2009 November » Tax Research UK

The Swiss are cheating

Nov 172009

The Tax Justice Network has blogged the continuing abuse of information exchange by Switzerland.

Carl Levin has said:

While it is good to know that 14,700 people have now disclosed previously hidden offshore bank accounts, the U.S.–Swiss Annex disclosed today, designed to compel disclosure of the names of U.S persons with Swiss accounts at UBS, is very disappointing. It complicates and muddies what should have been a straightforward agreement by UBS and the Swiss Government to disclose Swiss accounts hidden from the United States by U.S. accountholders.

UBS admitted last year that it ‚Äòparticipated in a scheme to defraud the United States’ out of tax revenue. Since then, UBS has been prohibited by its government from simply turning over the names of the 52,000 U.S. clients suspected of participating in that tax evasion scheme with UBS. Instead, the tortured wording and the many limitations in this Annex shows the Swiss Government trying to preserve as much bank secrecy as it can for the future, while pushing to conceal the names of tens of thousands of suspected U.S. tax cheats. It is disappointing that the U.S. government went along.

He’s right.

So we still have still to these places.

And we will.

Dave Hartnet: The Chancellor’s tax enforcer who just hates to lose

HMRC, Secrecy jurisdictions, Tax Havens 2 Responses »

Nov 172009

Dave Hartnet: The Chancellor’s tax enforcer who just hates to lose – Telegraph.

Hartnett says:

I think our top priority right now is the work we are doing to end tax secrecy, particularly in tax havens

He’s right.

Secrecy jurisdictions: who has the highest ratio of GDP generated by financial services?

Economics, Foot Review, Guernsey, Isle of Man, Jersey, Secrecy jurisdictions, Tax Havens 35 Responses »

Nov 172009

There’s a new report out on the secrecyjurisdictions.com web site. It’s entitled Key Data Report 2: Financial Services-to-GDP-ratio

The report looks at the contribution of the financial services sector to the overall economy of each secrecy jurisdiction surveyed. As we note:

A high share of financial services in the overall economic activity of a country is likely to indicate the presence of considerable political influence by the financial services industry on the government of the jurisdiction.

It is almost universally true that the more reliant a territory is upon a particular economic activity the more deferential it is likely to be to the demands of that sector. Such influence can undermine democratic decision making processes, can facilitate corruption, in the case of financial services can create a strong orientation towards the needs of those outsides the territory who would not normally be the prime concern of its government, and can be (but we stress, is not always) conducive to a criminogenic environment.

There was one major problem with the research: so opaque are many of these secrecy jurisdictions that we could not get the data. This is the list of those where we failed to secure reliable data:

Of those where we could get data this is the result:

It’s a considerable indictment of the Crown Dependencies that they are so dependent upon financial services. It is right that the UK has demanded that this change in the Foot report. Their economies are collapsing as the offshore world falls apart under the pressure for reform.

And it is essential that they and other states where this dependency is high get the support they need to break the spiral of abuse of the world’s financial system that they facilitate. The cost to the UK of doing that is going to be high. The benefit will be higher.

As I have shown, the cost of these locations to the UK might be up to £4 billion a year, the indirect cost much higher still. Giving them subsidies to reform makes straightforward economic sense, and means it will be so much easier to pick off those places that remain in the secrecy world.

Birmingham FC falls to offshore

Secrecy jurisdictions, Tax Havens 1 Response »

Nov 172009

Birmingham assure fans that Carson Yeung is not just a ‘front man’ and remains in charge – Telegraph.

Despite calls for greater transparency over the ownership of football clubs, it has emerged that unidentifiable investors could now have a controlling interest in Birmingham City, after a hefty percentage of the company which owns the club was transferred to two unknown companies registered in the British Virgin Islands.

Yet more degradation of British life as a consequence of offshore secrecy.

Rowan Williams on tax

Economics, Ethics 9 Responses »

Nov 172009

Rowan Williams had this to say on tax in his speech to the TUC yesterday:

[T]he point is that we should be thinking about taxation neither as an unreasonable burden on enterprise nor as a simple mechanism of redistribution but as a potentially sophisticated tool for long-term ‘economy’ – housekeeping. Taxation builds a habitat – already, quite properly, through state welfare provision, but potentially in other less familiar ways.

He then explored green and other tax issues.

Good to note I’m not the only person who believes in the positive contribution of tax to society – something we have to shout about, often – because tax has had and will continue to have an enormously beneficial and civilising impact on our world.

One million climate jobs Now!,

Economics, Green New Deal Comments Off

Nov 172009

Earlier this year, the Campaign against Climate Change (CaCC) trade union group set up a commission to produce a detailed plan for a million ‘climate’ jobs.

The commission includes academics and environmental groups as well as several unions including PCS.

In November 2009 the CaCC trade union group published a pamphlet, One million climate jobs Now!,which sets out how this can be achieved. The pamphlet is the first stage in a national campaign to get the government to employ a million unemployed workers to save the climate. It contains the arguments workers need for building the campaign.

You can download the pamphlet here.

I contributed a small part to this report.

VIDEO: Beyond Crisis – A progressive solution to the public finances crisis

Economics, TUC Comments Off

Nov 172009

VIDEO: Beyond Crisis – A progressive solution to the public finances crisis | ToUChstone blog: A public policy blog from the TUC.

Again, having problems embedding the video – but this is Ann pettifor and me in action at the TUC.

Mine isn’t that easy to follow – I spoke to slides and they’re not all shown.

But you can get a feel for it.

VIDEO: Beyond Crisis – Rowan Williams keynote speech at the TUC

Economics, TUC Comments Off

Nov 172009

VIDEO: Beyond Crisis – Rowan Williams keynote speech | ToUChstone blog: A public policy blog from the TUC.

Sorry – I don’t seem able to embed this – so follow the link. It’s worth it.

Why Has Domestic Revenue Stagnated in Low-Income Countries?

Development Comments Off

Nov 162009

There’s a fascinating new report come out of SOAS. Its Centre for Development Policy and Research has published the report under the title "Why Has Domestic Revenue Stagnated in Low-Income Countries?” The summary says:

There has been miserably slow progress in increasing domestic revenue in low-income countries since the 1990s. In order to find out why, this Development Viewpoint draws on an extensive analysis of disaggregated revenue data for low-income countries in sub-Saharan Africa, South and Southeast Asia, and Central Asia.

Based on this analysis, we contend that the reigning ‘tax consensus’ has placed an inordinate emphasis on boosting domestic indirect taxes, and the value added tax (VAT) in particular. These taxes cover domestic goods and services in the formal sector.

At the same time, the ‘consensus’ has advocated eliminating import taxes (in order to liberalise trade) and lowering tax rates on corporate
profits (in order to compete with other rate-cutting countries). Consequently, trade taxes have been particularly hard hit while increases in direct taxes, which cover mainly personal income and corporate profits, have generally been anaemic.

Overall revenue has ended up stagnating because of the resultant reliance on boosting revenue from only one major component, i.e., taxes
on domestic goods and services. The pre-eminent instrument for this purpose has been the VAT, which has replaced sales taxes (as well as
import duties) in many countries.

The full impact of this switch has yet to be felt by developing countries. It is anther development disaster waiting to happen.