The next batch of leaked tax papers that reveal the extent of ax abuse engineered with the active connivance of the Luxembourg tax authorities has been published.
The leaks have moved beyond PWC. What they prove is that all the Big 4 firms did this, not that there is much surprise there. They're all as bad as each other, and all are complicit in this organised attempt to deny elected governments the revenues they are owed in a combined assault on democracy.
The leaks also add more names to the list of companies engaged in this abuse. I welcome that. Column inches for tax abusers are always welcome.
But we already have the counter claims that these people are just playing by the rules, from the US Ambassador to London for starters.
And Margaret Hodge attacked PWC on Monday but I do not think the systemic nature of the issue has yet been explored.
So what we really need is action. I doubt the Google tax is going to deliver that; for a start it is not forecast to raise much money.
Nor can I see the EU ganging up on Luxembourg yet.
So who are the appropriate targets of action? The Big 4 are, of course. We have a scheme for high risk tax promoters in the UK. As drafted it would not go nowhere near what these firms do, or these arrangements. That's all very convenient and cosy for them. It even helps cement their positions by removing some competitors from the scene. But the truth is that it is these firms that are the real high risk promoters and they should be the targets for action now because they are, by their universal presence in tax havens, the one single and consistent agent that facilitates tax abuse in tax havens by multinational corporations without whom this process could not take place. And that's precisely why they now need to be the focus for attention.
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As a response to a serious complaint made by the Premier Shareholders Group the Institute of Chartered Accountants in England and Wales (ICAEW) “investigated” one of the Big Four.
Result?
The CIAEW ruled that an “accountant” was only responsible for examining and certifying company accounts and if during the course of this procedure there appeared evidence to support allegations of misconduct by the company directors the “accountant” was under no obligation to report its findings to any other authority — including the ICAEW!
Dead End Private Club!
Hi Richard,
I’m new to your web page and really like the content. I am new to these ideas and a novice in terms of terminology. Could I ask what PWC is ? And who are the big 4?
Please excuse my ignorance
Best wishes
Paul J
PWC is PricewatergouseCoopers and the Big 4 are KPMG, EY, PWC and Deloitte – the four biggest firms of accountants in the world
Except they are very far being just “accountants”, Richard, as you well know but Paul J, if he really is new to this blog and these issues, may not. They also offer consultancy services on all types of things, and they act as lobbyists, and they supply staff on secondment to governments and oppositions ministers, and they often become the employers of ex-ministers and civil servants. In short, the scale and reach of their actions and influence is enormous but almost entirely opaque and they are largely free from any effective form of regulation and oversight, not least because members or ex-members of the Big Four often dominate the entities that are supposed to carry out such functions.
In the 1940s – 1960s politicians, particularly in the US, rightly worried about the power and influence of the “military-industrial complex” (see Eisenhower’s presidential address from 1960) and its impact on government and democracy. I have no doubt that if Eisenhower and others who spoke out about those issue were alive today they would recognise and speak out about the corrosive and corrupting influence on government and democracy of the Big Four. But sadly that’s not something we can expect from our cowardly and complicit politicians, too many of whom are in thrall to such organisations.
I will be addressing these issues in the Danish parliament on Friday morning
almost like monopolies?
“all are complicit in this organised attempt to deny elected governments the revenues they are owed”
Governments are owed the revenues due under law.
Unless you can explain what laws have been broken you are, as usual, just spouting misinformed hot air.
So you support non-taxation on the basis of fantasy, do you?
I support the rule of law.
And I have challenged you to explain what laws have been broken.
And you are unable to.
European competition law, at least
Why won’t the EU, or US gang up on Luxembourg. Does the EU or US not care that their tax bases are being deceptively eroded? We surely can’t be afraid of a nuclear backlash!
The US and EU manages to impose severe political/financial/economic sanctions on countries like Russia and Iran that have been successful at least in impacting their economies, why not Luxembourg, Cayman Islands etc.?
