“We’re all in this together .” Surely one of the brass plated lies which will be seen as encapsulating the failure of our times. Much the way that “For God, King and Country” reminds us of an old order which thundered and then bled to death on the fields of Flanders nearly a century ago
The cynicism of the phrase is there for all to see. If they want to. The sordid tale of British billionaire Mr Philip Green is the current ugly example.
Mr Green owns Top Shop among many other businesses. In order to avoid, or as we say in better heeled circles, to ‘minimize’ his taxes, he put his business in his wife’s name. Though it is he not she who does the work. But she, unlike he, resides in Monaco, where tax is too ‘common’ to contemplate. It is an arrangement that allows Mr Green not only to enjoy the profits from his huge business empire – living the ‘1%’ life-style of £27 million private jets, and spending £5 million on his 50th birthday party, but do so warm in the knowledge that he can luxuriate without paying more than a pittance in British taxes.
This arrangement so impressed our glorious leader, Mr Cameron, that in a moment of pure irony- free brilliance he asked Mr Green to advise him on how to ‘make the public sector more efficient’.
Tax avoiders like Mr Green cost the people of this country around about £69 billion every year in ‘avoided’ taxes. Globally people like Mr Green avoid paying about $3.1 trillion in taxes. These figures come from a splendid and careful piece of research by the formidable Richard Murphy of Tax Research UK. That money, which would be paid if the Mr Greens of this world simply contributed according to the tax levels judged fair and proper by the people’s of the nations, resides in the global banking system. That part of the banking system which sits carefully outside the reach of nations and their citizens, but is being bailed out by them.
Morally repugnant you might feel. Indeed, even the present Chancellor of the Exchequer, Mr Osborne let slip some time ago that what he called ‘aggressive tax avoidance’ was indeed ‘morally repugnant’. His words. So you might think that when asked directly on the radio this morning if Mr Green’s actions were morally repugnant, Mr Cameron, the Prime Minister, would agree. He didn’t. He could not or would not distance himself from Mr Green’s actions and attitudes.
But blood boilingly rotten as this is, it is only one part of why we are not all in this together.
The other parts are less high profile but have to do with the same people who are guarding all that avoided and evaded tax – the banks. It’s the part I was going to write about until I had the misfortune of hearing the oleagenous Mr Cameron squirm around and avoid calling Mr Green what he is.
I have been paying attention to this subject of avoidance since I first heard about UKUncut. I suppose I could say I am amazed by how little the matter is reported by MSM but given the BBC’s complete blackout on real and relevant news and how ignorant people are over what their taxes pay for this maybe merits a shrug.
I regret that at 68 I am not quite fit enough to protest vgorously but I certainly share your sentiments. Very glad that Richard Murphy, Eoin Clarke and you are so clear on these events.
The world will continue to be a vicious place for the great majority of us as long as the tax dodging havens are allowed to exist. That is all there is to say. They are absolutely indefensible.
Michael Fish, Canada
It’s hardly surprising Cameron couldn’t bring himself to do other than face both ways since we’ve now learned that his father also used the same jolly wheeze to provide young David’s inheritance.It’s called’entrepeneurial flair’ I think.
We should all take a one month package vocation to these tax havens, swamp them with our sweaty, uncouth ordinariness then leave them holding the tab.
Either that or we should demand our governments removes ‘avoidance’ from the lexicon of taxes.
Of course for this to happen not only will we need politicians with a backbone connected to their brain rather than the area around their hip pocket, we will also need a justice system which doesn’t chose to discriminate between the obsequious eloquence of the rich while deriding the stuttering pleas of the poor.
FAT CHANCE: A play of vanity, the author hiding behind the pseudonym Democracy.
Jersey and the Isle of Man are two of them. A month might be a long time on either!
Joe R – damn never considered these – so our action has to be limited to the tropical regimes.
Richard Murphy………..enough said he is boarding on the pathetic.
I like most people try to avoid tax as much as I can.
Tell me is becauseyouthink.tv a shell company? or is it Eastern State Limited
Evasion is criminal, avoidance is not. good luck with minimisng your liabilities, it is always an headache is it not?
The problem with the tax code is very simple it is way too complicated. have one allowance and one rate of tax payable by all, end of problem. And as a matter of mathematics the rich will pay more because they earn more.
When do you think these multimillionaires and billionaires will have enough, Sean?
What do you think pays for the infrastructure of a civilised nation?
Didn’t you realise it was the tax haven system which was at the heart of the banker’s theft?
The less these people who have more than enough pay, the more the burden is displaced onto you.
Ah hello Sean. Touched a raw nerve? Actually, since you ask, neither of the companies you mention are shell companies and neither minimizes tax.
As you say tax minimizing is not illegal. Neither Mr Green nor his accountants have done anything illegal. The question is if they have done anything morally repugnant. I think they have.
