I quote at length from the Guardian on a new report from the Institute for Fiscal Studies out today:
Britain’s poorest families have suffered the most from the coalition’s welfare cuts and tax rises, according to a study by the UK’s leading tax and spending thinktank.
The Institute for Fiscal Studies said households were on average £1,127 a year worse off after the implementation of reforms since 2010.
Figures that assess the impact of the VAT rise to 20% and higher personal tax thresholds alongside a range of benefit cuts, found that the income of the lowest 10% of earners fell by more than 4% while the richest 10% suffered a drop of 2.6%.
The so-called squeezed middle were the least affected by cuts to tax credits and housing benefit that hit the poorest families.
I could write at length on this.
Or I could just say that this was not accident, but designer.
And that the designers deserve to be called by any and every term of abuse you care to throw at them.
The following letter is being sent to leaders of all the UK’s political parties and many other politicians. It was organised by the Open Government Partnership. I am one of the many signatories.
The UK Open Government Network is a group of organisations and individuals committed to making government work better for people. We call on all political parties to put the principles of open government at the heart of their plans for government.
Open government is the simple but powerful idea that governments and institutions work better for citizens when they are transparent, engaging and accountable. Open government is critical to the well-being, prosperity and empowerment of citizens in the UK and around the world. It helps to ensure that those who take decisions that affect people’s lives are properly accountable and responsive to the public – supporting the effective, equitable and sustainable use of resources, delivery of public services and exercise of authority.
With many institutions having lost public trust, and citizens feeling disempowered and disengaged from the political system, it is vital that the principles of open government are adopted and promoted by all political parties and put into action by the all parties in government.
The Open Government Partnership provides a platform for reformers inside and outside governments around the world to develop reforms that “promote transparency, empower citizens, fight corruption and harness new technologies to strengthen governance”. Since its foundation in September 2011, over 2,000 commitments have been made by 65 participating countries, covering a third of the world’s population. Through an open and collaborative policy process, our network supported engagement and outreach on setting the commitments in the UK’s latest open government National Action Plan, and have supported the UK’s leading role in the OGP.
We are committed to collaborating with and challenging governments in the UK to develop and implement ambitious open government reforms through the UK’s membership of the Open Government Partnership. We call on all political parties to:
1. State their commitment to the open government principles of transparency, participation and accountability in your party manifesto, and outline the open government reforms that you will introduce.
2. Commit to working to further the impact of Open Government Partnership domestically and internationally.
3. Commit to implementing, with the UK Open Government Network, an open and collaborative process for developing the UK’s third Open Government Partnership National Action Plan.
Open government requires a wide range of reforms and the collaboration of government, civil society and business to make a reality. We invite all political parties to work with us towards building more transparent, engaging and accountable governments in the UK.
1. Alexandra Runswick, Unlock Democracy
2. Andy Williamson, Democratise
3. Angus Hardie, Scottish Community Alliance
4. Anne Thurston, International Records Management Trust
5. Anthony Zacharzewski, The Democratic Society
6. Aongus O’Keeffe, Inspiring Impact Northern Ireland
7. Brent Norris, Green Collar Technologies
8. Catarina Tully, FromOverHere
9. Cathy James, Public Concern at Work
10. Cedric Knight. GreenNet
11. Chris Shaw, University of Oxford
12. Chris Taggart, OpenCorporates
13. Chris Yiu, Scottish Council for Voluntary Organisations
14. Claire Schouten, International Budget Partnership
15. David Banisar, ARTICLE 19
16. David McBurney
17. David Mcnerlin
18. Diane Sheard, The ONE Campaign
19. Fiona Garven, Scottish Community Development Centre
20. Fiona Savage, Collaborative Change Practitioner
