Posts tagged 'tax'
On Christmas Eve 2011, I was laid off as a seasonal sales assistant at HMV. I’d been employed just a few weeks before for the Christmas rush at the chain’s flagship Oxford Circus store, and expected to work until January or beyond. But in December 2011 the company reported losses of £40 million, and ‘extra capacity’ was now considered superfluous. As a ‘special’ gesture, the manager told me, I could work until 31 December. Other casuals – many were migrant workers hoping for a permanent post – got no notice at all: a young Frenchwoman was told she could take an ‘extended holiday’ from the following day.
Fighting on the Champs Elysées last weekend between French security forces and the so-called 'gilets jaunes' led to more than 100 arrests. According to the police, roughly eight thousand demonstrators took part. Barricades were built – and set alight – by what looked from a distance to be groups of rampaging lollipop people in dayglo yellow tops. But the gilets jaunes are not championing pedestrian safety: their revolt has been prompted by a sharp rise in the price of diesel and unleaded petrol at the pump, which they blame on President Macron's fossil fuel tax. This is a drivers' movement, at least at first sight, and despite the turmoil on the Champs Elysées, it is deeply provincial. Macron responded on Tuesday not with a U-turn, but with a concession enabling parliament to freeze the carbon tax – which is set to keep rising year on year – when the oil price goes up. A freeze is a very different proposition from a reduction and the gilets jaunes don't like it. They were out in force again on Wednesday and another big demonstration looks likely in Paris tomorrow.
Glen Newey · The Panama Papers
Plutarch describes Anacharsis' mockery of the Athenian lawgiver Solon, whose laws, 'like cobwebs, snag the frail and puny; but the rich and mighty punch through them.' As in sixth-century BC Athens, so now in the global sport of tax avoidance. The 'Panama Papers' disclosed this week by the Süddeutsche Zeitung, Guardian and others contain some 2.6 terabytes of data leaked by a whistleblower in the Panamanian law firm Mossack Fonseca. In their files, the usual telly faces, Tory party donors, oligarchs, sportspeople and surplus royals wash up; they're all in it together. So was David Cameron's late father, via the still-trading investment fund Blairmore Holdings Inc., which avoided UK tax entirely for a thirty year stretch.
Mediapart, the French online journal known for its investigative scoops and the quality of its analytical pieces, is in trouble. The problem is to do with VAT – the tax collector has decided the journal owes €4.1 million – but it goes much deeper. At the root is an argument of principle, conducted in the open by the editors for several years, about fair competition between print and online newspapers. Mediapart insists it should be entitled to the preferential VAT rate reserved for print media: a derisory 2.1 per cent as against the standard rate, which rose last year from 19.6 to 20 per cent.
Austeritarian politics minds less about balancing the books than cutting the state. It aims to bear down on public spending but also distrusts tax, particularly on the well-off. Austeritarians bang on about the debt while failing to plug revenue holes. Labour muddied the issue last week by merging it with the question of toxic party funding. At prime minister’s questions Ed Miliband attacked Tory donors including Lord Fink, who’d benefited from HSBC’s newly exposed Swiss tax scamming. Miliband apparently saw this as a chance to brand the Tories as high-rollers contemptuous of the fisc. The tactic was doubly doomed.
'Housing is a right, tax-dodging is wrong,' read a banner outside the Oxford Street branch of Vodafone on Saturday. UK Uncut had organised a day of action in cities around the UK. Vodafone recently reported a post-tax profit of £59.4 billion for the year to March. For the third year in a row the company has paid no corporation tax; in 2010 HMRC wrote off a £6 billion tax bill. Meanwhile, the government says it can't afford not to make cuts to social housing. The protest took the form of a housewarming party. There were balloons, music and fizzy drinks outside the shop; inside, a few people behind a half-lowered shutter. Three women, a toddler and a man in a wheelchair had managed to get in there early. The protesters at the door had a minor scrap with the staff, then chatted to the police. An activist in a Gary Barlow mask explained the amount allegedly owed by Vodafone. One of the officers asked him: 'Yeah, but have you done your own investigation?'
The phrase ‘property owning democracy’, on which the popular conservatism of the 20th century rested, and with it a vision of the good society, was coined by the Scottish Unionist Noel Skelton in a quartet of articles for the Spectator entitled ‘Constructive Conservatism’, written in the spring of 1923. The previous November’s general election had seen more candidates from the Labour party elected to House of Commons than Asquith’s Liberals and Lloyd George’s National Liberals combined. For Skelton, the Fourth Reform Act of 1918, which massively extended the vote, and that electoral turnover – which was to prove terminal for the Liberals – meant that politics, and the Tories, could not proceed as before. It was only a matter of time before the forces of democratic socialism might challenge for a majority in the House of Commons. To stave off the threat, Skelton hoped that the Tories might come to accommodate progressive attitudes on such issues as housing and pensions, and in so doing steal much of Labour’s thunder. 'Reform so that you may preserve,' as Macaulay had put it. No surprise then that Anthony Eden repeated Skelton’s words at the 1946 Conservative Party conference, in the shadow of the unexpected defeat of Churchill’s government the previous year. What had been an intellectual exercise two decades previously was now imperative in ensuring the return to power of the Conservative party. Addressing a meeting of Saga customers last week – whose average age will have been about the same as the average member of the Conservative party (68) - David Cameron spoke of how he would like to increase the inheritance tax threshold to £1 million.
