2010 April » Tax Research UK

Who’s going to win?

Apr 302010

I’ve just voted in the general election. That’s possible as I have a standing postal vote.

In Norfolk South West the choice was easy. Lib Dem was the only option to keep out yet another Tory. And that probably won’t succeed.

Having said which, if Labour had been the progressive choice with best chance I would have voted Labour.

And in Brighton Pavilion or Cambridge I’d have voted Green – as Green New Deal colleagues with a good chance of election are standing in both.

In some seats in Wales and Scotland I’d have undoubtedly voted nationalist.

Fickle? Not at all. I want progressive politics in this country. Ideally, politics more progressive than any of the three main parties have to offer. I do know that the Tories will be a disaster for the UK. I do know they are seeking electoral reform in an attempt to keep them in power for good by abusing the whole concept f democracy – when I want real, much more broadly based democracy.

I genuinely fear the Tories will bring social disruption to this country.

I fear they will create mass unemployment – deliberately – once they have reformed parliament to ensure that they have a permanent inbuilt majority.

I admit I dread a Tory government.

I also fear a Lib Dem supported Tory government – except that if the Lib Dems hold a balance then the Tory electoral reform won’t happen and I think Clegg will sit out on the sidelines rather than join them in office.

My only hope if Cameron forms a government is that Mervyn King is right, and that labour and other progressives can get their act together in time to deliver the real change this country needs once the full horror of a Tory administration becomes clear.

What is undoubtedly true is we’re living in interesting times.

Democracy could be the real winner.

But however it is looked at, only at cost to the Tories whose anti-democratic instincts are all too apparent.

Think tank says raise income tax by 6p in the pound

Progressive Taxation Comments Off

Apr 302010

Raise income tax by 6p in the pound, UK told | Business | The Guardian .

According to the Guardian:

Britain should raise income taxes by 6p in the pound to make bigger inroads into its huge deficit or risk being vulnerable to the next financial crisis, according to a leading thinktank that advises the Treasury.

Current plans by the political parties to reduce spending and pay down debt would not be enough to prepare the country for a collapse like that of Lehman Brothers and a deep recession, said the National Institute of Economic and Social Research (NIESR).

The hard-hitting criticism of plans by all political parties to cut the deficit, and especially the reliance on “mythical” efficiency savings, came as Europe was convulsed for a second day by the aftershocks of Standard & Poor’s decision to downgrade Spanish government debt.

They’re right on cuts and savings: they’re just not going to happen.

6p tax change would increase revenue by up to £30 bn.

It’s going to happen.

But this is not the best way.

That’s explained in The Great Tax Parachute.

Mervyn King warned that election victor will be out of power for a generation, claims economist

Election 1 Response »

Apr 292010

Mervyn King warned that election victor will be out of power for a generation, claims economist | Business | The Guardian .

Mervyn King is warning that the victor in next week’s election will be forced into austerity measures that will keep the party out of power for a generation, according to the US economist David Hale.

Dragging the Bank of England governor unwittingly into Britain’s political battle, David Hale said he had been told by King at a private lunch about the likely fiscal pain ahead.

I think he’s wrong.

There’s a reason.

No party will never succeed in imposing these cuts.

There is only one answer – and it is tax reform of the sort I am suggesting.

That’s the only viable plan there is for our economy.

The wisdom of Nick Clegg

Banking, Corporation Tax 3 Responses »

Apr 292010

Nick Clegg espouses two ideas from this blog on the leader’s debate.

The first is an extra 10% tax on banks.

The second is to make sure this is paid irrespective of the losses they have incurred in the past.

He’s right.

And in contrast Cameron wants to reduce their tax rate.

How can Cameron think he will manage the economy if he can’t even get this right?

The madness of David Cameron

Conservatives 5 Responses »

Apr 292010

Listening to the leader’s debate.

Cameron is really mad.

Try the logic:

1) He’ll cut government spending. This will reduce the size of the state and public sector.

2) This will increase unemployment.

3) He will cut benefits and refuse it to people who won’t work

4) But he’s ensuring there will be no work

In which case he’s actually saying he guarantees there will be an increase in poverty.

Nice!

Or mad.

Jersey Finance does not provide value for money

Jersey Comments Off

Apr 292010

Jersey Finance ‚Äòis good value’ ¬ª Business ¬ª This Is Jersey.

As the Jersey Evening Post reports:

JERSEY Finance has rejected criticism that it does not provide value for money.

A States spending watchdog has criticised the body that received £1.8 million in taxpayers’ money last year to promote the Island’s finance industry.

Hardly surprising really when it is spending Jersey people’s money to produce reports by Richard Teather, a person who Jersey Finance admits writes ” regularly writes and speaks about the moral and social benefits of tax havens” – benefits which he says are derived from tax evasion. It’s a bit like shooting yourself in the foot really, isn’t it?

Despite which

Jersey Finance chief executive Geoff Cook said there was ‚Äòstacks of evidence’ that the visits were paying real dividends.

Probably true if you’re arguing in favour of tax evasion in tax havens – something Teather says “is often necessary behaviour in order to take advantage of tax havens” and of which he adds “Without the willingness of some to engage in this sort of activity, tax competition would be much less effective and therefore reduce the benefits that flow from it for the rest of us.”

If, however, you’re seeking to promote a squeaky clean image such a report might represent a serious error of judgement.

