International News - to Sept 9
Sept 8 (TJN) - TJN has slowly been building up an archive of quotations, to which new ones are being added all the time. The page, which contains nearly 200 quotations so far, is here.
Guest blogger: tax and health
Sept 9 (TJN) - The Commission on Social Determinants of Health (CSDH), set up by the World Health Organisation, may seem an unlikely source of support for reform of international rules on taxation. But the Commission’s report goes far beyond the immediate causes of ill health to the “causes of the causes”.
America's wages - the big story
Sept 4 (TJN) - The wages of America’s richest citizens are fallilng. Why? It’s being more than made up for by their capital incomes. . . The share of adjusted gross income due to wages was 82 percent in 1980. By 2000 it was down to 70 percent, and in 2006 it slipped to 68 percent of all income."
Should donors cap aid in Africa?
Sept 3 (TJN) - On an FT article. "Donors collectively set an upper limit on the amount of aid they give to any developing country, at 50 per cent of the tax revenue the aid-receiving government gets from its citizens, non-coercively and excluding mineral revenues. Governments of non-mineral countries would depend for revenue mainly on their citizens, and give them incentives to pay attention mainly to what citizens want, not donors. Building on Mick Moore’s work. See debate in the FT Economists’ Forum here.
Sept 5 (TJN) - UK opposition shadow chancellor writtes to British chancellor (finance minister) saying that companies are leaving because corporation tax is too high. Richard Murphy shows this reflects a "staggering admission of lack of understanding of how the tax system works." Simplifying a tax research blog.
Not on my watch, please
Sept 3 (TJN) - Many people, including a number of readers of this blog, will not have read the last edition of our newsletter, Tax Justice Focus. It focused strongly, but not entirely, on the links between tax havens and the current international financial crisis. With apologies to those who did read the editorial for that edition, here it is again, very slightly modified for blogging purposes.
A Wealth of Opportunities in Turbulent Times: Global Wealth 2008
Sept 2008 (Boston Consulting Group) - In 2007, global wealth grew by 4.9% to $109.5 trillion, the sixth consecutive year of expanding wealth. Equities accounted for $43.5 trillion. From 2002-2007 wealth owned by $5m+ HNWIs grew by 15.7% annually, from $10.1trn to $20.9 trn. Offshore wealth accounted for 28% of assets in Middle East/Africa; 24% Latin America, 10% in Asia-Pacific, 9% in Europe, 1% Japan, 2% North America; in 2007 offshore wealth increased 8.4% to $7.3 trn according to their (narrow) definitions.
Swedish prostitutes want to pay taxes
Sept 8 (The Local) - More and more Swedish prostitutes want to pay taxes in order to receive the social welfare benefits that come with doing so.
Globalisation: multinationals love tax havens
Sept (Alternatives Économiques) by Christian Chavagneux - According to Robert Lipsey of NBER: divide companies’ assets by number of employees, and the world average is $1m; $4-5m for Ireland/Netherlands /Switzerland; $22m for Barbados and over $45m for Bermuda. Post-tax profits of subsidiaries (ignoring interest and investment dividends) divided by labour compensation: the world average is 84%, but 160% for Switzerland, 660% for Ireland and 3500% for Barbados and Bermuda. In French. Lipsey's paper is here.
Is tax back?
Aug 28 (The Economist) - One of the oddities of the New Labour era has been the disappearance of tax (politically, not financially). The economic downturn has brought tax back to the centre of political debate.
Lloyd's 'needs' changes on tax
Sept 5 (FT) - The government must urgently reform Lloyd's tax regime for the 320-year-old insurance market to retain its pre-eminence, Lord Levene of Portsoken, chairman of Lloyd's, warned last night.
PM urged to take extra tax from ‘super-rich’
Sept 6 (FT) – UK Prime Minister Gordon Brown was on Friday warned by Britain’s top trade unionist that he was facing a new onslaught from the Labour left unless he took on the “super-rich” and reined in his government’s close relationship with the City and big business.
