If you’re not the side that Uncle Sam favours then it seems you’re just not allowed to win an election fairly and squarely.
I do expect there’s a lot of truth in this.
And it’s not to the credit of the USA or the media that it’s probably true.
FT.com / Comment / Editorial - Secrets and tax.
The FT has an editorial under the above title today. As they say:
The ability to keep secrets is an essential part of private banking. But sadly for the bankers of Switzerland and other tax havens, it is an ability they are losing. Stung perhaps by pressure on public budgets, governments are using ever cruder methods to pierce the veil of customer confidentiality. In recent years, the British have leaned on the Channel Islands, while the US has forced open the ledgers of Switzerland’s UBS by threatening it with commercial retaliation. But the Germans have come up with the most direct approach: purchasing stolen bank recordsfrom employees.
As the n ote:
The Swiss are outraged, and have accused the Germans of fencing stolen goods.
It is easy to see why the Swiss are alarmed. Germany is in effect establishing a market in bank data. Berlin may not be commissioning acts of larceny, but the “Merkel put” is a standing inducement for bank staff to breach their contracts. This is a potent threat to the private banking model. Even the possibility of leaks is damaging. If you were a German tax evader, you would not want to wait around to test the loyalty of the staff at your offshore bank.
So what’s the FT’s opinion on this:
It is surely legitimate to offer inducements for informers to testify. And it is in the public interest for tax cheats to be identified and forced to pay their dues.
Merkel’s put is a highly effective mechanism for achieving this. The Germans have raked in about €200m so far from LGT’s clients for their €4.6m, some of which they recouped by onward sales of data to other states. The Swiss are right to be worried.
The FT has this completely right: Switzerland is, by offering bank secrecy knowing that it will be sued to facilitate tax evasion, promoting crime. There is no other explanation for its actions. It is the Swiss and the Swiss alone who are wrong in the German - Swiss dispute on this issue. Germany is tackling crime, Switzerland actively facilitating it to the point that its actions might reasonably be considered criminal. Of course it is legitimate in that case to buy data to stop crime.
In the broader context it’s also about stopping economic warfare by Switzerland, and we’ve always paid informers to do that.
There’s just one issue I’ll argue with the FT on. They says:
Tax evasion is seen as morally ambiguous partly because it does not cause a big harm to a single individual but a small harm to many. Non-compliance is sufficiently widespread that people feel “it is all right because everybody does it”
I disagree. Undermining the rule of law is a big harm to all - especially when tax evasion does in the process deny the essential resources society needs to ensure a decent standard of living for all, as will increasingly be the case over the combing years. This is an enormous issue, and we should treat it as such.
Brendan Barber says on the TUC blog:
The final report of the National Equalities Panel (NEP), “An Anatomy of Economic Inequality in the UK” is out today – you can download the full thing or exec summary from the Government Equalities Office website. It’s an exceptional piece of work, describing in graphic detail just how unfair and unequal our society has become thanks to ‘market knows best’ policies.
The super-rich and powerful have a vested interest in closing down any debate about inequality by talking of the ‘politics of envy’ or ‘core vote strategies’. But inequality damages the economy and society for the vast majority of the population. Politicians of every party must now meet the challenge set by this devastating analysis.
Time and again the politics of envy are seen on this blog - delivered by the right.
They don’t realise we aren’t envious. We want equality because it makes everyone better off - rich and poor alike.
This is about building better societies - and that’s a long, long way from the politics of envy. It’s time for the right to realise this.
There’s a lovely page on the States of Jersey Treasury Department website that says with regard to its new law allowing the establishment of foundations:
Foundations (Jersey) Law 200-
Advice for Jersey residents considering registering a ‘Foundation’
It is advisable that, if a Jersey resident is considering registering a Foundation or has any interest in a Foundation he or she should provide the Income Tax Office with full details as to the reason(s) for doing so and the purpose of the Foundation and seek pre-clearance from the Comptroller before going ahead.
Failure to do so will lead the Comptroller to take the view that creating a Foundation has as one of the purposes, or the main purpose, the avoidance of Jersey tax.
The Comptroller will counteract such avoidance under the provisions of Article 134A of the Income Tax (Jersey) Law 1961.
Comptroller of Taxes
12 December 2009
So now we have incontrovertible proof: Jersey has deliberately created a structure for the use of those not resident in its jurisdiction which it knows has the sole or main purpose of tax avoidance (at best) which they consider best tackled by use of a General Anti-Avoidance Principle (for that is what their section 134A is).
If you wanted proof that everything I and others have said here over many years is true – here it is.
This proves Jersey is, without doubt, a secrecy jurisdiction. Secrecy jurisdictions are places that intentionally create regulation for the primary benefit and use of those not resident in their geographical domain. That regulation is designed to undermine the legislation or regulation of another jurisdiction. To facilitate its use secrecy jurisdictions also create a deliberate, legally backed veil of secrecy that ensures that those from outside the jurisdiction making use of its regulation cannot be identified to be doing so.
How can any place claim to be internationally cooperative or compliant on tax when this is what they knowingly, deliberately and wilfully do?
Note the phrase 200- simply means the final date on which the law is to be approved by the UK’s Privy Council on behalf of the Queen has yet to be advised.
The BBC and many others report:
The singer and activist Billy Bragg has threatened not to pay his taxes in protest against the bonuses being paid out by Royal Bank of Scotland (RBS).
He is calling on the government to intervene and limit the proposed £1.5bn that the bank, which is 84%-owned by the taxpayer, wants to pay in bonuses.
Mr Bragg said he felt frustrated and powerless to stop the bonus culture.
"We have a short window of opportunity between now and 31 January, but the two main political parties don’t seem to be interested," Mr Bragg told the BBC.
"This is a frustration borne out of a sense of powerlessness in the face of the bonus culture. I don’t know what else to do," he said.
I understand that frustration. And what Billy Bragg is doing is great gesture politics. But as I’ll say on air on London’s LBC radio in a few minutes, it’s not ultimately good politics.
I do think the ballot box is the way to present this message.
I do think lobbying parliament and meeting MPs is the way to go forward.
I do not approve of ‘tax strikes’ – the result could harm the poorest in our society. And it could harm the well being of public servants.
So now the gesture has been made I suggest tax is paid. And then use every democratic means possible to pursue the issue. Which should indeed mean limited bonuses, full nationalisation of RBS so it can be used as the proper basis for full banking reform and an end to the abuse that modern banking represents.
FT Alphaville » Cadbury, Kraft sweeten up.
It’s a long time since Cadbury was a Quaker business. But somewhere deep down it still thought it was.
About a decade ago I was involved in writing Good Business: Ethics at Work - Advices and Queries on Personal Standards of Conduct at Work
It’s a different world view. And we’re poorer for another, even remote exponent, disappearing.
Recent Conversations