No wonder the committee came to the conclusion it did.

People don’t give up citizenship for tax

Tax avoidance 4 Responses »

Apr 292010

More American Expatriates Give Up Citizenship – NYTimes.com.

Fascinating report:

Amid mounting frustration over taxation and banking problems, small but growing numbers of overseas Americans are taking the weighty step of renouncing their citizenship.

You’d have thought this would mean this is a big issue to get such prominence. But then note it adds:

The Federal Register, the government publication that records such decisions, shows that 502 expatriates gave up their U.S. citizenship or permanent residency status in the last quarter of 2009. That is a tiny portion of the 5.2 million Americans estimated by the State Department to be living abroad.

Let’s put this another way. This is a non-issue. Tiny numbers of people move for tax. Tiny numbers of people give up citizenship for tax. It’s safe to conclude they’re in the minority also lacking any sound judgement. In which case this issue can safely be ignored as irrelevant – which is what it is.

US progress on country-by-country reporting

Country-by-country Comments Off

Apr 292010

Yesterday, the United States Senate Foreign Relations Committee approved S. 2971, Foreign Relations Authorization Act, which included policy language on extractive industry transparency that parallels part of S. 1700, the Energy Security Through Transparency Act. The relevant text is below. The bill will now be referred to the Senate floor for consideration.

SEC. 408. SENSE OF CONGRESS RELATING TO TRANSPARENCY FOR EXTRACTIVE INDUSTRIES.

It is the sense of Congress that‚Äî

(1) the President should work with foreign governments, including members of the Group of 8 and the Group of 20, to establish domestic requirements that companies under the jurisdiction of each government publicly disclose any payments made to a government relating to the commercial development of oil, natural gas, and minerals;

(2) the United States Government should commit to global leadership of transparency in extractive

industries by supporting‚Äî

(A) multilateral pro-transparency efforts, such as the Extractive Industries Transparency Initiative, in revenue collection, budgeting, expenditure, and wealth management;

(B) bilateral efforts to promote good governance in the extractive industries through United States missions and activities abroad;

(C) the implementation of extractive industries reporting requirements for companies under the jurisdiction of the United States; and

(D) efforts to persuade other members of the Organization for Economic Cooperation and Development and Asia-Pacific Economic Cooperation to adopt uniform legislation to ensure a coordinated regulatory approach; and

(3) the President should commit the United States to become a Candidate Country of the Extractive Industry Transparency Initiative.

Inherent in this is support for country-by-country reporting.

This has to become law.

Wait for the oil companies to lobby like fury against a demand that they act responsibly.

The future of the welfare state

Economics, Ethics 7 Responses »

Apr 292010

As the FT reports this morning:

“Two parliaments of pain” is the phrase used by the independent Institute for Fiscal Studies to describe what is in store for Britain in the years ahead.

With the next government, of whichever stripe, needing to cut nearly £37bn a year from public expenditure by 2014 just to halve the deficit, can the welfare state survive?

“Not as we know it,” says Eamonn Butler, director of the rightwing think-tank, the Adam Smith Institute.

Andew Haldenby, director of Reform, another right-of-centre think-tank, agrees the fiscal deficit will force a reappraisal of the relationship between citizen and state. “The idea that the state can do everything, or even as much as it is doing, is just not tenable,” he says.

The FT’s glee is apparent, as it is in another article when it says:

Labour has added new welfare entitlements costing more than £8bn a year since 1997, the equivalent of 2p on the basic rate of income tax, according to Financial Times research.

Winter fuel allowances, free bus passes for the elderly and Sure Start make up a lot of that – services massively appreciated by those who have them.

But you can almost sense the excitement in Reform and the ASI at the idea of rolling back the state.

The FT does provide some balance:

Some believe the problem is overstated. Julian Le Grand, professor of social policy at the London School of Economics, says: “I am not convinced about the need for massive spending cuts. As soon as economic growth resumes, a lot of the red ink will disappear. I suspect both the political and the economic reality is that after the election, somehow the really big cuts won’t happen.”

Mr Butler sees this as “Micawberish – just hoping that something will turn up”.

No it’s not. The FT notes that research undertaken for the 2020 Public Services Trust shows the public are deeply unwilling to contemplate big changes to the boundaries of the welfare state. I have no doubt that the Tories will try to do just that if they can, alongside their plan to dismantle democracy itself, if they get the chance. But the reality is that whatever the bankers and economist form the Right say, who currently completely dominate this debate, society will not tolerate this. The backlash will be almighty when anyone tries to introduce these cuts. They just will no0t happen. People will not, in this country, at this time of massive national prosperity for most (and don’t deny it – as a country we are prosperous) see the safety nets that have allowed that prosperity to be created be dismantled by a minority for the benefit of fewer still.

There will be resort to tax reform. I guarantee it.

And there will be dramatic social change. I can’t predict precisely what yet. It would be foolish to say I could. But it is perfectly obvious that retrenchment to the ludicrous ideas of Victorian style philanthropy – the Tory response – makes no sense at all, and equally it makes no sense to presume the status quo will be maintained when that was built on the basis of unsustainable neo-liberal economics.

What we will develop will be a new social paradigm. An aging population. Unsustainable resource use. Oil being priced out of the market. And much more will guarantee it.

And we won’t go backwards.

Of that I am also sure. People will not tolerate it.