Lloyds Bank has been fined a record £28 million for 'serious failings' in its 'seriously flawed' sales practices. Lloyds says it 'recognises that its oversight of these particular schemes during the period in question was inadequate and apologises to its customers for the impact that they may have had.' Last month, the bank wrote apologetically to its offshore customers to let them know that it would no longer be able to aid and abet them in their criminal activities. Of course it didn't really say that.
Boredom’s use as a political weapon is underappreciated. It allows liberties to be filched by stealth, on the wild frontier beyond people’s attention span. Such is the case with Real Time Information (RTI), whose full ‘roll out’ starts with the new fiscal year on 6 April (it’s already being piloted). It's been described as the biggest change to Pay As You Earn since 1944, when PAYE came in, but few people beyond payroll managers, employers and accountants have heard of it. Under RTI the tedium that shrouds any accountancy-related matter is compounded by the blandness of a clerical rejig. Instead of reporting payroll details to HMRC at the end of the tax year, as now, employers will be ‘invited’ (at two weeks’ notice) to join RTI, where the data are supplied to HMRC in ‘real time’.
Just in, some promotional material for Poetry for Now: A Collection of Verse from the Heart of Modern Britain:
This book is rather unorthodox in that it contains poems exclusively written by people who work within Britain’s corporate sector. This includes surgeons, dentists, CEOs, solicitors and bankers. Some of these professions are unpopular with the media and are not often associated with the creative arts. Even so, during the past few years there has been a small but growing community of professional workers who are expressing themselves via the medium of ‘corporate poetry’.
‘Sovereign is he who decides on the exception,’ Carl Schmitt famously wrote in Political Theology. Article 48 of the Weimar Constitution, which so excited Schmitt, invested the president with emergency powers. After they came to power in 1933, the Nazis duly got president Hindenburg to use article 48 to annul constitutional rights in the wake of the Reichstag fire. Executive fiat survives intact in today’s democracies. In the UK, Orders in Council persist as executive powers with the force of primary legislation, exercised under the royal prerogative – they were used in 2004, for example, to overturn a court ruling that the forcible exile of Chagos islanders was unlawful.
David Bromwich · Obama's Tax Cuts
President Obama’s theoretical willingness to continue the Bush tax cuts for the rich was first hinted at in a New York Times column by Peter Orszag on 6 September. Orszag had stepped down a few weeks earlier from his position as Obama’s director of the Office of Management and Budget, and he was known to be close to Obama; such a column, it was plain, would not have been written without the president’s encouragement. The novelty of the Orszag proposal was that Congress should extend the cuts for just two years.
The next day, a Times headline suggested that Obama would never stand for any kind of extension: ‘Obama is against a compromise on Bush tax cuts.’ But there was a complication. Obama wanted to let the lower rates expire for the top 2 per cent of earners, but stay in force for the remaining 98 per cent, whom he called ‘the middle class’. He was presenting himself as a statesman, uniquely concerned with the middle class, yet mindful of the budget deficit. The Republicans, Obama reasoned, by opposing him would show themselves both careless of the deficit and heartless toward the middle class.
Khadija Sharife · Hollywood Untaxed
Hollywood loves a movie about a maverick individual taking on the might of a giant corporation – think of films like Erin Brockovich, Public Enemy or The Insider – but one breed of behemoth is unsurprisingly immune from scrutiny. Hollywood's ‘big six’ studios – Paramount (a subsidiary of Viacom), Twentieth Century Fox (News Corporation), Columbia (Sony), Warner Brothers (Time Warner), Universal (General Electric) and Disney – may have their principal place of business in California, but they’re all incorporated in Delaware.
Like Panama and Liberia, the Republic of the Marshall Islands in Micronesia is not only a tax haven but also an open ship registry. Open registries enable foreign owners and operators to circumvent many of the regulations required by the national registries of such traditional flag states as the US, UK, Japan or Germany. In 2009, only 53 oil tankers were registered in the US, compared to 557 in Panama, 460 in Liberia and 221 in the Marshall Islands, where a 50,000-tonne ship can ‘flag in’ for a fee of $15,000. Perks include same-day formation, high levels of client confidentiality, voluntary disclosure and zero taxation. Citizenship can be obtained by forming a legal entity and foreign clients never have to set foot on the islands. In all, more than 2000 vessels are registered in the Marshall Islands. Until it sank in the Gulf of Mexico on 22 April, one of them was the Deepwater Horizon oil rig.">http://www.register-iri.com/index.cfm?action=page&page=22" target="_blank">Perks include same-day formation, high levels of client confidentiality, voluntary disclosure and zero taxation. Citizenship can be obtained by forming a legal entity and foreign clients never have to set foot on the islands. In all, more than 2000 vessels are registered in the Marshall Islands. Until it sank in the Gulf of Mexico on 22 April, one of them was the Deepwater Horizon oil rig.
The Tax Justice Network has cautiously welcomed the commitments made by the G20 to take a tougher line on tax havens: 'Great strides have been taken on tax havens in the last couple of days,' although the OECD list is 'deeply flawed'. John Christensen, the director of the international secretariat of the TJN, wrote a piece about tax havens in the LRB in 2005.