Alternatively why not have a Special Luxembourg withholding tax (like the Swiss have implemented on foreign bank deposits that want to stay secret). Only this one would be implemented by our country’s banking system on all transfers of funds to Luxembourg. 25% of all transfers to Luxembourg are stopped at source and diverted to a Treasury holding account until such time as the entity making the transfer can show they aren’t involved in a gratuitous tax avoidance strategy with little commercial reality. Should ruffle some feathers…
All excellent questiomns
The reason as to why these countries are not ‘ganging up’ on Luxembourg is because over the last 30-40 years or so, politics has been infiltrated by ex-buisness and finance workers who have gone into government quoting the desire to ‘serve the public’ when in fact they have actually gone into politics to help themselves and their mates back where they came from.
It’s very simple. There has been a coup. You only have to look at how many ex-City folk were in Thatcher’s cabinet or look at how many Goldman Sachs people there are or have been in in the US Treasury. I mean come on – it’s not even a conspiracy theory anymore – just dig around and have a look. The facts are there.
With so many people coming into politics from finance, banking, business and even the law – many of them on a ‘we hate big Government (courageous states?) ticket’, its not hard for them to inculcate politics with their deregulation/turn a blind eye agenda. That is where we are now I’m afraid.
We need the counter – coup then
Yes we do but it will be hard – they’re dug in like ticks. And with so many already well-off ‘de-coupled’ people entering politics these days, what to do? The counter coup starts here and in the many other books and blogs that expertly critique this poor neo-lib orthodoxy that is the dark heart of all of this.
As I’ve said before, I think that opposition to this self-abusive neo-lib orthodoxy is too atomised (and I am not denigrating your efforts at all Richard). Someone needs to get this opposition together and form a united front – bring you ALL together. This would create a big foothold and maybe a real debate – not the pretend one we have now – will ensue.
The trouble is heterdox thinkers are like cats when it comes to herding
Aaaah! Well, there you go. What’s in the way? Egos? Loss of a reason to live (if the problem was solved, what would you all do afterwards)? Fear of not getting any credit? Does the ability to think outside of the paradigms also mean that such thinkers cannot work together?
Maybe this is the defining moment of our age? Maybe Ayn Rand was right after all? Maybe what you are and others are doing is just another expression of individualism and nothing more? But…….really? Are we that stymied by the need to be seen as different and unique (rather than part of a society where we share common interests) that we cannot form an alternative?
I suppose there needs to be an instigator somewhere – someone who will bang heads together and get things moved on. That instigator might not be a person but an event. As I’ve said before – maybe things just need to get a lot worse. I hope not but I fear so.
Or, what we need is someone with the time and the money to spend to get these ‘heterodox thinkers’ to work together. I’d better do the lottery this weekend then. Keep your finger crossed!
Mark
A very long time ago – when I was 15 or thereabouts – a wise man (now dead) told me poets change the world and politicians follow in their wake, and poetry has never yet been successfully written by committees and democracies can never really be run by anything else
His point was we need both but it is rare for the skills of one to be combined with the skills of the other
I am not a poet, but I am an introvert and thinker in the Jungian sense who is not naturally disposed to the compromises and crowded nature of political life. That is why, so far, I have resisted all requests that I stand for office, and there have been a number
I hope to have my uses
But others may need to provide the translation to reality and I see little wrong with recognising that
Richard
Richard
Firstly I am not criticising any stance that you have as you have been undoubtedly courageous enough already in setting up this blog which for me (contrary to how I may come across) is a great source of hope. Not at all.
I believed that all I am suggesting is the formation of a new consensus whereby our modern politicians pull on people like yourself as much as they pull on Rand, von Hayek, Friedman, Thatcher – ad nauseum. This would be in order to achieve balance.
So you and others poets would not be doing the job of governing, but doing the job of informing what was done . But these days, are you enabled to do that enough?
In further mitigation, I would also ask for your pity and understanding as I have become so utterly frustrated with what is supposedly left of the Left or any countervailing argument to the dominant orthodoxy that prevails and I am looking for answers, ways and means. So, this is why I suggest what I have suggested.
The neo-libs/pro-marketeers are a well-organised bunch and vested interests are hard to dislodge. The Left (or should we now just call them ‘progressives’) seem to behave like spurned people – they have totally lost faith in the people they should be representing instead of critiquing the methods the neo-lib orthodoxy uses to win the argument and matching those. They are very cunning. Evil often is.
So, my comments were never meant to impugn your position which I respect. I will not bring these ideas here again if you feel they create an unwelcome pressure.
Thanks,
Mark
Your comments are welcome
As U.S. your clarification in which I find much that resonates