21. Gavin Hayman, Global Witness
22. Graham Smith, University of Westminster
23. James Perry, Panahpur
24. Janet Kells
25. Jeni Tennison, Open Data Institute
26. Jennifer Tankard, Community Investment Coalition
27. Jessica Crowe, Centre for Public Scrutiny
28. Jim Killock. Open Rights Group
29. John Chambers, The Archives and Records Association
30. John Hawkins, Construction Sector Transparency Initiative
31. John Lotherington
32. John Shaddock
33. Jonathan Breckon, Alliance for Useful Evidence
34. Jonathan Gray, Open Knowledge
35. Karl Wilding, NCVO
36. Kev Kirkland, Data Unity
37. Kris Nixon
38. Laura Taylor, Christian Aid
39. Linda Cox, Shrewsbury Dial-a-Ride
40. Linnea Mills
41. Lucas Amin, Request Initiative
42. Malcolm Rigg
43. Malou Schueller, Progressio (CIIR)
44. Mariam Cook, PositionDial
45. Mary Field, Youthnet
46. Miles Litvinoff, Publish What You Pay UK
47. Nick Perks, Joseph Rowntree Charitable Trust
48. Nim Njuguna, Kenya Diaspora Bureau (UK)
49. Oliver Escobar, Citizen Participation Network
50. Owen Boswarva
51. Paul Anders
52. Paul Bumstead
53. Paul Lenz, mySociety
54. Prof. John Barry, Queens University Belfast
55. Rachel Davies, Bond Anti-Corruption Group
56. Rachel Oldroyd, The Bureau of Investigative Journalism
57. Richard Jackson, Voluntary Action Leeds
58. Richard Murphy, Tax Research UK
59. Robert Barrington, Transparency International UK
60. Rupert Simons, Publish What You Fund
61. Simon Blake, Compact Voice
62. Simon Burall, Involve
63. Simon Hanson
64. Simon Phipps, Meshed Insights
65. Stephen Elstub, University of the West of Scotland
66. Tamasin Cave, Spinwatch
67. Thomas Pogge, Academics Stand Against Poverty Global
68. Tim Davies, Practical Participation
69. Tim Hughes, UK Open Government Civil Society Network coordinator
70. Toby Blume
71. Wendy Faulkner, Talking Tweed
72. Winnie McColl
Larry Elliott is right to be sceptical about whether the trillion-euro dose of QE will solve Europe’s economic problems (Report, 21 January). Like its £375bn UK predecessor, it will buy government bonds from banks and, as happened here, that money won’t generate economic activity in the real economy, but instead will doubtless benefit the banks and the asset-rich by inflating property prices, the stock market and commodities. What is needed is a Europe-wide debate about what kind of QE can actually help its flagging economy. The Green New Deal group paper Europe’s Choice – How Green QE and Fairer Taxes Can Replace Austerity proposes the introduction of “green infrastructure QE”. This would fund investment in the continent’s renewable energy supplies, ensure all buildings are energy efficient and revitalise local and regional public transport links. Paying a living wage would help to boost governments’ tax revenues and address climate change. Another huge revenue source could come from tackling the non-payment of taxes that we estimate might cost the governments of the European Union €1 trillion a year.
Caroline Lucas MP, Colin Hines Green New Deal group, Richard Murphy Tax Research UK
The European Central Bank has launched its QE programme, which is planned to print €1.1 trillion (that’s €1,100,000,000,000) of money in the Eurozone over the next two years.
Let’s put this number in context. The EU tax gap – that is money unpaid because of tax avoidance and tax evasion over this period will be bigger than that. I have estimated this loss to exceed €1 trillion a year.
And let’s also contextualise this: the EU as a whole has GDP of €13 trillion.
However looked at then the QE programme that has been announced is enormous. So why do it? The aim is simple: it is stated that the aim is to create inflation of 2% when the Eurozone is currently suffering deflation which could become endemic if not addressed.
But, and there is an enormous but to this, whilst the QE programme might achieve the goal of inflation (and might not) whether it does so or not the cost will be enormous.
I stress, I am not opposed to money printing, which is what this programme is.
Nor am I opposed to central banks buying government debt (which I suspect the vast majority of this will be) knowing it will never sell it again, which permanence is inevitable in the current case because there is no situation that I can foresee where markets will ever have the capacity to reacquire the debts now to be purchased by the ECB.
Let’s then be under no illusion: this is a debt cancellation programme through the creation of new money and those who suggest otherwise are as deluded as those who think Greece will now repay all its national debt. All if that is fine, acceptable, and indeed what is needed right now to restore inflation.
