There have been more responses to Action Aid's report on the use of tax havens by FTSE 100 companies. One on a site called Shelter Offshore is interesting. Take the conclusion first:
Finally, a suggestion to all those people out there who expend excessive energy attempting to force a moral conscience on big name businesses with subsidiaries in low tax havens — you will never win.
Your voices and actions have absolutely no effect at all. Companies like these have shareholders to whom they are accountable. They will do the least they possibly can to show a seeming willingness for transparency, and they will do the most they possibly can to avoid as much tax as they can get away with.
Instead of fighting an unwinnable war why don't you put your brand of persistent pressure on your governments to spend all tax revenue responsibly instead, and then and only then will you ever have any leverage to bring big corporates back in from the cold.
Muse on that for a moment and what you'll see this person (unnamed, of course) is saying is that capital can and will do what it likes and nothing civil society or the polotical process can seek to do about it will stop it doing so. It's an interesting idea, but what is readily apparent is that first of all he's saying wealth matters and democracy does not. The only accountability he (I'm sure it's a he, these things usually are) is concerned about is that to wealth.
And what else is this person saying:
In spite of the fact that the report is well written, interesting, fairly well balanced and very informative, I have been left with a very clear sense of why all those battling to clamp down on offshore centres should actually continue to fail. What's more, I believe that everyone who can utilise legitimate tax breaks to help them reduce their tax burden should exploit every last one of them. You see, until there's accountability there should always be tax havens…
I believe that tax is a necessary evil — in theory the tax revenue raised by a nation's government keeps people out of poverty, it keeps them safe and healthy, it educates them and ensures that those who can contribute to the greater good of society do so for the enhancement of the lives of those who can't.
However, in the real world tax doesn't work like that…at least not in all the so-called ‘developed' nations around the world.
In the UK for example, tax is used to bail out banks, to bail out other nations' banks, to warmonger, and it is squandered and wasted time and again. In other words, there is absolutely no accountability whatsoever in terms of how the tax revenue raised is spent.
And that he says is because:
The Treasury isn't run transparently, it isn't run like a big business with shareholders, it isn't accountable to anyone.
But hasn't he noticed something called democracy? Oh, it's imperfect all right. I accept that. And I also agree government could and should be more accountable. But, democracy is undoubtedly the best form of government yet developed. And perpetually undermining the will of parliament is anti-democratic - as is the whole tone of this piece. That's because it's not saying I'll pay tax because the due process of law says I should. And I'll pay tax because it's what's needed to uphold democracy, capitalism and the whole system of private proieprty. No, it's saying tax if I want to on my terms for what I want and if I don't get what I want I'll try to undermine the system.
This is the 1% - the world's wealthy - speaking. This is the language of those who call democracy a tyranny because it demands the rich share. It's the language that threatens us all. It's the language that says the world's wealthy demand the overthrow of democracy. It's the language that leads to the corporate state.
And we will win against it. Because we believe that the answer is in the ballot box. And we're right to say that. And right is on our side. But it's not on the side of the 1%. And it's not on the side of the tax haven abusers. And ultimately I have a very strong belief that right wins. But not, I admit, easily.
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Harold Perkin wrote in the 1970s on the 18th century use of the word ‘friend’, which in the time of Old Corruption was utilised as a term for those being patronised – I get rich from helping my ‘friends’, and in turn my ‘friends’ help me. That quote sounds like the sort of thing a ‘friend’ would say – (and now for a message from our friends, the sponsor).
I would counsel this writer, and the constituency which he represents, to consider the lessons of history.
Is he aware what happened to Marie Antoinette? Wealth ain’t of much use when the people you treat with such disdain drop your decapitated head in a bloody basket.
But that only got rid of a talking head.
The problem with democracy, at least the model we have at this moment of time, is that the people running the show are not the people who we vote in to run the show.
The people we vote/voted in are [effectively] the paid servants of those who not only run the show, but own it.
A political campaign to change those we pay to run the show will only elect another load of servants, and not our servants.
It would be nice to think we could have honest politicians, but money corrupts everyone eventually, and lots of money corrupt lots of people.
As long as we have rich people we will have pathetic democracy, and that is not going to be changed by the ballot box.
What the guy in the article above is saying is:
“Whatever you do we will win, because we can afford to”
Firstly, I think it’s a little unfair to someone who’s urging people to “put your brand of persistent pressure on your governments to spend all tax revenue responsibly instead, and then and only then will you ever have any leverage to bring big corporates back in from the cold” of suggesting that democracy doesn’t matter. It seems to me that he’s saying that it does matter, but it should be used differently.
Also, that isn’t the 1% speaking. I don’t know anyone who doesn’t have serious issues with how a lot of tax money is spent. Now, maybe it’s only the 1% who can set up their affairs so as to minimise the tax the pay by dubious means.. but an awful lot more would do it if they could. As we know, that tax gap (whether you choose a big number or a small number) runs right across society.
I can happily say that, on a personal level, I have no beef with the amount of tax I pay. But am incredibly angry about huge chunks of what it is spent on.. and I do not think that the government is anywhere close to accountable. I think that if the population as a whole had a greater affection for the things we do together (and pay for together) then, at the very least, the moral case against the tax avoiders would surely carry much more weight?
