric Schmidt takes a dim view of capitalism
To contact us Click HERE
Google boss Eric Schmidt says, when challenged on the firm's tax avoidance shenanigans:
He must take an incredibly dim view of it. Or he is very confused about it all.
Or, most likely, both.
Schmidt may try to argue that the headline on this blog is misleading. Look at the logic of it, though, and it clearly isn't.
Update: more comments on this, in the same vein, here.
Google boss Eric Schmidt says, when challenged on the firm's tax avoidance shenanigans:"I am very proud of the structure that we set up. . . . It’s called capitalism."Let's see, now.
- Multinational tax avoidance via tax havens corrupts markets, tilting the playing field in their favour.
- Tax avoidance helps multinationals out-compete their smaller, more locally based rivals on a factor - tax - that has nothing to do with genuine economic efficiency and productivity - and everything to do with extracting wealth from other taxpayers elsewhere, including their competitors.
- Tax avoidance is effectively a way of extracting tax subsidies that aren't available to others.
- As a result of the killing of smaller firms, competition is reduced in the market, and the big become bigger. Oligipolistic and monopolistic market power, and the economic rents that flow from them, increase. Consumers pay more.
- As a result of all this, inequality is increased, which we now know poses long-term threats to economic stability.
- Tax avoidance helps multinational firms free ride off societies, helping them take the tax-funded benefits from society then getting others elsewhere to pay for it.
- Tax avoidance is particularly hard on developing countries, which don't have the skilled technicians able to counter the devious offshore arguments of the armies of tax advisers that multinationals employ.
- Navigating the complex seas of tax avoidance costs a fortune in fees paid to these same highly educated tax advisers and lawyers and the whole private infrastructure of tax havens. This is a huge cost to society: efficiency goes out the window.
He must take an incredibly dim view of it. Or he is very confused about it all.
Or, most likely, both.
Schmidt may try to argue that the headline on this blog is misleading. Look at the logic of it, though, and it clearly isn't.
Update: more comments on this, in the same vein, here.
Google's tax tricks: new video commentary
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This short video commentary nicely brings out the lunacy and artificiality at the heart of the corporate tax avoidance by Google, the third largest donor to President Obama's re-election efforts in 2012.
"Dutch Sandwich for them, sh*t sandwich for the taxpayer. And I am sick of it."
For a fuller explanation, read Jesse Drucker's original story, or, for more context, watch "We're Not Broke."
"Dutch Sandwich for them, sh*t sandwich for the taxpayer. And I am sick of it."
For a fuller explanation, read Jesse Drucker's original story, or, for more context, watch "We're Not Broke."
Links Dec 14
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Analysis: EU Action plan to strengthen the fight against tax fraud and tax evasion Eurodad
Dec 13 - Analysis compiled by by Eurodad with input from CCFD-Terre Solidaire, SOMO, TJN Europe and Alliance Sud on the EC's Action Plan to strengthen the fight against tax fraud and tax evasion released 6 December, and the two recommendations to member states on aggressive tax planning and regarding measures intended to encourage third countries to apply minimum standards of good governance in tax matters.
Top Deutsche Bank Executives Caught Up in Tax Evasion Inquiry Dealb%k
Dec 13 - More on a story linked earlier. "After a raid at Deutsche Bank’s headquarters, the company disclosed Wednesday that two of its highest-ranking executives were a focus of a tax evasion investigation, dealing a fresh blow to the German institution’s already battered reputation."
See also:
Tax Evasion Probe - Why Deutsche Bank Will Emerge Unscathed Spiegel
Dec 13 - "German prosecutors are investigating Deutsche Bank CEO Jürgen Fitschen. But does this mean he will be forced to step down? Probably not. The bank has survived far worse episodes in the past. Fitschen's predecessor even went to trial and still kept his job."
Outrageous HSBC Settlement Proves the Drug War is a Joke Rolling Stone Taibblog
Dec 13 - More on the story blogged here. "When you decide not to prosecute bankers for billion-dollar crimes connected to drug-dealing and terrorism (some of HSBC's Saudi and Bangladeshi clients had terrorist ties, according to a Senate investigation), it doesn't protect the banking system, it does exactly the opposite."
Another Goldman Creature Given Vital Government Post Rolling Stone Taibblog
Dec 6 - "Big news yesterday in the United Kingdom, where the citizenry surveyed its domestic banking system and discovered that it couldn't find a single person trustworthy enough to put in the top job at the Bank of England. So they went to Canada and stole that country's central banker, Mark Carney, who just happens to be a former Goldman, Sachs executive."