What is not needed though is the consequence of this particular type of QE programme which will buy back debt from banks and other financial institutions. These organisations have in recent years proved themselves entirely clueless in the art of investing money for social benefit. Despite this the QE programme will leave these bodies awash with cash. There are inevitable consequences.
First, because these bodies only invest in the private sector and there is no demand for new cash for private sector investment in the EU, or beyond it, this money will not be invested in new productive capital. Not a new job will be created as a result. Not a single social need will be met. Instead the money will be used for speculation. That may be in stock markets, but as much will be in commodities, and because all players in these markets will have more money to gamble the result is inevitable: asset prices will rise, significantly and artificially. This will not be the market at play, this will be distortion. There will be a boom. A bust will follow.
But in the meantime market gamblers will celebrate their profits, acclaim their abilities, and demand their bonuses. A few will get very rich indeed. Many will pay the inflated commodity prices and vast numbers of young people will end up priced even further out of property markets, where a few will purchase considerable portfolios and yet more trophy apartments that prevent access to housing at affordable prices to millions.
This will be socialism for the rich.
There is an alternative. The Green QE programme I have promoted would also involve central bank purchasing of debt, but this would be debt issued to fund hospital, school and infrastructure programmes as well as green energy and energy saving programmes to provide long term benefit to the society at large.
This programme would create jobs in every town and most villages throughout Europe. It would deliver social value. It would create inflation because ordinary people would have more money in their pockets because of increased employment and because wages and not asset prices would have been forced up.
This programme would not lead to bust: this programme would build the housing and other resources Europe needs. And this programme would deliver skills, hope and prosperity, and as costlessly in terms of money creation as the planned QE programme, because just as in that case none of this debt would ever be repaid. It’s a costless injection into the real economy, not the speculative one.
I am not opposed to turning on the money printing presses. But I am if the result is a boom to be followed by a bust with a few benefitting enormously at cost to many in the meantime. That’s what we’re getting and that is tragic when an alternative exists that could deliver so much social benefit. This is the time for QE, but Green QE is what we need and is not what we’re getting.
I gave evidence to the Scottish Affairs Committee yesterday on the importance of being able to track the ownership of Scottish land through offshore companies. This blog covers issues on which Idid give evidence and other matters where questioning did not result in the issues coming up during the session. It will be submitted to the committee as a follow up submission for their consideration.
No one, not least me, will deny the importance of this issue and I was, of course, happy to explain why this issue remains of enormous concern despite the forthcoming introduction of automatic information exchange from the UK’s Crown Dependencies and Overseas Territories, amongst others. The fact that all these places have joined together behind the leadership of Cayman to say that they are refusing to create public registers of beneficial ownership for the companies located within their jurisdictions makes a mockery of the commitments they gave to David Cameron before the G8 (as it then was) in June 2013. That they also say that they have refused to cooperate because such registers undermine their economy’s business models is also telling: that business model is based solely on the provision of secrecy to persons from outside their jurisdictions to make sure they cannot be identified to be undertaking activities which, for a variety of reasons, legitimate and illegitimate, those people would not wish the world to know they were doing.
It is my opinion that the Committee should not sit and wonder what to do about this: they should legislate to deal with it. In my opinion the UK parliament has an absolute right to legislate for matters relating to the foreign affairs of both the Crown Dependencies and Overseas Territories. I am aware that this is contentious, but it is indisputable that the UK is responsible for the foreign affairs of these places, even if we have delegated certain tasks to them. And it is also indisputable that if we are responsible for those affairs then we can legislate on them on behalf of these places, with our law having application in the territories for which we are responsible. And if that is the case we have an obligation to act when we need to do so. If there is any doubt, note that not a single country in the world objected when Whitehall decided to take over direct rule of the Turks and Cacaos Islands: they couldn’t because we had an absolute right to do just that if we wished, as we have in any of these jurisdictions. The ‘self government’ they enjoy is a choice by the Westminster government as much as, to be candid, has been self rule in Northern Ireland and as, at present, is the Scottish Parliament, which has not been been established on a permanent basis, as yet.
Now it so happens that I think that there is good reason to devolve power to all these places as far as is possible, but like all power I think that it is granted with the expectation that it be used responsibly. This, unfortunately, is a condition that has yet to be met by any of these places precisely because they have abused their right to legislate to undermine the sovereign rights of other locations, including the UK. That, of course, means that their maintenance of those legal systems that are key to their economies but which are only so because they are designed to harm other places a foreign policy issue.