If you think they haven’t then that is one of the differences between us.
I put this up before Golem,
Its a Cayman Islands based fund that is performing very well…great returns…it funds lawyers and legal actions in the UK!
http://www.theaxiomfund.com/
Wonder who pays the bill?
For want of any better place to put the link, medialens.org’s excellent piece on the trashing of the (UK) NHS & moving it to a private sector ‘rent’ extraction system a la USA. As in the ‘I’ for Insurance of the ‘FIRE’ (Finance, Insurance & Real Estate) leeches.
http://www.medialens.org/index.php?option=com_content&view=article&id=676:people-will-die-the-end-of-the-nhs-part-1-the-corporate-assault-&catid=25:alerts-2012&Itemid=69
‘Squeezing ordinary people’s finances always leads to disaster’
“The UK gross domestic product (GDP) has increased from the 1976 figure of £621bn to around £1.5tn, but the share going to employees in the form of wages and salaries has declined. In 1976, the amount of wages and salaries paid to UK employees, expressed as a percentage of GDP, stood at 65.1%. By the end of 2011, it was around 54% (see table D of the Quarterly National Accounts). This rate of decline is unmatched in any other developed economy. With many people now facing wage freezes and loss of pension rights, the employees’ share of national wealth is set to fall below 50% of GDP.
… in 1977, for every £100 of GDP, employees in the bottom half of the earnings distribution received £16. But by 2010 it had fallen to £12, and after taking out bonuses their share declined to just £10. In contrast, the top 10% of earners increased their share from £12 per £100 of GDP to £14, and after taking account of bonuses, it rose to £16.
In principle, the state can boost the spending power of low and middle-income households through redistribution, but that possibility is constrained by the erosion of tax revenues. In 1981-82, tax revenues expressed as a percentage of GDP stood at 45.5%, but by 2011-12 they had declined to 37.8%.”
http://goo.gl/YxxTG
Good old Prem Sikka. I met his colleague John Christensen. Great guy, look up his work.
So his companies borrowed and paid out £1.2billion in 2005, shows remarkable prescience, must have been reading Steve Keen.
http://www.guardian.co.uk/business/2005/oct/21/executivesalaries.executivepay
Great article!
Has anyone else noticed how much worse the BBC is getting. The radio 4 headlines this evening included…’stocks around Europe fell today on the day after socialist (Mr.Whatever) won the first round of the French Presidential election.’ ….The ministry of truth would be proud.
Does anyone actually watch or listen to the BBC news? I gave up a long time ago, its nothing short of mindless patronising drivel
If there was anything wrong with the BBC’s coverage of news from the financial sector and of economics in general, I’m sure the BBC Board of Directors would have it fixed pronto.
After all, they’ve got the Chairman of Barclays on the BBC Board to make sure they get their stories right.
Couldn’t possibly be a conflict of interest there, so I assume we’ll soon be seeing a leading trade unionist on the BBC board too.
Or maybe not.
edit: add bbc link
http://www.bbc.co.uk/aboutthebbc/insidethebbc/managementstructure/biographies/agius_marcus/
Wowsers…..i never knew! Thanks for the link.
Barclays AGM was yesterday.
Apparently a question was asked of Chairman Agius about the appropriateness of him being on the board at the BBC. Many thanks to whoever did that (it wasn’t me).
I don’t have details of the question or the answer but if anyone reading here does have the details…
On the grand scale of things it’s not a big issue of itself, but it is symptomatic of a bigger issue.
The results of the AGM votes are now available. 30+% of those voting voted to reject the Remuneration Committee’s report, but when translated into shares voted, the block vote of the institutional shareholders ensured that everything went through without a problem.
http://group.barclays.com/cs/Satellite?blobcol=urldata&blobheader=application%2Fpdf&blobheadername1=Content-Disposition&blobheadername2=MDT-Type&blobheadervalue1=inline%3B+filename%3DPoll-results.pdf&blobheadervalue2=abinary%3B+charset%3DUTF-8&blobkey=id&blobtable=MungoBlobs&blobwhere=1231960125127&ssbinary=true
It was the Phillip Green story which gave me reason to join Uncut on their protests. Whilst i didnt do the staycation in London, i went down on the first day and have been involved in many protests up north.
Cameron on Today programme sounded a bumbling fool. Great! This continued contempt for us will waken the masses from their slumber.
Some good news ive just read….Iceland PM found guilty of banking crash failure. Its a start… http://www.guardian.co.uk/world/2012/apr/23/iceland-geir-haarde-found-guilty
I would just like to say that i do not watch the BBC anymore. For a service funded by the people it is a crock of sh!te. You’d expect better from a service that is not bent over getting poled without lubricant by the banks.
They changed the headline as it was erroneous. it now reads:
Iceland ex-PM Geir Haarde cleared of bank negligence ~ but he was found guilty of failing to hold emergency cabinet meetings in run-up to the financial crisis.
