On budget day this Wednesday (18 March), I and 16 other contributors are launching in the House of Commons our book What the Three Main Parties are not Telling You: A Radical Way out of Stagnation and Inequality as a counter-blast to Osborne’s demand for another 5 years of austerity. Mariana Mazzucato refutes the conventional idea that the role of the State is simply to redress market failures; rather it funds not only the rate of innovation but also generates its direction. Ha-Joon Chang notes the tide of public opinion is steadily moving against privatisation and in favour of renewed public control, and he cites many international examples to confirm this. Continue reading
Posted in Taxation
Corporate tax dodging is father of austerity
Industrial scale tax evasion and avoidance is not only symptomatic of the insatiable greed of the hyper-rich and the over-mighty corporations, it also serves another purpose which is much less recognised. The touchstone of the neoliberal ideology is globalisation – let the markets be all-powerful and governments get out of the way. That is served by light-touch (i.e. minimalist) regulation, blind trust in free markets, and the unfettered mobility of capital. But it further demands that the state should be kept deprived of adequate funding so that its capacity for intervention is short-circuited. That is exactly what widespread tax evasion/avoidance achieves. A state starved of tax revenues – even HMRC admits it loses £35bn a year on tax scams, though Richard Murphy of Tax Justice Network argues it’s nearer £120bn a year – cannot deliver the goals of social democracy which a majority of the electorate desire. Increasingly the government falls prey to the markets even to raise its own revenues. Continue reading
The great Spanish corporate tax dodge
Spain’s biggest companies have greatly increased their presence in tax havens, with the number of subsidiaries established in these tax-lite territories up 44% during 2013, the worst year in the country’s economic crisis.
The IBEX35 companies upped the number of branches in tax havens from 561 to 810 during that year, new research finds.
Financial flows to tax havens – from Delaware and Jersey in the US The Netherlands and Ireland, to Luxembourg, Switzerland and the Cayman Islands – account for 24% of total Spanish foreign investment, through a transfer of capital between subsidiaries ( activity that amounts to about a quarter of overseas investments by Spanish companies. ) Continue reading
Non-doms: this extra scam for the ultra-rich must be abolished
One of the scams highlighted by the HSBC Swiss bank scandal, and then quickly ignored, is the continuing absurd anachronism of the non-dom rules. Stuart Gulliver, the shamed CEO of HSBC, though living in London in order to run the second largest bank in Europe and routing his bonus through a Panamanian company to escape tax, is perfectly legally allowed to avoid tax on all his overseas income because he is technically domiciled in Hong Kong. Even more incongruously, since most non-doms inherit their status from their father, it is possible for people who have been born, educated and lived in Britain for 50 years or more to have non-dom status, even is they hold British passports. All that they have to do to keep all offshore income and capital gains out of the British tax net is to show that they retain strong links to their home country and to show some intention of returning there. Continue reading
Worse than the tax evasion is the stench of class society
There could hardly be a more poignant vignette of Britain today than the hidden truths revealed by the HSBC Swiss bank. Five years after this colossal tax evasion and avoidance scam was known to the UK authorities, there has been 1 prosecution. At the same time, in just one of those 5 years (2013), no less than 1,046,398 sanctions (deprivation of all income for weeks or months on end) were imposed on unemployed persons claiming job seekers’ allowance, often for trivial or even incorrect reasons. Also in that year nearly 200,000 persons were prosecuted because they didn’t have a TV licence. The culture of rewards and punishments in Britain today is based unambiguously on the ideology of class power dominated as never before by a small clique with overwhelming control of wealth and power. Continue reading