Here's an interesting paradox. Angel Gurria, OECD boss said today when talking about corporation tax that
taxing the "man on the street" wasn't economically desirable or even politically possible, so for many finance ministers the only option was "to cut, cut, cut more, rather than have a proper balance between revenue and the expense".
Of course, what he is saying is that we are suffering austerity because we can't tax companies. Or, in the case of the UK, of course, because we won't.
But at the same time as I have also noted today the OECD has said the UK should continue with austerity.
Does this mean the OECD has really given up the fight on corporate tax abuse despite the rhetoric?
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In 1966 Thierry Lombard explained to me why money was invested in Swiss Bank accounts when the rate of interest was much lower than that of a UK Building Society. Confidentiality and secrecy were important to a certain type of investor and they were prepared to accept the low rate of interest in exchange for them.
It seems that the situation has deteriorated since then, with an increase in the number of Tax havens available internationally.
I wish you well in your efforts to counter this threat to the country’s financial security.
Probably because the OECD recognises the reality of tax incidence and knows that more, more, more corporate tax actually means more, more, more from the pockets of employees, shareholders and customers.
Read what they said
They clearly do not think that
And they clearly know it’s wrong
As it is
Hi Richard
I am much enjoying ‘The Finance Curse’ http://www.taxjustice.net/cms/upload/pdf/Finance_Curse_Final.pdf
However I wonder if you could clarify something I have difficulty understanding? I apologise if it is obvious.
I quote:
“The central threat repeatedly made by financiers to justify less financial regulation goes along the lines of “don’t tax or regulate us too much or your financial centre will become less ‘competitive’ and we will relocate to Zurich
or London or Hong Kong.” But every time policy makers and regulators hear this threat they must remember:the financial centre is composed roughly of two parts. First is the immobile part, which is rooted in the local economy and cannot and will not leave in response to stronger financial regulation. The second is the flightier mobile part, which could potentially be prone to departure.”
And:
“The mobile/immobile distinction is similar to another rough analytical distinction that is commonly made in finance: between the ‘utility’ sector (the essential financial plumbing of an economy: offering ATM services, taking deposits, cashing cheques, financing local businesses and so on), and the ‘casino’ sector (the banks’speculative proprietary trading side that has been heavily implicated in the wake of the global financial and economic crisis7).”
In principle can’t the ‘immobile/utility’ function be shut down if banks were to carry out their threat to move? The buildings may remain but surely they can just close ATMs, stop taking deposits, cashing cheques etc if they are moving out.
Or is it termed ‘immobile’ because banks would actually consider it mad to cease all function in the UK simply for the reason of the introduction more stringent regulation?
Thanks
Move out means “for tax” but not “really’
They want to trade here but not pay tax here
This is why we need to change the world’s tax laws so tax is paid where trade is