It's been very obvious on this blog that I have supported Barack Obama to be president of the USA. Of course, I have no vote, but that has never prevented me having an opinion on a subject.
As a matter of fact, I like a great deal about what Obama has said. But my support has been based on his policy with regard taxation, more than anything else. Take this summary of his approach to corporate taxation, published yesterday on a US website:
The US corporate tax rate of 35% is ludicrous because no one pays it. If UK tax law has loopholes then the US has gaping holes, so ludicrous are the reliefs and allowances that are available. I believe that it would be appropriate to close many of these in both jurisdictions. But what really matters most to me is that reference to closing international tax havens.
This is not just rhetoric, of that I am sure. Obama has put his name to the Stop Tax Haven Abuse Act already. He has repeated this commitment time and again throughout the campaign. And what is important about it is that it strikes at the very heart of the business model that the Washington Consensus has promoted.
Tax havens, or secrecy jurisdictions as I prefer to call them, are the 'Get out of regulation free' card of international banks and international business. Whenever someone seeks to impose a tax or regulation upon them they simply threatened to leave the jurisdiction that is fulfilling its democratic mandate to control business operating within its domain. It is only by getting rid of secrecy jurisdictions that we can take effective control of business regulation again, and it is vital that we do so even though I know that this will be fought tooth and nail by big business, and most especially by their most determined advocates, the Big 4 firms of accountants.
Closing tax havens strikes at the very core of the business model of these Big 4 firms. All of them operate in all the major, and most abusive, tax havens in the world. There is no commercial justification for their presence in Jersey, Guernsey, The Isle of Man, Cayman, the British Virgin Islands, Lichtenstein, Barbados and so many more. If there was they would also all be present in the U.K.'s Isle of Wight which has a larger population than most of these places. Of course, none is there. They are in tax havens for one reason only and that is to abuse the international tax and regulatory system on behalf of their clients. Their task, as they see it, is to undermine the effective regulation of business and in the process to undermine the process of government that is central to our democratic structures of accountability by destroying the revenue streams upon which that process is based. As a secondary goal, it is their objective to shift the burden of taxation from the wealthy to the poorest in society.
Based on discussions I have had, I do believe that Obama intends to tackle this issue. If he does he will fundamentally transform the international business environment, for the better. I do not underestimate the task, but in the process I know he will also transform the environment in other countries, such as the UK. A bandwagon effect will be created.
That's why so many of my hopes rest on the outcome tonight. But I do not take success for Obama for granted.