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Richard Murphy on tax and economics

The IPCC says we can afford to tackle climate change: now is the time for a Green New Deal

Sun, 04/13/2014 - 17:01

The Guardian notes today:

Catastrophic climate change can be averted without sacrificing living standards, according to a landmark UN report published on Sunday. It concludes the transformation required to a world of clean energy and the ditching of dirty fossil fuels is eminently affordable.

I, and the other members of the Green New Deal group, have been saying so for some time.

Now is the time for delivery. The era of fossil fuel is over. This is the time to release what we call ‘the carbon army‘ to transform our economy.

Cameron’s reform to GP services would be dangerous

Sun, 04/13/2014 - 07:53

I am intrigued that the government is saying that it is going to ensure GP services are supplied by people's normal doctors seven days a week, twelve hours a day, with the over 75s guaranteed access to their own personal doctor, and all that for an annual cost of £50 million.

To put that in context, that's £2,000 a doctor – maybe the cost of upgrading them all to the secure email system they're all supposed to consult on in the future.

Politely, this is nonsense. Now, I admit my expertise in this area is second hand as I am married to a GP, but I have as a result seen the detailed workings of a number of GP practices over the years and have discussed GP services with a wide range of doctors. There are three obvious points to make.

First, the proportion if NHS resources going to GPs is already falling, significantly. It is now less than 9% of all resources when it was over 10%. So the service is already underfunded.

That is compounded by increasing demand. I can remember only fifteen years or so ago when an average of four consultations per patient in a GP's list was normal: now it's over five and still rising. That is an enormous change.

Third, there is a desperate shortage of GPs to work in the existing system, largely because of the considerable demands made, long hours and massive stress.

Now please don't get me wrong: there are fat cat GPs in the existing system who treat the NHS as a market and profit making opportunity and so abuse it. And I am well aware that some GPs seem to think that a full time working week is four days, or that they need a half day off in a five day working week. For these doctors I think their time of using the system is over, and that's to be welcomed. But they're not a majority of GPs. Most already work very long hours and can physically do little more than they do now. Which is precisely why recruiting GPs is very hard indeed: young doctors rightly see little appeal in working in this way.

In that case can what Cameon and Hunt will be offering be delivered? I do not think there is any hope if it.

But more importantly, I think it would be very dangerous to try: pushing healthcare professionals beyond their limits is not a way to deliver safe care.

Section 2 of the Fraud Act lets offshore tax abuse be prosecuted now: so what else is Osborne going to do?

Sat, 04/12/2014 - 18:13

The government is claiming it cannot prosecute offshore tax evaders at present without proving intent on their part to evade tax if they omit information on their offshore bank accounts from their tax returns.

I have already said I do not agree. Nor do HMRC. This is the declaration on the 2013 tax return:

 

Now, let’s think about this for a moment, shall we?

If the tax payer knows they have an offshore bank account on which income has been earned and they fail to declare it then very clearly they have evidenced intent to evade tax. What further evidence is needed of intent?

And if they don’t declare it HMRC already say they can be prosecuted.

But HMRC say it’s hard to prove intent and new law is needed. Self evidently both claims are wrong or the statement they printed on the 9 million or so tax returns they issued in 2013 is wrong.

And what is the crime they can be prosecuted for now? It’s simple: it’s fraud. At one time it was called cheating the Revenue. The offence is described in section 2 of the Fraud Act 2006:

Everything needed to prosecute someone submitting  a false tax return is there. The signature on a false tax return is the fraudulent declaration. The gain is the tax evaded. And I do it think subsection 2 is an obstacle: the requirement that the taxpayer appraise themselves of what must be declared is already imposed by law. Ignorance is not an excuse.

I make clear, of course I want prosecutions. I have been calling for them for a long time. But I cannot help but think that today’s claims by Osborne, lamely defended by Gauke, look even more like posturing to me tonight then they did this morning.

My prediction is unambiguous: this new law, if passed, will change nothing.

Capital’s attack on wages goes on

Sat, 04/12/2014 - 10:01

One of the underlying important themes that the Tax Justice Network and I have emphasised over the last decade has been the continual shift of the burden of taxation from capital onto labour.  As if evidence were needed that this trend is continuing, this was the headline from an email that I received this morning from the OECD:

The relevant links are here.

Of course, the situation varies from country to country.  It is the trend that is important,  and that is a continuing explanation for the crisis that our economy, and that of the world at large, faces.  Growth without a rising share of labour income  is not possible:  inequality prevents it.

Osborne’s new offshore tax offence looks much more like a PR exercise than anything significant

Sat, 04/12/2014 - 09:54

According to the Guardian:

George Osborne is planning to make it easier to impose jail terms or heavy fines on British residents using offshore tax havens to cheat the exchequer out of billions in revenue.