I stress, I have no problem with these places offering secrecy to their own populations so that those people can avoid any obligations imposed locally. If these governments really wish to undermine the good governance and sound management of their own economies and they do not impose a financial risk on the UK as a result (because we are also, indisputably, the guarantors of these governments and their financial obligations) then that is their own choice. But if that choice is extended so that other governments are harmed my suggestion is very simple and straightforward: taking such action is is not a matter on which these governments can decide; or rather it is one where they can suggest but the UK can over-rule. And the time to over-rule has now come.
The governments of the UK’s tax havens have blatantly chosen to ignore the call the UK has made for the establishment of company registries with beneficial ownership recorded on public record to ensure that all parties, including other states, know who might be making use of the benefits of limited liability entities that these jurisdictions permits to be created. And if that is their choice then we in the UK have a choice, and even more than that, an obligation to over-rule them since we are responsible for their foreign affairs.
I would strongly recommend that the Scottish Affairs Committee recommend the investigation of this legislative possibility that I am quite sure exists if the political will to enact it was established.
There is, however, another issue on which action with regard to company regulation is required and this, as I pointed out to the committee, is within Scotland itself. As I have pointed out for some years now, company regulation in the UK as a whole is dire. Around 400,000 companies a year are struck off the Register of Companies because they fail to comply with their most basic legal obligations, including failure to file accounts or failure to file the annual return forms that currently provide detail of the legal ownership of companies and which will in future supply details of the beneficial ownership of those organisations. A few thousand prosecutions a year are brought, but many of those are abandoned if missing accounts or forms are filed after the prosecution begins. In effect, this means that the risk of penalty for failing to comply with company law throughout the UK as a whole is very small indeed. In Scotland, however, it is even lower. According to data published by Companies House they have no record of any prosecution for breaches of company law in Scotland since 2008, and this is important as it does have its own company registry.
The implication of this is clear: it would seem that the administration of company law in Scotland has, for all practical purposes, ceased. As a consequence the chance that anyone will feel obliged to actually comply with the new legal requirement that they disclose the beneficial ownership of a company if they think it not in their best interest to do so is very small indeed. Or, as I put it, this will be, at best, an honesty box arrangement on which no one should place any dependence as to truth or accuracy, let alone completeness. If Scotland is really serious about finding out who owns its companies then it needs to do four things.
First it must invest it the administration of company law in Scotland and vigorously pursue those companies who fail to comply with their obligations. This requirements a commitment to law and order.
Second, it must require a register of trusts on public record as well as of companies, or all relevant details will be hidden behind discretionary trust arrangements. I have to admit the evidence HMRC gave on this issue to yesterday’s committee was naive on this issue.
Third, it must demand that information be supplied by UK banks to HMRC on the companies to which they supply banking services, including names and addresses of directors and places of business as well as branch and account details and in formation in balances and total sums deposited in a year, all of which they must now have for UK automatic information exchange obligations so there is no significant cost to supplying this information. If there was, it should be covered by an increase in the company annual return fee. It is absurd that from 2016 this information will be supplied by banks in tax havens if the owners of a company there are UK resident but the information will not be supplied domestically.
And finally, property letting companies incorporated overseas must be deemed to be trading in the UK and so be required to file their accounts in this country, which is not (absurdly) the case at present. Then the same information regime on beneficial ownership could be applied to them as will be applied to UK companies.
All of this is possible. The abuse of land ownership rights created by anonymity has to end. The opportunity and the means to do so exist and all that is necessary is political will to put the measures in place. This committee needs to act by recommending that such powers be put in place, now.
I sincerely hope they do.
It would seem that almost uniquely the Guardian has reported yesterday’s televised open such on the OECD’s Base Erosion and Profit Shifting process in Paris that was dominated by what might best be called the fight back of the tech giants.
As they report:
Lobby groups representing Google, Amazon and other powerful US tech multinationals have launched a fierce attack on global plans to stamp out artificial corporate structures used to avoid tax.
