Western hypocrisy

“European leaders and the West in general are criticising Greece for their failure to collect taxes. One of the points of our commission [Independent Commission for the Reform of International Corporate Taxation] is that the West has created a framework for global tax avoidance, but the US is opposing the creation of a UN framework and [even] discussions among all the countries to do something about it. Here you have advanced countries trying to undermine a global effort to stop tax avoidance. Can you have a better image of hypocrisy?”

Joseph Stiglitz, 13 July, 2015, Addis Ababa

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Walmart – master of tax avoidance

Walmart is the second biggest employer in the world (after army of China). Walmart is one of the most active multinational-companies lobbying for TTIP (EU-USA trade agreement) and TPP (Trans-Pasific partnership between USA and Pacific countries). And, Walmart, as the brand new, hot off the press research by Americans for Tax Fairness shows, it is also a very big and smart tax dodger. Make your own conclusions about Walmart, about how and why rich are rich, and who the real beneficiaries of TTIP/ TPP will be.

walmart

the price we pay

Hundreds of billions of dollars every year governments around the world are losing. How? The answer is – tax havens. The Price We Pay – this is probably the newest documentary on modern capitalism’s one of the cornerstones – tax havens, through which multinational companies can dodge or avoid paying tax. No one likes paying tax, one could argue, but equally, tax is one of the cornerstones of the social contract between the state and its citizens.

Moreover, as in this recent interview the director of this documentary Harold Crook puts it, tax havens contribute to increasing inequality, social unrest and disconnection of politics from the society which it is supposed to serve.

 

money does not smell. or does it?

in case you are among those, who wonder how the London’s properties have become so unaffordable to buy and if you wonder why in developing countries governments struggle to provide the basic public services to their citizens, here is one of the answers. Apparently, 2.25 sq miles of London property or in other words – 36,342 London properties – are held by hidden companies registered in offshore havens.

Find our more here. 

ti corruption

New label ‘fair tax’. Why it is good to pay tax

Next time I will pass a Lush shop I will buy a bar of soap there as my reverence for growing the pool of companies which pay their fair share of tax. Fair tax mark is the new fair trade. It is a label for good taxpayers and it recognises and accredits businesses which do not practice tax avoidance or dodging. In light of the current HSBC scandal, companies like Lush win without doubt. In this brief video Mark from Lush explains why he thinks it is better to be transparent, straightforward and avoid ‘scheming’. I think, it is inspiring and gives hope that thinks can change and be changed.

all you need to know about super-rich

This BBC documentary The Super-rich and Us (demonstrated in early January 2015) is probably the best film so far to shed some light on the ill-famous ‘1%’ and their lives. That 1% who caused global financial crisis in 2008 and who are living better than ever. UK has the highest number of millionaires per capita, yet it is also one of the most unequal developed countries, therefore this film asks – how come?

This film is about the myth of trickle-down effect, pro-rich tax regime (UK as the most important tax haven in the world and opportunities for innovative tax avoidance), corruption (HMRC helping companies to avoid or reduce tax), inequality, Thatcher’s ideological heritage, justice, and last but not least – democracy.

Watch it.

 

misbehaving in a tea party: review of UK Gold

If there is one good outcome of the 2008 financial crisis followed by cold-blooded austerity policies, then it is this increased attention to the massive tax avoidance, which has been taking place for years and years. This excellent documentary UK Gold (rent full movie here) is yet another contribution building greater awareness in society about the ugly side of the British wealth and the wealthy. It is about complete kleptocracy, clientelism and lack of democracy.

This film, firstly, disproves the myth that the most notorious tax havens like Cayman Islands, British Virgin Islands etc, are independent, autonomous from the British government. This argument of their autonomy from the UK government, which British government often uses to explain its in-action with respect to abolishment of tax havens, is farce. In reality all of these ‘independent’ territories have British governors appointed by the Queen (in addition to the locally elected governments) who enjoy power and influence over their internal policies and rules.

The facts are:

  • 1 in 4 UK companies pays no tax at all;
  • 25bn GBP a year UK is losing because of tax avoidance;
  • 360bn USD developing countries are losing as result of tax avoidance via tax havens (for comparison – annual international aid is about 120bn USD);
  • 98 out of top100 FTSE companies use tax havens;
  • Cayman Islands is the 4th largest financial centre in the world and has more money than NY;
  • Corporate tax avoidance has been constantly rising;

 So, with these facts on the table, one may wonder why then British government is so unwilling to get rid of tax havens? Why it tolerates this escape from responsibilities, undermining of democracy and theft of common purse?

Some of the explanations are:

  • Legislative process has been captured by multinational companies and influential lobbyist groups;
  • Government’s own links with tax havens or their own reliance on tax havens to maintain or improve their wealth (apparently Cameron’s inherited wealth was very much created through tax havens);
  • Over 60 MPs have relations with companies related to tax havens;
  • The City of London, the mother of all tax havens, is the top lobbyist in the UK, the oldest lobbyist in the world, and has a designated seat in the parliament;
  • Since mid 20th century international finance has been the key sector, which has preserved UK’s world power status. Without the City of London and its worldwide cobweb of tax havens and further plans of expansion and influence (the cityUK is behind the ambitious project of making Nairobi the international finance centre) UK would be a medium-size economy;
  • what will the firms like Maples (the leading international law firm advising financial, institutional and business clients around the world on the laws of the Cayman Islands, Ireland and the British Virgin Islands).do, once they wont be able to makes fortunes out of advisory services on ‘developing innovative and effective solutions’ on tax matters?

The last G20 and G8 summits indeed have expressed concerns about the negative impact of tax havens and have even called for concrete actions against them, however, in reality the hyperactive signing of cooperative agreements is far from sufficient to make a significant change. It’s like putting a plaster on an infected wound; nobody will be able to say that you have not done anything, but it will only hide the infection but bacteria will continue growing.

US and EU has been more progressive in addressing tax haven issues, but will they be strong enough to challenge the UK’s status quo?

One of the main narrators in this film, father William Taylor, who is extremely passionate about tax justice issues and wants to make politicians and companies accountable for this theft, ironically calls his own actions of speaking up and challenging the establishment as ‘farting at a tea party’ – you are just simply not supposed to talk about these tings! How dare you, but we should. We need more fathers William Taylor and more such noise-making films like the UK Gold.