Sunday, 28 August 2011
ALL IN IT TOGETHER?
News that George Osborne has done a deal with the Swiss in relation to the secret bank accounts held by UK citizens may not wholly be good news. There has been much speculation as to exactly how much the new levy will bring in and the figure of £5 billion pounds has been bounced about by the Sunday papers.
I am sure that an extra £5 billion would be nice, I mean we have to pay for those pesky bank bonuses or those aircraft carriers somehow. What has, however, been largely overlooked is that what Osborne has done is effectively legitimise the holding of bank accounts that are secret from the Inland Revenue.
We still need to (globally) deal with the problem of off-shore companies and individuals who are engaged in tax avoidance, tax evasion or money laundering. The scale of the problem is quite staggering, take the Cayman Islands; which are home to some 12,000 corporations and have a population of 50,000, yet are home to 70% of the planets hedge funds.
The British Virgin Islands (population 22,000) is home to 823,502 registered companies. General Electric paid no tax in 2010, yet made a $14.2 billion dollar profit. Barclay's has 181 subsidiaries registered in the Cayman Islands and paid little UK tax on its world wide profits. The Dirty Digger’s News Corp has 152 subsidiaries in tax havens across the planet (according to the US Government) and paid no UK corporation tax between 1998 and 1999.
If developed countries exchequers lose out then it’s much worse for developing countries. Tax dodging costs developing countries $ 160 billion dollars per year (Christian Aid). Some $ 1.2 trillion dollars was illicitly removed from poor countries in 2008 (US Integrity Research Centre).
If the governments of the world got together, as President Obama suggested, and tackled the tax havens, the tax avoidance and the questionable dealings of the derivative traders, hedge funds and the off balance sheet trading then we may go so way towards dealing with the consequences of the worldwide financial crash. Perhaps if that nice (rich) Mr Cameron and the other 18 millionaires in the cabinet were to work with other governments worldwide to close the tax loopholes then perhaps we truly would all be in it together? Perhaps not!
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Strange how the vast majority of "Rich Tax Havens" just happen to be British Protectorates? The current UK fiscal deficit is running at circa £100 Billion p.a and the estimated tax evasion/aversion figure is about £120 Billion p.a. Do I detect a possible solution to the deficit problem?
ReplyDeleteWhile we are at it the UK national debt is running at circa £900 Billion and a one off 20% tax on the richest 10% of the UK population would produce about £800 Billion. In a recent NOP poll 73% of those asked thought this was a good idea.
Sadly the "Millionaires Club" members we currently have running the UK government are unlikely to want to upset the gravy train for their rich friends. More reasons why we need Independence sooner rather than later!