In responses to the latest stage of a two-year, G20-led programme of international tax reform, lobbyists for the US tech industry condemned the plans as riddled with “fundamental flaws” and said parts “must be rejected”.
I admit I half wish I had managed to stay in Paris to witness this, but was in the House of Commons instead. The rejection of the process is, however, hardly surprising: we’ve not yet seen much of business voluntarily agree that it has a duty to pay the right amount of tax in the right place at the right time without some coercion applied.
The rejection appears to be of many issues, across the range of issues the OECD has proposed, from country-by-country reporting to attempts to reform the rules of what are called permanent establishments.
But what I did really find interesting in the Guardian’s report, which is sketchy on the day’s events, is the news that Google is willing to align itself with some of the most right wing lobby groups in the US as part of the tax fight:
Some reports have suggested Google has been making concerted efforts to broaden its engagement beyond historic ties to the Democratic party, hiring Republican operatives and building campaign contributions to rightwing candidates from its political action committee. Among those receiving support from Google are the Heritage Foundation, the American Enterprise Institute and Americans for Tax Reform.
The libertarian Cato Institute, funded by the billionaire industrialist Koch brothers, said it had received support from Google in the form of free web advertising. Among the issues on which this lobby group campaigns is taxation; it expounds the virtues of tax havens and has described the G20-led efforts to reform international tax as a “global tax cartel” plot.
These lobby groups are those who most definitely defend tax haven practices.
Many oppose corporation tax altogether.
And they have real problems with the attempts to gather data by way of international cooperation to ensure people pay tax where they owe it. That, they say, is anti-competitive, as if states compete and should not be allowed to cooperate.
That this breaks the law is no concern to them. Amongst the arguments such groups have offered is the claim that money made outside the state where a person lives should not be taxable. That would, of course, appeal very strongly to Google.
That all of this happens to fuel inequality whilst denying government’s revenue is not their concern: these groups argue government has no business doing anything but defence and protecting property through law enforcement. Pretty much everything onwards from health (in fact, most especially health) should be delivered by the private sector with no state support.
So this is the vision of the world Google now appears to be buying into. It’s a very, very long way from ‘Do no evil’.
I am speaking at the following event on 2 February:
If you live in the area it would be great to see you.
In the world of Davos only investors matter.
And PWC has their interests very close to its heart
At cost to the rest of us, of course.
I ask the question in the title of this blog at least in part for practical reasons.
As I mentioned early yesterday morning, I engaged in a round trip to the OECD in Paris yesterday that took more than 18 hours to appear before a committee made up of representatives of the BEPS nations to discuss the way in which tax relief is given to multinational corporations for the interest charges they incur.
As Luxleaks has shown, interest is being used to divert profits to low tax jurisdictions on an industrial scale, so this apparently rather dry and pretty technical issue is important. When Eurostar was late both ways though; when I did not find time for a proper meal at ay time in the day, and when I finally got home just before midnight I confess I did, at least momentarily, wonder last night why I chose to be one of those who partakes in such processes.
I feel slightly the same about today, when the suit will be dragged back on again as I head to parliament to appear before the Scottish Affairs Committee this afternoon to give evidence on the problems of identifying the beneficial ownership of land.
So why do it, especially when there is no certain way of establishing that effort gives rise to outcome? My guess is that I hope that there will be an outcome. I am in many ways a pessimist: I presume nothing will change. As a result I remain continually surprised, and pleased, that contrary to my expectation change can and does occur. But what experience has shown, to me at least, is that change happens for at least three reasons.
The first is that a technically sound demand is made.
The second is that it can be demonstrated that a reasonable number of people believe that change will result in an enhanced outcome on the issue.
And third, that sentiment is sufficiently supported to attract media attention and so attract the attention of those capable of effecting change.
The first part of this process is the one in which I spend most of my time, although I am, of course, aware that some would dispute it. Developing the technical basis for the arguments I presented on a formula basis for interest allocation between states and solving the accounting issues that have to be addressed to make that work has involved a great deal of time and effort, writing and exchange with a limited number of other people (most especially Prem Sikka and Sol Picciotto) to get the argument to the current stage, and as yet and even so much of it remains unpublished. Those long hours pay off when a difficult concept can be presented, I think coherently, to address what is a very real issue.
