2011 August » Tax Research UK

The tyranny of democracy

Conservatives, Ethics, Politics 38 Responses »

Aug 302011

I come across the above phrase and others like it increasingly often these days. It is widely used in right wing libertarian commentary and increasingly openly as far as I can see and hear amongst Tories.

What it means is that democracy is at fault in imposing the wish of the majority who vote for parties who propose progressive taxation meaning that those with above average incomes pay more tax as a proprtion of their income than do those of lesser means. Since these people think all taxation is theft and say so often they consider this taxation to be tyranny.

Their solution is a simple one. They want the abolition of democracy and its replacement by rule by the market – represented by rule by wealth, of course.

It appears they are set on their way. When we can see abortion rights rolled back as a result of similar far right opinion do not doubt that moves to remove Labour seats and to undermine Labour funding aren’t direct moves against the ‘tyranny of democracy’ by ensuring there is no opposition in the UK capable of funding an assault on the Tories.

Only a year or two ago I would not have believed this but having seen the straightforward far right obsession of many new Tory MPs and their total lack of concern about anything but serving the interests of wealth I have changed my mind.

Not only is the Nasty Party back (as described by Theresa May) but it’s now moving on democracy itself.

Of couese they will deny it but the real question will not arise from addressing that denial. The real question is about how we are going to address this real tyranny that is threatening democracy itself.

Of course we need tax havens

Secrecy jurisdictions, Tax Havens 32 Responses »

Aug 292011

There has been an interesting outbreak of pragmatism that endorses tax haven behaviour on the blog and in the press this weekend, all of it the result of George Osborne’s Swiss tax deal.

So let me be clear, of course we need tax havens. Without them we couldn’t:

- undertake mass tax evasion

- hide multinational company profits from tax

- launder drug money

- launch attacks on the tax systems of democracies

- ensure counterfeiters have a secure base from which to trade

- facilitate insider dealing

- help kleptocrats loot their countries

- hide the trail of people traffickers

- provide asymetric information to markets that increase risk and threayen global financial collapse

- shift wealth from the poor to the rich.

So of course we need them. It’s so obvious they add to the stock of human wellbeing.

That’s why the UK gave them a big vote of confidence last week. And it is no doubt why so many friends of tax havens are celebrating the fact.

Cameron said this. And then did the Swiss tax deal

Conservatives, Ethics, Switzerland, Tax evasion 42 Responses »

Aug 262011

David Cameron said this:

“For me the root cause of this mindless selfishness is the same thing I have spoken about for years: it is a complete lack of responsibility in parts of our society.

“People allowed to feel that the world owes them something, that their rights outweigh their responsibilities and that their actions do not have consequences. Well they do have consequences.

“We need to have a clearer code of values and standards that we expect people to live by and stronger penalties if they cross the line.

“Restoring a stronger sense of responsibility across our society in every town in every street in ever estate is something I am determined to do.”

And then he signed the Swiss tax deal.

Which lets criminals off the hook.

Which endorses banking secrecy to hide crime.

Which undermines honest business.

Which rewards tax evasion.

Which will bring no one to account for their crime.

Which means we now know for sure what we always suspected.

He’s a hypocrite.

Let’s not get personal – this is a matter of right or wrong

Ethics, Uncategorized 19 Responses »

Aug 262011

It would seem I upset one of two people who thought they might be my friends in comments on the UK – Swiss tax deal. I’m not going to apologise. This was a ‘Marmite’ issue – you’re either for or against it.

You either think letting tax criminals off whilst only paying a small part of the tax they owe is right, or wrong. You can’t be pragmatic about it. This is an issue of justice.

You either think it is right to endorse banking secrecy so that criminality may flourish, or you don’t. This is about ethics.

You either think it right that the rich who coldly plan and execute their tax crimes in organised fashion should be allowed anonymity and no day in court when poor kids who acted on the spur of the moment are rushed through all night courts and get long prison sentences, or you don’t. It’s a matter of believing in class prejudice, or not.

You either think that encouraging an unlevel playing field for business so that the cheats get an unfair competitive advantage by not paying tax is fair, or you don’t. It’s a matter of believing in business or believing in fraudulent activity.

You either believe that H M Revenue & Customs has to uphold the law, or you don’t. It’s a matter of belief in the duty of government to uphold the law, or not.

You are either willing to let those banks and bankers who organised the handling of stolen property (for that is what tax evaded funds are) off the hook by granting them immunity from prosecution, or not. It’s a matter of whether you want to know bankers arrange crime, or not.

