{"id":32507,"date":"2016-02-26T17:46:56","date_gmt":"2016-02-26T17:46:56","guid":{"rendered":"http:\/\/www.taxresearch.org.uk\/Blog\/?p=32507"},"modified":"2016-02-27T10:09:52","modified_gmt":"2016-02-27T10:09:52","slug":"the-joy-of-tax-in-orlando","status":"publish","type":"post","link":"https:\/\/www.taxresearch.org.uk\/Blog\/2016\/02\/26\/the-joy-of-tax-in-orlando\/","title":{"rendered":"The Joy of Tax in Orlando"},"content":{"rendered":"<p>This is the outline of the talk I gave to the <a href=\"http:\/\/aaahq.org\/Meetings\/2016\/ATA-Midyear-Meeting\" target=\"_blank\">American Tax Association<\/a> (made up of US tax professors) in Orlando today:<\/p>\n<h1 style=\"text-align: center;\">Joy of Tax<\/h1>\n<h1 style=\"text-align: center;\">American Tax Association<\/h1>\n<h1 style=\"text-align: center;\">Orlando<\/h1>\n<h1 style=\"text-align: center;\">26 February 2016<\/h1>\n<ul>\n<li>The Joy of Tax\n<ul>\n<li>My argument is simple<\/li>\n<li>Tax is the tool with the greatest opportunity to shape the world we want to live in<\/li>\n<\/ul>\n<\/li>\n<li>This is a macroeconomic argument\n<ul>\n<li>We now know how money works<\/li>\n<li>According to the Bank of England every text book is wrong<\/li>\n<li>We now know loans create deposits and not the other way round<\/li>\n<\/ul>\n<\/li>\n<li>How tax works\n<ul>\n<li>Suppose we got tax wrong too?<\/li>\n<li>Suppose governments don't tax and spend<\/li>\n<li>But spend and then tax?<\/li>\n<li>Let me assure you that's what they do<\/li>\n<\/ul>\n<\/li>\n<li>How do we know?\n<ul>\n<li>Over $6 trillion of QE proves it<\/li>\n<li>But in fact we've always known this - this is why we have a national debt<\/li>\n<li>And why we have any government created money - because all of that is created by government over spending not claimed back by tax<\/li>\n<\/ul>\n<\/li>\n<li>So what does this mean?\n<ul>\n<li>Tax never, ever, pays for government spending<\/li>\n<li>The primary goal for tax is to reclaim the money the government spends into the economy?<\/li>\n<li>Why? To prevent inflation. I told you this was macroeconomics<\/li>\n<\/ul>\n<\/li>\n<li>Is that it?\n<ul>\n<li>No!<\/li>\n<li>But what it means is that w have to completely re-appraise what tax is for<\/li>\n<\/ul>\n<\/li>\n<li>The six reasons to tax\n<ul>\n<li>Reclaiming the money spent by the government into the economy as far as is needed to control inflation<\/li>\n<li>Ratify the value of money<\/li>\n<li>Reorganise the economy<\/li>\n<li>Redistribute income and wealth<\/li>\n<li>Reprice market failure<\/li>\n<li>Raise representation in a democracy<\/li>\n<\/ul>\n<\/li>\n<li>To put it another way\n<ul>\n<li>Tax is not about paying for anything<\/li>\n<li>Tax, from beginning to end is all about shaping the economy in the way w want in accordance with our democratic principles<\/li>\n<\/ul>\n<\/li>\n<li>Principles\n<ul>\n<li>Adam Smith\n<ul>\n<li>Equity<\/li>\n<li>Certainty<\/li>\n<li>Convenience<\/li>\n<li>Efficinecy<\/li>\n<\/ul>\n<\/li>\n<li>But this is not 1776\n<ul>\n<li>And these were largely standards for the administration of tax, not principles on which to base the tax system<\/li>\n<\/ul>\n<\/li>\n<li>So in 2016\n<ul>\n<li>Peace<\/li>\n<li>Equality<\/li>\n<li>Truth<\/li>\n<li>Simplicity<\/li>\n<\/ul>\n<\/li>\n<li>Applying this to a real example\n<ul>\n<li>Country-by-Country reporting<\/li>\n<li>An incredibly simple idea I created in 2003<\/li>\n<li>Why?<\/li>\n<\/ul>\n<\/li>\n<li>Peace\n<ul>\n<li>John Christensen and I, who were cofounders of the Tax Justice Network were sure there was a transfer pricing problem<\/li>\n<li>Developing countries were not collecting the money they were owed<\/li>\n<li>Multinationals were transfer mispricing profits to tax havens<\/li>\n<\/ul>\n<\/li>\n<li>The consequences?\n<ul>\n<li>Developing countries were not able to control their economies: the money they need to reclaim is not there to be had<\/li>\n<li>Nor is it available from the tax havens<\/li>\n<li>So there is international stress: the wrong people have the wrong money in the wrong place<\/li>\n<li>Developing countries are constrained on their spending because they have no ability to reclaim money<\/li>\n<li>And in many other countries the need to reclaim tax has been shifted from corporations \/ capital to wealth<\/li>\n<li>Stress!