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Tax Dodge Digest

by on February 12, 2014

Transparency first: my money was also once hidden from the tax authorities. I inherited that mess, and when I started learning about the deeper connections, and how hard it was to invest anywhere without taking part in some scam, or even to get proper information from one’s advisors, well…here’s my short bio, written by my not-so-secret alter ego, Hasi Herbsling, which BTW was one year premature (but I’m gonna make it!) – click here. In a nutshell, my philosophy is that there’s really only one place I can invest my money, and retain full control: myself. I’m careful with charities, too, by the way, because – see second quote here – while many of them do a sterling job that the world would be worse off if no one were doing it, it can amount to a zero sum game, and we must never forget that it’s also important to take part in government! I became involved here because I felt my attitude to be in line with the spirit of the Banks need Boundaries! petition at change.org.
Also, in the days when I used to run my own business, I happily spent a little more money than I would otherwise have, on things that weren’t really essential to what I was doing, simply because I knew that you guys would be chipping in. That’s how the system works: pre-tax expenses! Were they really all just business expenses? Well, it was very confusing as a kid for me to go shopping for guitar gear, and having to ask the shop assistant if he could write me a receipt saying it’s ‘office equipment’. I didn’t like this at all, so when I set up on my own, I was more diligent. That’s not the whole story, but everything I’ll say for now without my lawyer present   😉

Sochi, Russia.
I am vehemently against any complaints about the crimes of other countries before we look at our own. Sochi presents an interesting opportunity. If Putin kills stray dogs, there’s immediately an online petition with five-digit supporter numbers. And you hear a little bit about corruption (see article in Huffington Post). But what about our own crimes, which include granting amazing rights to illegitimate private tyrannies? For a start, they get to be immortal ‘persons’. According to Noam Chomsky (in a talk which is currently off-line, “Prospects for Democracy“), the personification of ‘joint-stock companies’ was Adam Smith’s worst fear. This affects not only the olympics in Russia, but extends to sports events everywhere, and how the world is run.

The real sport: tax avoidance. Corporations don’t lift a finger to do anything remotely productive these days, without sending out an army of lawyers first. One must understand, firstly, that this is done at public expense. Corporations subtract all costs from turnover before they declare profits, and that includes legal, PR, snazzy buildings, you name it. This is why the fight for justice is such an uphill struggle. If you work for the public, or on its behalf, your salary will show it. And because corporate PR dominates public opinion, members of the public are still too uneducated to see the value of this work. Thus, these exceptional workers are withheld that valuable currency called resonance (See “The first currency – and the LAST?“)

Second, there’s the direct result of lost public revenue, due to what these lawyers achieve. Incidentally, it is the legal system which gave corporations their extraordinary power in the first place. It’s not in any constitution. And I feel sad it’s necessary to add that corporations are by their very nature totalitarian top-down structures, not fundamentally different from, say, an army or a dictatorship. You already knew this, didn’t you. But when did you last see it in print, if ever? Exceptions: democratic firms. In the case of the London Olympics 2012, see Ethical Consumer, and note that this doesn’t even cover the “regular” tax breaks given to multinationals supplying the games. [Thank you, TJN wrapper!] While all this is going on, legal aid to the poor is under attack, links one and two.

Similar mechanisms are at work for football (soccer), see Tax Justice Network (TJN). In Ancient Rome, one used panem et circensis (bread and games) to distract people from what’s really going on the world. Little has changed. As George Turner from TJN points out: “Let’s not forget that there’s only one Olympics, and only one World Cup: these are monopolies – and ultimately the super-normal economic profits that accrue, over and above the costs, are for private gain. Every reasonable economist knows what we ought to do with unearned rents from monopolies and their like: tax them, and at very high rates. Which is, of course, the very opposite of what’s happening.” (Subscribe to TJN Wrapper here.)

France. We started off the year writing about hapless Hollande. Now, an uplifting update. For now, much like Italy, he seems to be focusing on tech firms. Remember that Hollande’s predecessor Sarkozy failed to get tough on tax. He only talked the talk, announcing the end of tax havens dozens of times. Still plenty of walking to do!

