History is made as Vox Political agrees with David Cameron

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avoid, Bernard Madoff, corporate, David Cameron, dodge, evade, evasion, Glaxo, haven, Jean-Claude Juncker, Luxembourg, Mike Sivier, mikesivier, Pearson, ponzi scheme, Private Eye, tax, Tesco, Vodafone, Vox Political

 

Jean-Claude Juncker, tax avoidance mastermind and now President of the European Commission.

Believe it or not, David Cameron was right to oppose the appointment of Jean-Claude Juncker as President of the European Commission.

If Private Eye is to be believed, Juncker has a record of wreaking fiscal havoc across the continent, thanks to his behaviour embracing corporate tax dodgers as finance minister and prime minister of Luxembourg.

Anti-EU readers will be interested to note that he was chair of the EU’s council of economic and financial affairs, in which role he played a key part in shaping the economic and monetary aspects of the 1992 Maastricht Treaty.

Eye 1368 (June 13-26) states that Luxembourg has turned itself into a tax haven, “but, crucially, one at the heart of Europe entitled to tax-free flows of money in and out of its borders in a way traditional sunny island havens… could only dream of.

“The Grand Duchy became the member of the economic club that pilfered from the club’s funds.”

Let’s look at examples: “An especially fruitful line has been multi-billion-pound corporate tax avoidance at its neighbours’ expense. In the most infamous case, Vodafone still routes more than £50bn worth of loans through Luxembourg for no purpose other than taking advantage of tax laws and administrative rulings carefully tailored by Juncker’s governments to facilitate large-scale tax avoidance… The company is sitting on a £17.4 billion “tax asset”, ie reduction in future tax bills around the world, courtesy of [Mr] Juncker.

“Hundreds of other multinationals, including the UK’s Glaxo, Tesco and Financial Times publisher Pearson, use Luxembourg in similar ways at enormous cost to Europe’s economies.”

And the buck doesn’t stop rolling with tax, either: “Juncker pursued an aggressive regime of financial deregulation, especially in the area of investment fund administration. So it was no surprise that when Bernard Madoff’s ponzi scheme collapsed in 2008, a large chunk of the money had come through loosely-regulated Luxembourg funds set up by Swiss banks.”

The man responsible for the above is now in charge of the European Union. David Cameron was right to oppose his appointment.

Be afraid.

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The benefit debate is a diversion – that’s why it will go on and on

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allowance, banker, benefits street, blame, boss, build, Channel 4, Conservative, crisis, David Cameron, debate, dodge, economic, economy, Eton, flood, house, housing benefit, industrial, industry, job, jobless, jobseeker, low, Owen Jones, pay, private landlord, relief, rent, rip-off, strategy, subsidise, system, tax, tax haven, Tories, Tory, workless

How many of you tuned into the last episode of Benefits Street on Channel 4, and stayed on for the debate that followed?

Quite a few, I reckon.

They were worth watching, but the feeling that was left with this viewer (and I’ve been reviewing television for 20 years or more) is that we are talking ourselves around in circles – led by politicians with a vested interest in perpetuating the discussion.

They don’t want a solution. They want us to keep going over the same ground – which they have laid out for us with very specific limits – and they want to concentrate our anger about this issue so that we blame, not the people responsible – the tax dodgers who put money into tax havens that could be invested in British industry, the private landlords and low-paying bosses who are subsidised by the benefit system and the bankers who caused the economic crisis a few years ago – but the people who have been forced onto benefits through no fault of their own and are being persecuted for it by a punitive system that penalises them for failing to find jobs that really do not exist.

Look at the way David Cameron leapt forward with fistfuls of cash to pay for flood relief when Tory heartlands were affected, saying that money was no object and Britain is a rich country. We’re rich enough to look after the playing fields of Eton, but not our poorest citizens, according to his mentality. Property is worth more to him than people.

Why? Because the people who send their children to Eton are the people Cameron hopes will elect him (he can’t be re-elected; he didn’t win the 2010 election) in 2015. The unemployed are less likely to vote for him – in fact they are less likely to vote at all. It seems there is something about being rejected by society that instils a sense of listlessness and despair in the human psyche. People ask themselves: Why bother?

There are solutions, but it is cause for concern that we are not hearing about them from our MPs and politicians. Journalist Owen Jones came out with the clearest plan during the debate on Channel 4 last night, and it is well worth quoting in full.

He said: “Firstly let’s make it clear – work does not pay in this country. We hear that as a mantra, when most people in poverty get up in the morning and earn that poverty.

“We’re talking about people milking the system. Let’s talk about the low-paying bosses who are being subsidised with in-work benefits because, in the seventh-richest country on Earth, they won’t pay.

“If we’re talking about getting people into jobs I actually think we need to talk about solutions here. One in six workers in the last two years have claimed Jobseekers’ Allowance at some point; that’s a lack of security.

“What we need firstly is a massive house-building programme that would reduce the amount spent on Housing Benefit which, by the way, is not going into the pockets of these tenants – it’s lining the pockets of private landlords charging rip-off rents. If we build housing, it would create jobs and we would stimulate the economy as well.