<\/li>\n<\/ul>\n<\/li>\n<li>But more than that\n<ul>\n<li>Equality<\/li>\n<li>Large and small business are not being treated the same: result a bias to the big<\/li>\n<li>And nor are countries being treated the same<\/li>\n<li>Whilst access to tax havens has been deliberately designed to creat inequality<\/li>\n<li>Faith in the integrity of the system was being undermined<\/li>\n<li>This was an issue to address if macroeconomic credibility and faith in government was to be preserved<\/li>\n<\/ul>\n<\/li>\n<li>Truth is key then\n<ul>\n<li>Regrettably some governments have not been committed to truth. Opacity has been their watchword\n<ul>\n<li>I have defined them as secrecy jurisdications<\/li>\n<li>If you want to know who they are read the Tax Justice Network Financial Secrecy Index<\/li>\n<\/ul>\n<\/li>\n<li>And some companies have not either<\/li>\n<li>Our aim when we set out as tax justice campaigners was to\n<ul>\n<li>Put large companies on the front pages of newspapers<\/li>\n<li>If they used tax havens<\/li>\n<li>And if they cost developing countries money<\/li>\n<li>With the aim of forcing change from countries and companies<\/li>\n<\/ul>\n<\/li>\n<li>And crucially we were always solution focuseed\n<ul>\n<li>Automatic information exchange<\/li>\n<li>Beneficial ownership on pubic record<\/li>\n<li>And country by country reporting<\/li>\n<li>There were others, but these were key<\/li>\n<\/ul>\n<\/li>\n<li>Country by country reporting\n<ul>\n<li>A method to encourage companies to pay the right amount of tax in the right place at the right time<\/li>\n<li>Where right means that economic substance matches accounting form<\/li>\n<li>Tell us\n<ul>\n<li>Third party sales<\/li>\n<li>Intra-group sales<\/li>\n<li>Number of employees<\/li>\n<li>Profit before tax<\/li>\n<li>Tax provided<\/li>\n<li>Tax paid<\/li>\n<li>Equity<\/li>\n<li>Retained reserves<\/li>\n<li>Tangible assets<\/li>\n<\/ul>\n<\/li>\n<li>We can do the big data:\n<ul>\n<li>Does your reporting match where your profits are likely to be earned<\/li>\n<\/ul>\n<\/li>\n<li>So far the evidence is they definitely do not<\/li>\n<\/ul>\n<\/li>\n<li>Won at the OECD as part of BEPS\n<ul>\n<li>Fir tax reporting<\/li>\n<\/ul>\n<\/li>\n<li>Now heading for public record in the EU, I suggest<\/li>\n<li>Why\n<ul>\n<li>To provide a tax risk template<\/li>\n<li>For\n<ul>\n<li>Tax authorities<\/li>\n<li>Investors<\/li>\n<li>Civil society<\/li>\n<li>The media<\/li>\n<\/ul>\n<\/li>\n<li>This is about holding global companies to account locally\n<ul>\n<li>And restoring equality for all - as efficient markets demand<\/li>\n<\/ul>\n<\/li>\n<li>And what of simplicity\n<ul>\n<li>Let me not forget the Holy Grail of tax<\/li>\n<li>There is no simple tax system in a modern economy<\/li>\n<li>But go back to Smith\n<ul>\n<li>The job is to make sure tax is paid<\/li>\n<li>Equitably<\/li>\n<li>Certainly<\/li>\n<li>Conveniently<\/li>\n<li>Efficiently<\/li>\n<\/ul>\n<\/li>\n<li>And that requires\n<ul>\n<li>Good law<\/li>\n<li>Investment in tax authorities<\/li>\n<li>Every encouragement to transparency<\/li>\n<li>And cooperation - call it peace in our time<\/li>\n<\/ul>\n<\/li>\n<li>We set out to change the world of tax\n<ul>\n<li>In some ways that is what we are doing<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p>A mindmap summary of this is here:\u00a0<a href=\"http:\/\/www.taxresearch.org.uk\/Blog\/2016\/02\/26\/the-joy-of-tax-in-orlando\/joy-of-tax-orlando-26-2-16\/\" rel=\"attachment wp-att-32509\">Joy of Tax Orlando 26-2-16<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>This is the outline of the talk I gave to the American Tax Association (made up of US tax professors) in Orlando today: Joy of<br \/><a class=\"moretag\" href=\"https:\/\/www.taxresearch.org.uk\/Blog\/2016\/02\/26\/the-joy-of-tax-in-orlando\/\"><em> Read the full article&#8230;<\/em><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[79,35,126],"tags":[],"class_list":["post-32507","post","type-post","status-publish","format-standard","hentry","category-country-by-country","category-economics","category-joy-of-tax"],"_links":{"self":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts\/32507","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/comments?post=32507"}],"version-history":[{"count":0,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts\/32507\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/media?parent=32507"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/categories?post=32507"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/tags?post=32507"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}