The chancellor, who is in Washington at the International Monetary Fund’s spring meeting, has drafted a criminal offence of failing to declare offshore income as he steps up a long-running campaign to crack down on tax dodging.

At present, HMRC has to prove a British resident has deliberately sent funds abroad to dodge tax. The need to prove intent has undermined several prosecutions and allowed those under investigation to escape with only light fines, Treasury officials said.

Now, I am not someone  who is likely to oppose a clampdown on offshore tax evasion, but this statement is very odd.

First of all, there is already a criminal offence for failing to declare offshore income.  That offence occurs when a tax return is submitted without the income included upon it. Making a false declaration that the tax return  that has been submitted without that information is complete is, in itself, an offence, and therefore it seems hard to see why another  offence is needed.

Secondly,  it is not necessary to prove intent in the case of tax evasion cases: failure to declare the income is sufficient to prove that evasion has taken place.  I do agree that there are offences relating to the movement of assets offshore where intent is a factor,  but to suggest that these cover all tax evasion situations is misleading.

Thirdly,  I will be curious to see what the proposed offence is. It cannot be the case that having an offshore bank account is, in itself, illegal.  That would be contrary to EU law,  and even I have never argued that having an offshore bank account is, in itself something that should be considered an offence. It is the use of those accounts that is important.  But, in that case,  Osborne is going to have to fall back on some form of failure to declare to create the offence that he wants:  I suspect that  failure to notify the existence of an account will now be an offence, but if that is the case this is no different  in substance from failure  to notify income arising on that account on the tax return, which is already an offence, as I note above.

In that case,  whilst I have an open mind until I see the consultation document, this looks very much more like a PR exercise than it does to be a serious attempt to tackle offshore tax abuse.

And let’s remember, some of the most serious offshore tax abuse which is of greatest public concern relates to the use of tax havens by multinational companies, and this is something that George Osborne has gone out of his way to encourage. The duplicity of his approach is staggering.

The new person charged with stopping transfer pricing abuse is a KPMG partner – another fox in the hen house

Fri, 04/11/2014 - 14:43

It’s odd how much happens in a week when you just don’t feel up to  writing.

Some are big, but many are small and yet deeply symbolic. Take the appointment of a new head of transfer pricing at the OECD as an example. It is not mainstream news stuff – but in a  world where tax abuse by multinational companies is rampant and the demand that they be brought to book dominated many political agendas throughout 2013 this is important.

And that new head of transfer pricing at the body that is meant to set the rules to eliminate abuse is Andrew Hickman. No, I’d never heard of him either until now. But all you need to know is that he was a tax partner at KPMG in London. And that he replaces someone who was formerly a tax partner at PWC.

The Big 4 accountants continue to capture the world’s tax authorities so that they can continue to play their games of abuse – abuse they permit by being in all the world’s major tax havens, for a start. Now we have a head of OECD transfer pricing from KPMG and a chair of HMRC from KPMG, and something pretty similar is going on in Australia, if I recall correctly.

These people are not there to reform the system. These people are there to ensure the system is maintained as it is because those who profit most from it are, almost certainly, the Big 4 who have a monopoly in providing advice on how it, supposedly, works (even though, very obviously, it does not work at all – except for their benefit).

I’d like to say you could not make this stuff up, but you can. This is what neoliberalism delivers – the corporate state, run by business for the benefit of a few in business. In that case is it any surprise that right now it appears that the OECD is not making any real progress at all on Base Erosion and Profit Shifting? All that politics is now being shredded by those inside the system to ensure that the burden of tax continues to be shifted from capital onto labour – which is you.

Now you know why the fight for tax justice has to go on. It’s core to our freedom. We thought we saw some progress last year. Right now 2014 looks to be the year when business is fighting back hard – and so far, it’s winning.

A little tentatively, and with some tweaks, here and there

Fri, 04/11/2014 - 08:10

A little tentatively, I am back at my desk.

I’ve learned a lot in the last week. I have learned I can go a week without blogging, or even writing. It’s a very long time since that last happened. But I needed to stop.

I have learned that until I have an operation I am going to be in pain. That’s not fun.

As a result I have learned what restricted mobility feels like.

To my sons’ amusement, I have learned what it is like to beg them to slow down, rather than speed up.

I think really low fat diets are very boring, already.

I have explored the inside of my eyelids, a lot. And I have taken time to think. And read a bit. I realise I really like short books. I’d love to write a really effective one.

But actually, I’ve realised I want to be fit again and getting on with what really mattes to me – which is a fight for social justice for most people, who are denied it. And I’m still, very strongly of the view that tax is an essential component in delivering that justice.

It’s not bad to take a week off to realise that, with some tweaks here and there, what you’re trying to do is pretty much on the right track.