Dirty Secrets: my speaking notes at Manchester today

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I am speaking at the Post-Crash Economics conference in Manchester today on how tax havens harm the economy. These are my unedited speaking notes:

  • How tax havens destroy the economy
    • The new book:
    • Part of a series on new economic thinking
      • Tax havens: the true story of globalisation, with Ronen Palan and Christian Chavagneux, 2009
      • The Courageous State, 2011
      • The Joy of Tax, 2015
      • Dirty Secrets, 2017
      • And innumerable reports plus 13,000 blog posts
      • Including work on the Green New Deal and People’s QE
    • One theme
      • How did we get here?
      • What is it about here that does not work?
      • How can we go forward?
    • A three part solution
      • Tax justice campaigners have always believed in a three part solution to building a new economy
      • Have a vision of what we want
      • Work out why what we have fails that ideal
      • Design solutions that move us in the direction we want to go
    • Tax havens
      • The real problem with tax havens was we couldn’t define them
      • Too many varieties
      • Too many characteristics
      • Too many apparent issues to address
      • I only really use the term because the media still recognises it
    • What we’ve really got
      • So we had to work out just what we were really facing when work on this issue got under way
      • “We’ were:
        • John Christensen
        • Sol PIcciotto
        • Prem Sikka
        • Ronen Palan
        • Me
      • And we realised what we face is secrecy
    • Tax havens are actually secrecy jurisdictions
      • Secrecy jurisidictions:
      • Places that create legislation and regulation for the benefit of people who live elsewhere
      • And who create a legally backed veil of secrecy that prevents those using this regulation being identified
      • This is what tax havens really are: purveyors of deliberate economic opacity
    • What economic opacity is used for
      • Tax abuse
      • To hide crime
        • Fraud
        • Money laundering
        • Trafficking of all sorts
        • Insider dealing
        • Etc
      • To hide the true ownership of assets
      • To hide the true nature of a corporation’s trade
      • To subvert the law of another country
    • Opacity
      • Undermines the data required to allocate capital efficiently
      • Creates an unlevel playing field for businesses
      • Increases the tax gap
        • Resulting in the failed policy of austerity
        • And undermining the social justice a proper tax system can deliver
      • Permits crime
      • Undermines the rule of law
      • Increases monopoly power for those who can access it
      • Permits the concentration of wealth
    • The mechanisms that permit this
      • Banking secrecy
        • Although now an issue of declining significance
      • Offshore companies
        • No accounts
        • No ownership details
        • No director details
        • And quite likely no tax
      • Offshore trusts
        • Designed to delivery opacity on ownership and control
        • As well as perpetuate wealth ownership
    • The agents that permit this
      • Offshore governments
      • Those who promote tax competition
      • The lawyers, accountants and bankers who service this sector
        • And who write much of the law that allows this activity
        • The ‘Pinstripe Mafia’ as Prem Sikka calls them
      • Most especially: the Big 4 accountants
    • How does it work?
    • What we wanted
      • Effective markets
      • The control of monopolies
      • Fair competition
      • Tax paid in the right place at the right rate and at the right time by the right person
      • The rule of law
      • Reduced inequality
    • How to deliver it
      • We had to shatter the secrecy
      • And create the fear of being found out for the perpetrators
      • We could not change the secrecy jurisdictions one by one – they’d always be ahead
      • But we could shatter the secrecy they hid behind
    • The tools
      • Country-by-country reporting
      • Automation information exchange
      • Registers of beneficial ownership
      • Corporate tax reform
      • New data
    • Country-by-country reporting
      • Created by me in 2003
      • Simply requiring an MNC to publish a profit and loss account for every jurisdiction where it trades
      • Including intra-group data
      • Revealing in the process who uses tax havens and how much of that use is likely to be abusive
    • Automatic information exchange
      • Demanding that tax havens tell the countries where their clients really live:
      • That those people have accounts there
      • In what names they’re operated
      • How much is in them
      • Some basic income data
      • A ‘smoking gun’ to let tax authorities ‘elsewhere’ check if the data is disclosed to them
    • Registers of beneficial ownership
      • Literally who owns companies
      • And who benefits from trusts
    • Corporate tax reform
      • Delivering unitary taxation
      • Changes the whole logic of international group taxation
      • Starts from the global profits and apportions them to states based on real economic activity there indicated by
        • Third party sales made
        • Number of employees
        • Tangible assets invested
      • Totally inverts the current absurd system
    • New data
      • The Financial Secrecy Index
      • Research
      • And now beginning work on tax spillover effects
    • Has it worked?
      • CBCR
        • Now required for tax
        • EU getting towards public version
      • AIE
        • Now beginning worldwide
      • Beneficial ownership
        • About 30 countries signed up – but some way to go
      • Unitary taxation
        • On the agenda
        • Everyone knows the existing system does not work
      • Data
        • Delivered by the bucket load
      • The world is changing
      • And when the next crash happens we’ll be ready to exploit it