Mr Phillip Green has more chins than a chinese phone book.
He must have some good chefs.
This story reminds me of Greece, where the average person is footing the bill, whereas the (Greek) rich (and maybe not that famous) are drinking champagne on their yachts…..
Is it morally repugnant to want to keep your own money rather than let it be wasted by our “elected representatives” who ensure that they’re all right thanks before they look after the people?
It is irrelevant how rich the rich are-the important point is how poor the poor are.
The tax system in the UK is flawed beyond redemption, with the poorest paid actually paying somewhere in the region of 60%.
There should be no income tax payable below £15K and thereafter a flat tax payable on income generated in this country, no matter where the recipient lives.
Incidentally, whether or not one agrees with the personal tax arrangements of Mr. Green, his privately owned business employs tens of thousands of people in the UK, and obviously sells products which people wish to buy. The contrast with “the City” of which he has been a critic throughout his career, (hence his company being private) could scarcely be greater. No-one has to support Green’s business-we all compulsorily support the City. I wish the UK had more like him.
The problem is, you cannot run a civilised society without a stable tax base. Arguing that the low paid should be relieved from a disproportionate burden (progressive) AND for a flat tax (regressive) is asking to have your cake and eat it.
The Philip Greens of this world benefit from operating in an economy with a well developed and funded infrastructure, legal system, security, etc., and a healthy, well-educated – and well paid workforce – with disposable income. And while it makes sense for individuals to reduce their tax burden – it is a fallacy of composition to assume this will lead to a general benefit – eroding the tax base and offshoring profits reduces investment in infrastructure, health, education and training. Pushing a heavier tax burden onto an already indebted workforce slashes demand – killing the goose that lays the golden eggs.
The last laissez-faire experiment ended in tears – with accelerating inequality, slum tenements, and an impoverished, uneducated workforce amid which sat pockets of affluence – the kind of conditions we are busily recreating. You can have a low-tax, low social mobility, high inequality economy where millions exist in poverty – or a higher taxed, less unequal society which ensures a basic level of education, health and income for all – but you can’t have a low tax economy that operates in the interests of more than a self-serving elite.
Neoliberals like to pretend that wealth creation is solely down to the talents and efforts of individuals, but the truth is, we really are ‘all in this together’ – none of us know what life will hold in store. We have no choice over whether we will be born into poverty or riches, whether we will suffer ill health or disability. It’s very easy for the ‘winners’ in such a lottery to forget their good fortune and ascribe their success to their own efforts – attributional biases kick-in. The potential Philip Greens who contract cancer in childhood, suffer abusive relationships, become disabled, and so on, are out of the frame of reference.
Philip Green avoided tax on £1bn; it would take someone on median income 40,000 years to earn £1bn – it’s just a question of balance.
This article illustrates the way that balance has been tipped over the last four decades – it’s no coincidence that it has culminated in the collapse of the world economy.
http://goo.gl/YxxTG
The cheerleaders of neoliberalism should’ve been more careful what they wished for.
Why would there not be a stable tax base?
Low taxes on the low paid will surely increase their spending power, and the take on indirect taxes.
The state is an inefficient allocator of resources for many things-and the larger the state the greater the bureaucracy-and the greater the waste. The best person to look after the citizen is the citizen himself surely-but he must be allowed to keep most of the fruits of his labor. It is a ridiculous situation where saving is discouraged by taxation-only to have to fall back on the state later.
The rich can be as rich as they like-as I said above, it is totally irrelevant. They can spend as much as they like on trivia-again, irrelevant. It is probably worthy of study as to the point at whichwealth brings no material or mental benefit to its owner-and the wealth is, in any event then used for the common good (Isn’t Bezos fundin fusion power research-surely a good thing).
Putting the too much of the citizens money through the government machine only benefits those who rule us.
I’m surprised that there is still support for the idea that the rich can be as rich as they like and it doesn’t matter. That wealth and those incomes don’t exist in isolation. In fact rent seeking activity is probably the biggest burden on people globally.
As for whether the state is efficient at allocating resource or not, well it’s rather hard to get the required data. Certainly what is available indicates that we are generally rather worse off following the big privatisations. The only one held up as an example is BT and, for that example to work, there are some pretty big assumptions.
What is relevant, and at least gets MSM lip service these days, is the concept of well being. Most importantly this doesn’t rely on out and out performance but rather how evenly the proceeds are divided. The most efficient mechanism for this is government, whether it’s operated efficiently or not is another matter. If your libertarian ideal worked so well then there would never have been a need to conceive a welfare state. Changes of that magnitude don’t happen if things are even close to ticking along.
We have the power but are just to dim to realise it. A one month sabbatical from shopping in any Arcadia stores would do the trick!