Global income inequality by the numbers : in history and now The World Bank
Nov 6 - The paper presents an overview of calculations of global inequality, recently and over the long-run as well as main controversies and political and philosophical implications of the findings. See comment on the Oxfam blog From Poverty to Power.
Inequality and Budget Deficits: Why is Only the Latter an Emergency? Huffington Post
Nov 24 - "I just read two sweeping reports on the state of income inequality in the U.S. (the second link focuses on state-level inequality) and other advanced economies. Perhaps it's because I've been so ensconced in fiscal cliff discussions, but I was struck by how much more alarmed policy makers are by the budget deficit than by the inequality situation."
Small businesses scope offshore locales Reuters
Dec 13 - "American small business owners of all stripes - some relocating existing ventures and others starting new ones - are considering tax-friendly locales ranging from Bermuda to Belize."
The Sky's The Limit For Asia's Philanthropy Space, Says UBS Wealth Briefing
Dec 3 - "The UBS philanthropy and values based investing team has offices in the US, Switzerland, Hong Kong and Singapore, with satellites scattered around key hubs in the world. These satellites are set up where the bank is already present." Cites the World Wealth Report (conducted by Capgemini and Merrill Lynch Wealth Management, 2010), which "found that advice on financial planning and tax aspects of philanthropy were the most demanded service of philanthropic offerings."
Dec 13 - Analysis compiled by by Eurodad with input from CCFD-Terre Solidaire, SOMO, TJN Europe and Alliance Sud on the EC's Action Plan to strengthen the fight against tax fraud and tax evasion released 6 December, and the two recommendations to member states on aggressive tax planning and regarding measures intended to encourage third countries to apply minimum standards of good governance in tax matters.
Top Deutsche Bank Executives Caught Up in Tax Evasion Inquiry Dealb%k
Dec 13 - More on a story linked earlier. "After a raid at Deutsche Bank’s headquarters, the company disclosed Wednesday that two of its highest-ranking executives were a focus of a tax evasion investigation, dealing a fresh blow to the German institution’s already battered reputation."
See also:
Tax Evasion Probe - Why Deutsche Bank Will Emerge Unscathed Spiegel
Dec 13 - "German prosecutors are investigating Deutsche Bank CEO Jürgen Fitschen. But does this mean he will be forced to step down? Probably not. The bank has survived far worse episodes in the past. Fitschen's predecessor even went to trial and still kept his job."
Outrageous HSBC Settlement Proves the Drug War is a Joke Rolling Stone Taibblog
Dec 13 - More on the story blogged here. "When you decide not to prosecute bankers for billion-dollar crimes connected to drug-dealing and terrorism (some of HSBC's Saudi and Bangladeshi clients had terrorist ties, according to a Senate investigation), it doesn't protect the banking system, it does exactly the opposite."
Another Goldman Creature Given Vital Government Post Rolling Stone Taibblog
Dec 6 - "Big news yesterday in the United Kingdom, where the citizenry surveyed its domestic banking system and discovered that it couldn't find a single person trustworthy enough to put in the top job at the Bank of England. So they went to Canada and stole that country's central banker, Mark Carney, who just happens to be a former Goldman, Sachs executive."
Global income inequality by the numbers : in history and now The World Bank
Nov 6 - The paper presents an overview of calculations of global inequality, recently and over the long-run as well as main controversies and political and philosophical implications of the findings. See comment on the Oxfam blog From Poverty to Power.
Inequality and Budget Deficits: Why is Only the Latter an Emergency? Huffington Post
Nov 24 - "I just read two sweeping reports on the state of income inequality in the U.S. (the second link focuses on state-level inequality) and other advanced economies. Perhaps it's because I've been so ensconced in fiscal cliff discussions, but I was struck by how much more alarmed policy makers are by the budget deficit than by the inequality situation."
Small businesses scope offshore locales Reuters
Dec 13 - "American small business owners of all stripes - some relocating existing ventures and others starting new ones - are considering tax-friendly locales ranging from Bermuda to Belize."
The Sky's The Limit For Asia's Philanthropy Space, Says UBS Wealth Briefing
Dec 3 - "The UBS philanthropy and values based investing team has offices in the US, Switzerland, Hong Kong and Singapore, with satellites scattered around key hubs in the world. These satellites are set up where the bank is already present." Cites the World Wealth Report (conducted by Capgemini and Merrill Lynch Wealth Management, 2010), which "found that advice on financial planning and tax aspects of philanthropy were the most demanded service of philanthropic offerings."