But none of that would be possible without the engagement of the NGOs and campaigners who have put this issue on the agenda. Oxfam were at yesterday’s meeting, and trade unions were represented, but most NGOs weren’t and that’s fine: those present would not have been heard without the pressure for change the NGOs have helped create. The roles we have are different and distinct. Developing country aspects of the issue, which were firmly on the agenda, and where it looks like I have more to do, would have been ignored, I suspect. but for NGO pressure.
And then there’s the media. Yesterday was conducted on a Chatham House basis. That does not assist media coverage and there will be none. Except for this note, limited as it is and as non-specific as it necessarily has to be to comply with the requirement of that rule.
Was it worth it? I hope so. That’s all I can say. It’s the basis on which I work.
Now it’s time to find a tie and to prepare for another day and another committee and to ask for another change that might make help deliver tax justice.
I had a long, and enjoyable, discussion on the impact and consequences of wealth inequality in the UK yesterday. Who with does not matter: at the end of nearly two hours of discussion I was asked to identify a likely tangible consequence of this growing inequality, which was a surprisingly easy task. I was able to foretell the end of entrepreneurial Britain.
Although many readers are unaware of it, and many opponents ignore it, I have a bit of history as an entrepreneur, having created not only a successful firm of accountants but also a couple of dot.coms and chaired, been CEO or CFO of about ten other companies over a period of about twenty years, most of which are still trading now or have successfully merged. So entrepreneurship is something I know something about, not least because I advised (and still do on occasion advise) many other companies.
In that case let me summarise my concern. Experience tells me that the vast majority of small businesses do not access conventional capital markets. They do instead raise money from family or friends or via bank borrowing, which when it gets to any serious level is dependent upon bank security charged on freehold property. Without that borrowing secured on property most small business cannot and will not grow.
But the fact is that most young people – and most new, entrepreneurial ideas unsurprisingly come from young people – will not own property in the future, let alone property in which inflation has provided them with a convenient equity stake. So their access to capiral will virtually disappear when at the same time they will be burdened by student debt and, if family or friends have been willing to help, it's probably been to help them mitigate the costs of university or get a deposit for a property in the parts of the country where prices are not growing because those are the only places they can afford to live.
So, entrepreneurship is going to be denied to tens or hundreds of thousands of potential small businesses which, however good their ideas, will not grow in the future.
But what, you might say, of those with wealthy parents? I am afraid you should not look there for hope. Time and again it has been shown that the psychology of wealth is to preserve it, not risk it. So those with wealth invest in rents i.e. buy to lets, portfolio stock market investments, secured loans and other low risk income streams because their greatest fear is losing what they already have. Their motive is retaining, not growing, which means they make very poor entrepreneurs, but very good bankers and senior managers in large companies who have never taken a risk in their whole careers at potential real cost to themselves. In contrast, entrepreneurs are usually those who have little and want more: the attitude is wholly dissimalar to those with wealth.
The inevitable consequence is that entrepreneurship will wither in the UK for lack of access to capital. And this matters. Small businesses account for about 40% of UK jobs and much of its innovation and growth. Wealth concentration risks all that.
Don't think wealth concentration does not matter then. If you believe in a string mixed economy in the UK (and I do) then the consequences of growing wealth concentration in the UK are deeply worrying. I foresee the decline and death of entrepreneurship in this country, and I would mourn that.
NB: written on an iPad on a train: apologies for typos if they remain. I always find editing hard on the iPad
There have only been three Tuesday's this year and this will be my second in Paris.
Today's meeting is on how to provide tax relief on interest paid for multinational companies who, as Luxleaks has shown, are in the habit of generating such costs internally to shift profit to low tax locations.
The meeting is small and only for civil society and academics: business get their own show before we all meet again on 17 February.
There will, as far as I know be just seven present apart from those from the OECD. Three of us are from the BEPS Monitoing Group that is so ably led by Prof Sol Picciotto. Three are academics and one will be representing trade unions (I am not, on this occasion).
You probably have to be an enthusiast yo look forward to such meetings, but I am. This is where change can happen. I am hoping.