“It goes the same with the need for an industrial strategy because what successive governments have done, and it started in the eighties, is let the secure jobs go to rot, if you like. Now, other countries like Germany, what they’ve done is had an industrial strategy. Instead of saying, ‘Hands off, let the market decide,’ they’ve said, ‘Actually we want to create jobs in renewable energy.’ Now we’ve just seen the floods; we’re going to have a lot more extreme weather, so let’s have an industrial strategy to go and create renewable energy jobs, giving people secure, dignified jobs, taking on the environmental crisis.

“These are solutions… We’ve got to change the debate we have at the moment where the real villains of the piece, like the tax dodgers who get away with not paying £25 billion a year in tax, like the private landlords and the low-paying bosses milking our welfare state, like the bankers who caused the economic disaster – they get away with it, but all we ever hear about is kicking people at the bottom.”

Absolutely right. And that’s all we’ll hear about it for the foreseeable future, as well. We won’t hear about returning to a full-employment society (which is perfectly possible), because that means the greedy rich will have less money for themselves in the short term.

In the long term, ensuring that there are properly-paid jobs for the most people, so they do not have to claim benefits, means that there is more money moving around the economy – and money makes money. The parasites – who are making a fortune unsustainably by working people hard and paying them poverty rations – would be just as rich in the long run, but they cannot bear to consider the possibility.

One has to consider whether they want to force people into poverty, just to make their own wealth seem more remarkable – the poverty trap as ego-trip, if you like.

But we won’t hear about that because it is politically inflammatory. Far better to set the lower classes against each other, laying blame on each other for problems that are caused by different people entirely – and laugh all the way to the offshore bank.

If I had to describe Britain to a foreigner, I would ask them to imagine a person being robbed outside a public lavatory, by the mayor of his town, while council workers started demolishing the building; the rich are destroying our public services and mugging us at the same time.

Very soon, the same people who are mugging you will be asking for your vote…

… while blaming you for problems they have done nothing to solve.

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How much of the national debt has been faked by tax dodgers?

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accountancy, accountant, annual leave, avoid, bail out, benefit, benefits, Big 4, Channel 4, Coalition, company, Conservative, corporate, corporation, debt, Democrat, Department for Work and Pensions, Dispatches, dodge, DWP, economy, fake, financial crisis, firm, flexible, government, Interest, Labour, Lib Dem, Liberal, loophole, market, Mike Sivier, mikesivier, minimum wage, national, national insurance, offshore, overtime, packet, part-time, pay, pension, people, politics, public service, Richard Brooks, self-employed, social security, tax, tax haven, temporary, The Great Tax Robbery, Tories, Tory, Treasury, Vox Political, welfare, work

Diddled into debt: A corporate tax avoidance scam is conning workers out of decent pay and the government out of tax and NI money, after causing the financial crisis.

“A bank in the UK could lend, say, $1bn to a US bank… generating tax-free income in the UK but a tax deduction in the US – and then simply borrow it back. For the second leg a different instrument could be used that generated tax-free income in the US and a tax deduction in the UK. The banks had simply swapped $1bn, to no economic effect beyond two tax breaks, while quite possibly keeping any mention of the debts off either’s balance sheet. Such tricks – the creation of debt more for tax advantages than any real business need – undoubtedly contributed to huge levels of inter-bank indebtedness that triggered the financial crisis.” – Richard Brooks, The Great Tax Robbery, p86.

If you are not deeply disturbed by the implications of the above quotation, read it again until you are. Richard Brooks is saying that the major banks of the UK, the USA, and who knows how many other countries colluded to hide massive amounts of money from the tax man by claiming – falsely – that it was debt.

The financial crisis happened because the banks could not service the debt they had created – they could not even pay back the interest on it, let alone the debt itself – and so the government was forced to step in and bail them out. So now the government had not only lost the tax it was due from the bank profits that had been hidden by the dodge Mr Brooks mentions, but it had now taken on the fake debt that had been created. The taxpayer was doubly the loser.

Who pays back the debt? Not the banks. Not the large corporations that are also avoiding tax. Not the rich businessmen and women who dreamed up the tax dodges. Thanks to changes in the law and already-existing legal loopholes that have not been closed by the Coalition government, they have been able to park their ill-gotten gains in offshore tax havens, depriving the nation of the wherewithal it needs to fix the problem they created.

Now it seems the government is also being deprived of badly-needed tax money because of the way large firms are structuring their pay packets – to the disadvantage of low-paid workers. The details were in Channel 4’s Dispatches documentary, Secrets of Your Pay Packet, broadcast on October 21.

With more people in work than ever before, the UK should be getting massive amounts more in tax and National Insurance, allowing it to provide the services we expect and pay down the national deficit. But the deficit hasn’t budged. Why?

Because the new jobs are part-time, self-employed or temporary.

Self-employed contracting means you can end up working for less than the minimum wage (you’re paid a fixed daily rate for the job, not the hours it takes to do it, so if it takes a long time to get it done, your pay-per-hour diminishes proportionately – and, as you are self-employed, you’re not entitled to the minimum wage).