Adopting a unitary approach to taxing multinationals - here and now
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Guest blog, by Professor Sol Picciotto
The main response to my paper on unitary taxation published last week has been that it would take too long or be impossible to agree. Pascal St-Amans, the OECD’s head of tax said it would take 150 years, and even Margaret Hodge M.P., chair of the UK Public Accounts Committee (PAC) is quoted as saying that although it seemed like a `really good idea’, it would take `forever’.
Not so. The paper itself lays out a clear road-map, which includes steps which could be taken immediately to begin adoption of a unitary approach.
Unfortunately, some people have spent too long labouring in the salt mines of the OECD’s Transfer Pricing Guidelines: They need to get out and look at the real world. Only a few days after my report was published, Jesse Drucker reported for Bloomberg that Google avoided about $2b in taxes worldwide in 2011 by shifting about 80% of its total pre-tax profit, some $9.8b, to Bermuda.
The trouble is that the OECD approach starts from the wrong end. Its starting point is, for example, the accounts of Google UK, Amazon UK, and Starbucks UK. Not surprisingly, the declared taxable profits of these entities are low or zero, despite the enormous business they do here. Equally unsurprisingly, a large part of the enormous revenues generated by that business is channelled to companies such as Google Bermuda, Amazon Luxembourg, or Starbucks in The Netherlands. The OECD view is that these entities must be treated as if they were completely independent of their UK sisters - which is nonsensical.
A unitary approach would do what any sensible person would, as even the M.P.s on the PAC did, and compare the profits shown in the UK with the share of the companies’ worldwide business actually done in the UK. If they are seriously out of line, as they have been shown to be, the UK companies’ taxable profits should be adjusted accordingly.
HMRC’s lawyers should show themselves to be as ingenious and determined in interpreting the law as those working for the tax-dodgers. They could challenge Amazon’s attribution of profits from UK sales to Luxembourg when they are plainly inextricably tied to Amazon’s UK distribution and sales support operations. They could apply the profit split method, accepted in the OECD Transfer Pricing Guidelines, to adjust the intra-firm accounts of Starbucks, instead of being bemused by chimerical `comparability’ claims for royalty rates and coffee bean prices. HMRC’s failure to require this has now been shown up by Starbucks’ own voluntary acceptance of such an adjustment, under public pressure of course.
The OECD Guidelines acknowledge that `transfer pricing is not an exact science but does require the exercise of judgment on the part of both the tax administration and taxpayer’. It seems that the companies’ judgment is a lot better than that of the tax authorities.
The international tax rules were first formulated a century ago. As my report shows, they aimed mainly at international lending (portfolio investment). In this context, the separate enterprise principle made sense, so it was adapted to apply also to foreign direct investment by multinational companies. But tax authorities well understood that multinationals could exploit the opportunities for profit-shifting. They used simple but effective counter-measures. The UK report to the League of Nations study of transfer pricing of 1932 stated that in 45% of cases the profits of local affiliates of multinationals had to be adjusted by reference to their percentage of turnover or another appropriate factor. This had a salutary effect, since `the fact that the revenue authorities have the alternative of basing profits on a percentage of turnover prevents the taxpayer taking up an unreasonable attitude’.
In the past few decades, international tax regulations have become extraordinarily complicated, and equally incredibly ineffective. Rewriting them will clearly need a fresh start, and that will indeed take time. But, as Pascal St-Amans well knows, the building blocks are already available. The European Union already has a draft Directive, approved by the European Parliament, under current consideration by the Council of Ministers. It could certainly be improved, but it is a step in the right direction. UK government support would give it a great boost, but until now it has expressed steady opposition, along with Luxembourg, Ireland and The Netherlands.
International agreement on an allocation formula would indeed take some time. But the US experience of formulary apportionment of state corporate taxes shows that such an agreement is not necessary. States must counter-balance their claims to tax with their desire to attract investment, and this produces an acceptable degree of convergence. The German report to the same League of Nations study in 1932 hoped that the experience gained by ad hoc adjustments of accounts by tax authorities would lay the basis for more general principles for profit apportionment. Eighty years later we are still waiting.
In the meantime, tax authorities could use the weapons already at their disposal much more vigorously. The meek attitude they have shown to multinationals is not all their fault: they may have fallen into line with the pro-big-business views of their bosses in the UK Treasury and most government ministers. Perhaps now that they all are beginning to understand that public opinion will no longer find this acceptable, they will see the need for a new approach.
Sol Picciotto
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