This is from Oxfam’s new report on inequality, out today:
Companies have responded positively to the Ebola crisis: some pharmaceutical companies are investing in research to find a vaccine, the full costs of which are not yet known. The three pharmaceutical companies that are members of the International Federation of Pharmaceutical Manufacturers & Associations(IFPMA) and that have made the largest contribution to the Ebola relief effort,have collectively donated more than $3m in cash and medical products.
But the amount of money that has been spent on Ebola and other activities that have a broader benefit to society needs to be looked at in the context of their expenditure on corporate lobbying to influence for their own interests. These three companies together spent more than $18m on lobbying activities in the US during 2013.
To put the funding for the Ebola crisis in perspective, the World Bank estimates that the economic costs to Guinea, Liberia and Sierra Leone was $356m in output forgone in 2014, and a further $815m in 2015 if the epidemic is slow to be contained.The largest increase in wealth between 2013 and 2014 by a single pharma-related billionaire could pay the entire $1.17bn cost for 2014 – 15 three times over. Stefano Pessina increased his net worth by $4bn, from $6.4bn to$10.4bn in a single year; the largest single increase in wealth of all the billionaires listed with pharmaceutical and healthcare interests.
This is the reality of inequality: billions suffer and a few gain in ways they can never enjoy.
We have a world where values and wealth appear unrelated issues.
There is a fair description of quantitative easing as it has been practiced in the UK and as it is likely to be practiced in Europe. It is socialism for the rich in action.
The government buys back vast quantities of its own debts from the financial services organisations that currently own it and they in turn use their new found cash to trade and speculate in ways that firstly makes a lot of money for bankers and their friends and secondly that increases the wealth of the already well off.
European equities are inching to seven-year highs as traders bet on more stimulus this week from theEuropean Central Bank.
QE as practiced by central bankers is a way of making sure bankers have never had it so good, all at cost to the state and the rest of us.
And for wealth taxation.
I have belatedly noticed that Global CEO magazine has concluded its survey of top CSR directors and has reported:
Our CSR poll has ended and we have a winner.
Our winner is Paul Monaghan, who wrote Lobbying for Good (with Philip Monaghan). He is also the director of the management consultancy Up the Ethics, and an adviser to Co-op Energy and Fair Tax Mark. His ideas are having a hugely positive influence, which is why he was selected as number one. The whole Global CEO team would like to congratulate him on his efforts.
It’s great to have the country’s top CSR director as a key member of the Fair Tax Mark team. And to be honest, Paul is an inspiration to work with. Which may be why the number of companies in the FTM pipeline is growing steadily.
It’s Davos time: the moment in the neoliberal calendar when he high priests of exploitation gather to celebrate their ability to pillage on behalf of the few. Which also means it’s that moment when the rhetoric of a world leader or two turns, with a token message, to the issue of tax.
Two years ago it was David Cameron putting corporate tax abuse on the G8 agenda at the same time that he was slashing the UK corporate tax rate, disembowelling our controlled foreign company rules and passing patent box and treasury function legislation to either make the UK a tax haven or encourage the use of tax havens by companies based in this country.
This year it is Barack Obama who, after seven years in the White House and when he has no chance of delivering on the promise says he wants to tax wealth and banks more heavily. The Republicans are, of course, lined up to oppose him saying that taxing the wealthy would reduce the rate of economic growth contrary to all evidence when US growth is now entirely dependent on US state intervention. No doubt, however, they will get their way, for the time being.
But, as Oxfam point out in a new report today, almost 50% of all wealth is now owned by the top 1%, and much of that by the tope 0.1% of wealth holders in the world. We live in a time of obscene inequality which has delivered no proven benefit at all to the world at large.
What is more, we will soon have the data we need to tax wealth. The big problem in tackling wealth in the past has been locating it. Capital flight to tax havens was, even five years ago, so easy that any wealth tax was bound to be little more than an honesty box arrangement. That is beginning not to be the case. Automatic information exchange for income taxation purposes has the side effect of supplying significant wealth data to the world’s tax authorities. 91 countries are scheduled to take part in such information exchange within 3 years.
There is one notable exception: the USA. Whilst the US has been at the forefront of the demand for tax data with its FATCA (Foreign Accounts Tax Compliance Act) it steadfastly refuses to supply information to other country’s tax authorities on income earned in the USA – which may well make the US the favoured home for looted funds in the very near future. I am sure there are banks there that will be more than willing to give a home to such funds.