You either, at the end of the day, believe that there is a difference between right and wrong. Or you don’t.

And you either have the courage to say that doing the right thing is the only course of acceptable conduct even if there is a cost to doing it, or you don’t.

It’s about having ethics.

It’s about standing up and being counted.

It’s about saying the Emporor isn’t wearing any clothes.

None of those things are personal. But people like to take criticism for being on the wrong side of all these issues personally.

Feel free to do so: that’s your guilt speaking.

But it isn’t intended that way. You have the option to do the right thing. It’s your choice. I respect that.

But don’t for a moment expect me to respect the wrong choice. That’s the only requirement for evil to happen. And that’s what has gone on in Switzerland.

The friends of tax havens are delighted with the Swiss tax deal

Switzerland, Tax evasion, Uncategorized 6 Responses »

Aug 262011

The Sovereign Society like the UK-Swiss tax deal.

As regular promoters of tax haven abuse their endorsement (and the endorsement by Swiss bankers they quote) is sure indication that the Swiss and all who support tax haven privacy that permits tax evasion are sure they have pulled a fast one over H M Revenue & Customs, as unfortunately it has to be conceded they have.

Labour shadow minister condemns Swiss tax deal

Labour, Switzerland, Tax evasion 3 Responses »

Aug 252011

Christopher Leslie, Labour shadow Financial Secretary issued the following statement tongith on the UK – Swiss tax deal:

“It is welcome that some of the money which is owed to the British taxpayer is being paid back. But there are real worries about the details. The Government should ensure that all those who have broken the law face the full penalty. There is a significant risk that some who have taken part in criminal tax evasion will escape by paying less than if prosecuted – the Government should guarantee this will not happen.”

“The Government should also release full details of the agreement – particularly around the treatment of non-doms. It is not enough just to say that the agreement includes “special rules” for non-doms. UK taxpayers need to know what those special rules are.”

He’s right.

Why should criminals be excused?

And it’s not good enough to announce a deal and not say what it is – during the recess.

This is Tory game play to support tax haven activity and tax evasion – and it’s wholly unacceptable.

How can Dave Hartnett head HMRC when he utters nonsense like this?

HMRC, Switzerland 10 Responses »

Aug 252011

The Treasury press release on the Swiss deal is out. Dave Hartnett, de facto boss of HMRC whose fingers are very obviously all over this deal says of it:

“The world has changed for tax evaders. A few years ago, nobody would have anticipated that we would conclude an agreement with Switzerland to tackle tax evasion.

Absolute nonsense: we already have the European Union Savings Tax Directive and an upgrade was close to delivery. Please don’t talk rubbish Dave.

He continues:

However, with the clear wish of Switzerland as well as the United Kingdom to ensure that tax is paid as it should be

How he has the gall to say this is beyond belief: the Swiss have fought every attempt to make sure people pay the right amount of tax – and still are. This deal is all about ensuring banking secrecy – whopse sole purpose always has been and is now to assista criminality – will remain intact, and it will. So Hartnett is simply not telling the truth.

But he carries on:

we are embarking on a new course which preserves important principles for each jurisdiction, and will be fair for all UK taxpayers.

No it is not. Those people who have paid the right amount of tax, openly and honestly will be galled to know that the boss of HMRC is delighted that those who evaded can n ow pay much less than they ever owed in an honesty box with no names attached and can rest confortable knowing that as a result they will never be prosecuted for their crimes. They shouldn’t be pleased: they should be very, very angry that HMRc is headed by someone who is so happy to let tax evaders off the hook and I am sure they are.

Hartnett again:

Our strategy is working.

That’s the one of supporting the UK’s tax havens is it Dave?

We will secure significant sums of tax that some had thought we would never see.

Oh nonsense – the European Union Savings Tax Directive could have delivered so much more.

Not only does this agreement settle past liabilities and make arrangements to secure correct taxation in the future, it also gives HMRC more scope to find out about Swiss accounts.”

Now he’s becoming ridiculous: we can ask about 500 a year but only if we can find out about them first. Fat chance Dave. You’ve just done a deal that guarantees anonymity.

Hartnett’s rapidly become the biggest liability in the history of the Revenue. Vodafone. Goldman Sachs. Now this.

It’s shocking that he’s been allowed to lay waste to so much tax justice in such a short period of time.

UK-Swiss tax deal ‘a disgrace’ warns Christian Aid

Switzerland, Uncategorized 1 Response »

Aug 252011

I’m proud to work with Christian Aid and to share this press release from them:

The new tax deal between the UK and Switzerland amounts to collusion with criminality and will seriously damage poor countries’ attempts to collect the billions they lose to tax dodgers, Christian Aid is warning.