Latest news.
OECD delivers a new single global standard on automatic exchange of financial information. Translation into plain English: let’s shut down tax havens! GFI is enthusiastic about this, TJN finds it useful, but sees “loopholes that can easily be, and must be, closed”, and a further NGO laments that the new plan neglects developing countries (click here for report in German, here for French). Personally, I am quite happy things are finally moving on this field which should really be a no-brainer. My first ever blog-type posting on what is now the facebook-community DasLiebeGeld, 18 months ago today, said basically just that. The sycophantic Swiss media were up-in-arms about tax data being sold illegally to Germany. I loved it.
(updated Feb 13th)

Further reading and sources:

TJN Links February 2014

Former olympian at This is money

Anti-Money Laundering Directive (AMLD) in EUobserver

Delayed vote for corporate transparency (Eurodad.org)

Time for action on financial transparency (EUobserver)

Bankers don’t like it (Reuters)

Improvement “in the long term”?

Reshaping corporate tax in Switzerland

How to make the tax returns of publicly traded corporations public

Think Africa Press: Angola’s biggest threat is offshore, not pirates

Across all of Africa (…) illicit financial flows (…) on the increase (…) powerful multinational corporations were responsible for about 65 percent of this “loss”
(note minglingmike: one of the first times I heard about this was as a musician, when a study came out showing that the “World Music” craze caused net LOSS of wealth in Africa.)
(Then came the rather pompous US-politician – I forget which film this was in – reassuring a room full of black-tie guests that every dollar of development aid in fact brought a 68 cent GAIN to US pockets.)

(And while we’re on that topic, I feel there’s an opportunity to sneak in the sad misperception of foreign trade. People in the US were asked what share of the budget they thought it was. Answer: one fifth. In fact, it’s less than one percent. That’s an underestimation by a factor of twenty! For us to get together and do good things as the state, which is us, it goes without saying that we should have a rough idea of where our money is going!)

German treasurer resigns. Prominent Feminist in the hotseat.

President Obama said in a nationally televised interview before the Super Bowl that the IRS’s mistreatment of the exemption applications of mostly conservative social welfare organizations was the result of “some boneheaded decisions.”

Rolling Stone: U.S. Regulatory Strategy is a Joke

FATCA here and here

Greek-Swiss connection
(Note by minglingmike: in 2009 or 10, while hanging out in downtown London, I met a charming Greek shopper with his family, laden with bags full of clothes, shoes, and other new acquisitions. He liked shopping in London, because “spending money like this in Greece is frowned upon.”)

Canadians for tax fairness: “Close unfair loopholes!”

Whistleblowing for money (I like it!)

India-Cyprus / India-Vodaphone

Luxembourg is not a tax haven (familiar theme)

Ban anonymous shell companies!

Delaware!!

Hard on (Micro)soft

Obama running with the hare and hunting with the hounds

http://www.icij.org/blog/2014/01/wealthy-nations-preserve-bribery-loophole

Europe must ‘walk the walk’ on corruption

As President Barack Obama renewed his criticism of tax laws that “reward companies that keep profits abroad,” the government he leads is taking a more subtle approach — one that’s helping some of those companies.
(minglingmike: note the phrasing “a more subtle approach”. That’s how these people communicate. To Joe Bloggs, who has to fill the gap in tax revenue left by corporations, this is not a joking matter. Yet the public is still left mostly in the dark about these matters. In fact, we are actively mislead by the whole “tax is bad” issue. If you could summarise corporate propaganda humorously in a nutshell, it would be this:
TAX IS GREAT – AS LONG AS IT’S YOU PAYING IT!)

CTJ – citizens for tax justice

Filling Letterman’s gap-in-knowledge

End on a positive note: “Campaigning can help make a difference!”

===

Orwell: “the British should not feel too self-righteous in condemning the vulgar means of control of expression in the totalitarian Soviet Union. (…) unpopular ideas can be silenced and inconvenient facts kept dark without any need for an official ban. And anyone who challenges the prevailing orthodoxy finds himself silenced with surprising effectiveness.” (From the CENSORED preface to Animal Farm.)

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