The we need a Courageous State to deal with this
My suggestions on that coming soon…
A wise man (Abraham Briloff) once told me that if with all your might and effort you don’t reach the mountain top then that is not a failure. The biggest failure is that you never even dreamt or tried to climb.
Many of the social reforms that we enjoy today are the fruits of the labours of a minority, often attacked and ridiculed in their own time. Little has changed on that front.
What I also find strange about this person’s argument, Richard, is their emphasis on the ability of shareholders to hold companies to account, and to speak of this as if it’s a model of accountability that works perfectly. Note two references to this in the passages you quote, in both cases used as an example of an ‘ideal’. This seems to ignore the reality of shareholder relations in many companies, which from what I see and read are as skewed towards the interests of the few as contemporary democracy is, and are no more transparent or less ethically or morally compromised than many politicians or political systems.
It is an argument I did not pull out and thanks for doing so
In the UDS there is no shareholder accountability at all – and hasn’t been since the 1930s
In the UK it is much, much weaker than Westminster democracy
Your argument is right in logic and evidentially
Yes, shareholder democracy is nonsense. The weapon against corporates doing things people don’t like is consumer democracy – at least where there is a degree of choice.
It was consumer democracy that brought down the News of the World (by forcing advertisers to withdraw their custom). It’s consumer democracy that has made a dent in exploitation of third world workers by people like Nike.
And the advantage that consumers have over voters, is that every vote (aka lost customer) counts for something, and even if you boycott company A but keep dealing with company B (who’s just as bad) there is an impact and company B will know that it faces the same treatment. That’s why *all* the big nasty sportswear companies started showing a bit more interest in their third world workers when Nike were targetted.
‘We are the 99%’ is a great slogan.. but it’s nonsense. They’re not the 99%. They’re just another 1%. Engage enough of the remaining 98% and both consumer democracy and political democracy might have some use.
A courageous state is all well and good.. but it starts with a couragous population, surely?
The problem with consumer democracy is the massively unequal distribution of votes
” It was consumer democracy that brought down the News of the World (by forcing advertisers to withdraw their custom)”
Not really. Corporations, whatever position or side you take on them, do not like bad publicity or “toxic brands”. Unfotunately NoW became just that – a toxic brand – which is why the corporate advertisers ditched it.
And it was consumers who made it toxic
I presume you mean in a sense of relative spending power? So if I have £500 to spend then I have ten times as many votes as someone who has £50 to spend?
I agree to an extent. But, perhaps unlike in political democracy, with consumer democracy the action is in *not* spending the money. If we all agree that Nike are evil then we can all contribute equally by all not buying their stuff.
Now.. it’s still an issue if only people with no money care, and I decide I’ll still spend my £500 on Nike Crap-o-ware.. but gradual dents in market share have impacts on share prices and CEO bonuses, so there is progress. Further, overall inequality in consumer spending is far smaller (I presume) than inequality of wealth/capital.
And the truth is, my parliamentary vote counts for absolutely nothing. I’ve never lived in anything other than a safe constituency.. and never voted for a winner!. Me not buying anything made by Nike since 1992, as insignificant as it is, has made more difference to the world than the five parliamentary votes I’ve cast in that period.
@ mactheknife
As Richard says, it was consumers wot dunnit. There was a co-ordinated campaign targetting advertisers to withdraw.. and it spread like wildfire. One by one they realised that they needed to pull their adverts. Once a couple responded, the others had little choice. The public said ‘NOTW is toxic, and you might be too if you’re not careful’.
Remember… nobody cared much about phone hacking when it was politicians and celebrities being targetted. One or two media outlets (The Grain, notably) kept on.. but nobody cared and nothing was done. The public were not interested.
As soon as it emerged that tagrets included murdered children and families of soldiers, the public got interested in bigger number… the rest of the meda joined in the NOTW withchunt (they had no chioce)… everything that actually mattered came about because the public, en masse, said ‘this is not on.. and we ARE going to make a noise about it’.
It’s a shame that doesn’t happen more often.
My issue with this person’s statement and indeed the, in my view misjudged, aim of the coalition to reduce taxation on the lower paid is the representation of tax as a necessary evil. Taxation is, or at least should be, an important part of contributing to society. Income tax and National Insurance Contribution should be celebrated as an integral part of sharing the responsibility of societal needs. For this to work successfully of course, taxation needs to be seen to being used effectively, which is part of this person’s argument. Taxation should also not be used punitively, as this also has a negative effect on public opinion. At the heart of this issue is public confidence. That was why Labour sought not to increase income tax or NIC but then lost confidence by the so-called stealth taxes.
I don’t agree with the Tories on a lot of things but I do agree that a simpler tax system would be of benefit, not least because it is easier to see where the money goes. Hoever unlike the Tories I don’t want to see tax being decreased (especially this dreadful reduction in corporation tax – I personally think that corporation tax should be increased for larger companies and the additional revenue invested in Universities, as graduates make up a significant proportion of the wealth-producers for large corporations). Also making tax simpler means getting rid of tax havens. The UK government must take a lead on this, as Crown dependancies are some of the worst offenders.
Nah, it’s just another take on the ‘but I live in the real world’ argument with a touch of ‘it’ll all work swimmingly once you all behave’. Small c conservatism alive and kicking and it’s never yet been accused of achieving anything new.