Conversely, if you are employed part-time, you can end up working too few hours to qualify for tax or National Insurance (so you don’t get enough credits to pay for your pension later in life and the Treasury doesn’t get the tax money it needs to pay for services and clear debts) and on a personal level you don’t work enough hours to qualify for decent holidays. The company doesn’t pay for employees going on annual leave, potentially saving tens of millions of pounds.

If you work overtime, this doesn’t count towards annual leave, of course. So you can be employed on a part-time contract for, say, three days a week, be asked to work two more days overtime (a full five-day week) and lose out on all the benefits a full-time worker would expect.

The threshold is 20 hours per week. If you work less than that, employers do not have to pay NI contributions which would cost them nearly 14 per cent of pay. So people may work all their lives but never qualify for the state pension.

This is why more people are now in work than before the recession – it’s a cheat by bosses. They’re the ones who pay your tax and NI contributions. If you’re on pay that’s below the new tax threshold, you don’t pay tax. We have the Liberal Democrats to thank for that. It seems like a good deal but in fact it isn’t.

Meanwhile the companies say that cutting down working hours has saved jobs in a hard business environment, while the number of full-time jobs is down and wages have now fallen by 12 per cent in real terms (up from nine per cent, only a few months ago).

It is cheaper for companies to employ more people on shorter hours because they pay less to the government in tax and NI. And they say the “flexible” labour market has been a boost for the country, that having a job is better than having no job, and that it will help people progress.

That is not what we see.

We see a workforce ground down by the pressure of making ends meet on part-time or zero-hours jobs, making no NI contributions, getting very few holidays, and afraid to challenge the situation because their employers can simply let them go and hire someone else from the huge 2.5-million-strong pool of the unemployed (who are desperate for jobs because the DWP fills their entire lives will bullying and threats about losing their benefits).

We see the government completely unable to cover its costs because its own tax system – written by the ‘Big 4’ accountancy firms that have been responsible for more tax avoidance schemes than any other organisations in the country – actively promotes corporate tax avoidance; and Conservative ministers are totally indifferent to the huge losses they are piling up, because it means they can cut public services, or sell them off to (again) big corporations who will then avoid paying tax on them.

And we see the rich corporates laughing all the way to the (offshore) bank yet again.

The Coalition government has tried to tell us that it must squeeze benefits for the extremely poor, and low-paid working people must work much harder, in order to pay off the debt that – no matter what ministers tell us – neither they, nor the last Labour government, created.

In fact, this has been a story of tax avoidance by the very rich. A huge scam, running for decades, and hidden from the British people.

Are you angry yet?

Another Tory ‘bait-and-switch’ scam – shares-for-rights scheme is employers’ tax dodge

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'Starve the Beast', Another Angry Voice, avoidance, bait and switch, budget, capital gains, Coalition, congress, Conservative, Corporation Tax, debt, deficit, dodge, economy, employee owner, employee shareholder, evasion, flexible working, George Osborne, government, Mike Sivier, mikesivier, Mirror, OBR, observer, office, people, politics, redundancy pay, responsibility, rights, shares, social security, statutory, tax, Tories, Tory, trade, training, TUC, unemployment, unfair dismissal, union, Vox Political, welfare, work, workers

“This government is taking action domestically on [tax] avoidance and evasion,” wrote George Osborne in an article for The Observer, back in February. How right he was.

The Tory-led Coalition has done everything in its power to facilitate tax avoidance and ignore evasion, it seems, including the latest wheeze, which is to link it with a feeble attempt to get working people to throw away their rights in exchange for a few shares.

The BBC has reported that the new status of “employee shareholder” has come into force, allowing working people to claim shares in the company that employs them, if they give up the rights to claim unfair dismissal and statutory redundancy pay, the right to request flexible working (except in the case of two weeks’ parental leave), and some rights to request time off for training.

Nobody in their right mind would do this and expert opinion is that take-up will be small. So why do it?

Well, it’s not about the workers at all. It’s about helping company bosses avoid paying their taxes. Even the right-wing-leaning BBC was unable to cover up the facts (although it left them until the end of the article):

“Companies can also claim some corporation tax deductions on the issuance of shares to employees.”

Yes – it’s a tax dodge!

Here’s how it works, according to the Mirror: “New analysis show[s] it could also allow executives to avoid paying revenue on company shares. Tax experts commissioned by the TUC believe ruthless bosses could classify themselves as ’employee owners’ to escape Capital Gains Tax. And the Office for Budget Responsibility estimates the scheme could cost up to £1 billion, mainly due to tax avoidance.”

This will, of course, involve a drop in tax income to the Treasury, meaning increases in the national debt and deficit, which the Tories will no doubt use to justify further cuts to public service budgets as part of their ‘Starve The Beast’ agenda. Remember, this country has a chancellor who, for ideological purposes, actually wants to harm the British economy.

Meanwhile, as our friend at Another Angry Voice has put it: “If you’re thick enough to cash in your labour rights for a few grand worth of shares in the company you work for, then in a couple of years time when people are calling you ‘feckless’ for being unemployed, you’ll be one of the minority that actually deserve it (and your shares might well be worth only pennies in the pound compared to the value they had when you scrapped your labour rights to get them).”