But, the US apart, the world is becoming more transparent. The ability to hide wealth is diminishing. The chance of imposing effective wealth taxes is growing. The design of such taxes is an issue I will be discussing in meetings this week and will, I hope, be a part of my work this year.
Davos will probably ignore the issue and throw up its hands in horror at the idea. But Piketty, automatic information exchange, and the obscenity of the current world wealth allocation all demand it. So too does economic growth demand it, and the demand for healthcare, education and a decent standard of living for all require it: we know that wealth concentration is an obstacle to all these things.
Obama may be flying kites on this issue, but that, I have to admit, is better than nothing. He’s showing which way the wind is blowing. And widespread wealth taxation will be a reality within a decade, I am sure.
Now who’s going to say so at this year’s election?
Money no obstacle for Europe: Green QE and fair tax funded infrastructure can replace austerity’s ‘road to ruin’
The Green New Deal Group launched a new report today on the need for Green Infrastructure Quantitative Easing and the collection of money owed by tax cheats as the way forward for Europe, not a form of QE that is already causing economic nightmares and damage in the impact it has already had on Switzerland. I am a member of the Green New Deal group. In a press release the Group said:
Next week will be a momentous one for Europe. On January 22nd the European Central Bank (ECB) is expected to start the e-printing presses rolling with a massive Quantitative Easing (QE) programme to attempt to tackle stagnation and deflation in the Eurozone. Then on January 25th Greece goes to the polls and if, as expected, the left wing Syriza party gets the majority of votes, a fundamental challenge to the disastrous Europe-wide austerity programme will follow.
The Green New Deal group’s paper ‘Europe’s Choice – How Green QE and Fairer Taxes Can Replace Austerity’ asserts that an ECB QE programme to buy government bonds will, like it’s £375 billion UK predecessor, do little to increase economic activity, and will merely boost asset prices rather than generate sustainable jobs throughout the continent. Instead the Green New Deal Group proposes that all EU countries introduce a programme of ‘Green Infrastructure QE’ to increase the continent’s renewable energy supplies, ensure all buildings are energy efficient and revitalise local and regional transport links. Paying a living wage would help to boost the tax take and overcome the present lack of long-term effective demand in the economy. The paper estimates that a continent wide programme would need funding of the order of 500 billion Euros (£400 billion) per year over the next decade.
The Role of Fairer Taxes
Tax expert and Green New Deal member Richard Murphy said “My research has estimated that tax evasion (illegal non-payment or under-payment of taxes) in the European Union is approximately €860 billion a year. Tax avoidance (seeking to minimise a tax bill without deliberate deception), might be of the order of €150 billion a year. Such non payment of taxes might cost the governments of the European Union €1 trillion a year.[i] Collection not cuts is what is required.” He added “In Greece and the UK, where anti austerity parties are on the rise and elections are imminent, these losses might amount to €19 billion for Greece[ii] and for the UK the tax gap may be as large as £120 billion a year.” [iii]
Green New Deal group member Caroline Lucas MP said: “Next week the UK and the rest of Europe stand at a cross road. They can go down the usual QE path that benefits the banks and the asset rich, or they can ensure a greener future funded by a massive ‘Green Infrastructure QE’ programme and the effective collection of at present unpaid taxes. In doing this it could also steer Europe away from continuing down the discredited ‘austerity road to ruin’.”
- Annonce d’arrêts et décisions conc. AT,AZ,BG,HR,EE,FI,FR,GE,DE,GR,HU,IT,LV,LT,MT,MD,NL,PL,PT,RO,RU,RS,SK,SI,SE,TR & UA 13-15.01.15
- Forthcoming judgments and decisions re: AT,AZ,BG,HR,EE,FI,FR,GE,DE,GR,HU,IT,LV,LT,MT,MD,NL,PL,PT,RO,RU,RS,SK,SI,SE,TR & UA 13-15.01.15
- Audience de Grande Chambre Lambert et autres c. France
- Grand Chamber hearing Lambert and Others v. France
- Press Conference of the President of the European Court of Human Rights 2015