‘This deal makes it much less likely that developing countries will ever be able to get the taxes owed to them from those hiding money in tax havens like Switzerland. It is a disgrace,’ said Christian Aid Director Loretta Minghella.

The UK-Swiss agreement will lead to Britons with secret Swiss bank accounts starting to pay tax on them, which the Swiss will pass on to the UK – but crucially, without revealing account holders’ identities.

Tax evaders will have the option of owning up to the UK authorities about their accounts, as an alternative to paying a one-off back tax of between 19 and 34 per cent on their hidden money.
However, Ms Minghella argued that by allowing people to keep their identities hidden, the UK Government is, in effect, colluding with criminality.

‘Why would anyone rather pay a back tax of 19 to 34 per cent on the money they have hidden in Switzerland than reveal their identity, unless they have done something seriously wrong? And why is the Government letting them get away so lightly?’ she asked.

‘The most likely reason is that they have evaded a whole lot more tax than that or been involved in other serious criminal behaviour.

‘This is a bad deal for honest British tax payers and for scores of poor countries around the world.’

Christian Aid believes the deal will seriously damage global efforts to curb tax dodging – a menace which it estimates costs poor countries $160 billion a year, far more than they receive in aid.
Germany is also reported to have initialled a similar deal with Switzerland.

Poor countries lack the political and economic clout to do such deals with Switzerland – but they too lose billions as a result of money being illegally hidden in tax havens.

And just like the UK, they need that money to fund vital public services such as schools, hospitals and care for the elderly.

Christian Aid is calling on the UK and other G20 Governments to use their November summit meeting in Cannes to bring about an end to the tax haven secrecy exemplified by Switzerland.

Specifically, the G20 should broker a new system of automatic information exchange between Governments – including those of poor countries – to help them to detect when citizens hide wealth offshore.

Cameron and Osborne did the Swiss tax deal to support tax evasion – there’s no other explanation

Cayman, Guernsey, Isle of Man, Jersey, Switzerland, Tax evasion, Uncategorized 107 Responses »

Aug 252011

The UK – Swiss tax deal does not meet with my approval, as some will have noticed. The deal is outlined here. My objections are littered through the blogs preceding this one.

But let’s stand back for a moment and consider why the UK have done this deal – uniquely (because it seems unlikely that the supposedly similar German one will get parliamentary approval and so will not happen).

It’s important to say this deal was not needed. The revised European Union Savings Tax Directive is on the table. Twenty five EU states support it and it has looked very likely recently that compromise with the other two was possible and that Switzerland could have been pulled on board. So deal that would have ensured there was automatic information exchange on all interest income and gains arising throughout Europe, Switzerland, Liechtenstein and the UK’s tax havens was on its way, covering not only individuals but companies and trusts as well and with names and addresses being supplied.

That deal would have ensured we’d have got all the information we needed to demand all the tax due by those who have been criminally evading their tax bills by hiding funds in Swiss banks that have been deliberately and knowingly helping them to do so.

And I think the UK- Swiss tax deal has been deliberately engineered to scupper that EU wide deal because it would have applied to Jersey, Guernsey, the Isle of Man, Cayman and all other British tax havens that comprise the branch offices of the City of London tax haven. And it would also have extended information exchange to companies and trusts – which would have shattered the tax evasion industries in these British tax havens.

So what have Cameron and Osborne done? They’ve as far as I can see absolutely deliberately signed the deal with Switzerland in an effort to destroy that EU deal. Even the FT says this morning:

We’re not experts in this field but we also wonder whether these bilateral deals mark a setback for international efforts, led by the OECD and EU, to force the Swiss into further transparency.

“The UK’s willingness to legitimise secret accounts on a ‘no-names’ basis is controversial because it treats users of secretive havens more leniently than other taxpayers,” notes the FT.

So how should we really interpret this deal?

What’s very obvious it is deliberate move by London. And it’s also very obviously deliberately designed to help tax evaders by making sure that the Crown Dependencies and others can remain in that sordid business.

So we have to conclude that this is not a move against tax evaders – all of whom will be laughing themselves silly about how easy it is to get around this Swiss deal.

In that case let’s not put too fine a point on this: this is the Treasury and our political leaders going out of their way to support criminality by making sure that a measure – the European Union Savings Tax Directive - that would blow tax evasion in British dependencies apart cannot now be implemented. And all, no doubt, at the behest of the City of London.

There’s no other reasonable interpretation for what they have done.