Zug thrives in mild regulatory climate - This is the face of corporate corruption: the corruption that seeks to profit in a world without rules
Is there an exit strategy?
Sept 8 (Guardian) – by Ken Rogoff. So far, the strategy of maintaining banking systems on taxpayer-guaranteed short-term credit has made sense. But eventually central banks must pull the plug or credit losses will overwhelm their balance sheets. Central banks can either dig their way out through inflation or await recapitalisation by taxpayers. Both solutions are highly traumatic.
Sweden to cut corporate tax rate
Sept 8 (The Local) - Sweden's centre-right coalition government said it would cut the corporate tax rate to 26.3 percent from 28 percent from 2009.
Jersey Fiscal Policy Panel Publishes First Report
Sept 9 (TaxNews.com) – A panel set up to give “independent” advice on Jersey’s fiscal policy has published its first report, which contains advice and recommendations on tax and spending policy for the Treasury and Resources Minister and the States.
Liechtenstein Announces Tax Reform Package
Sept 9 (Tax News) - The focus of the reform package will be the introduction of a uniform 12.5% profit tax for companies, combined with a deduction for equity capital and an exemption for earnings from holdings. The current capital tax and the coupon tax on securities will be abolished.
U.S. Companies Shifting Tax Burdens Overseas
Sept 9 (WebCPA) - U.S. and foreign tax rules increasingly influence where multinational companies report their income is being earned, according to a new report. The GAO found that the number of foreign operations of U.S. companies has been increasing, with the largest companies often paying the lowest effective tax rates and more income being reported in lower tax rate jurisdictions outside the U.S.
Fannie, Freddie Get Tax Pass, Too
Sept 8 (CFO.com) - Treasury Secretary Henry Paulson did for Fannie Mae and Freddie Mac on Monday, when he had the IRS issue Notice 2008-76, which essentially allows the two government-sponsored enterprises to retain all of their net-operating losses (NOLs), despite a change of control of ownership.
Swiss to lower tax burden for hedge funds
Sept 5 (Reuters) - Switzerland plans to ease the tax “burden” for hedge funds and private equity funds and “soften” regulations for investment funds in a first step, getting the tax burden for hedge funds and private equity funds in line with taxes of 15 to 20 percent in competing centres like London or New York.
“EU Tax Commissioner Puts CCCTB Proposal on Hold” -
No further info available at this stage.
Indonesian House passes tax-cutting tax bill
JAKARTA, Sept. 3 (Xinhua) -- The Indonesian House of Representatives on Tuesday endorsed an amendment to the income tax law aimed at boosting economic activities by providing lower rates and more incentives to businesses, a paper said here Wednesday.
Sarkozy considers new capital gains tax
Aug 27 (IHT) - President Nicolas Sarkozy of France is considering a new capital gains tax on dividends and rental income to raise minimum wages and finance incentives for unemployed people to go back to work, undercutting his previous pledges to cut levies.
The bountiful game
Even allowing for the frenetic pace of modern-day football deals, this week’s events took the breath away. “This has become a club for the trillionaires.” The super-rich club owners are now jostling with the dynasties of petrodollar-filled kingdoms. the Premier League is floating up and away from rival leagues.
The Economist wins Berlusconi lawsuit
Sept 5 (The Economist) - In July 2001 Silvio Berlusconi launched a lawsuit in Italy alleging that The Economist had defamed him. The magazine cover bore the title: "Why Silvio Berlusconi is unfit to lead Italy". The Court in Milan has rejected all Mr Berlusconi's claims and requiring him to make a payment for costs to The Economist.
Dialogue on Switzerland's financial centre: promoting collective investment instruments - early recognition of international developments
What me stikes most: it is done by agreements between representatives of the Financial centre and the authorities under exclusion of democratic institutions (parliament).
Jersey case puts focus on haven cash
Sept 3 (FT) - Wealthy business people could exploit Jersey and other tax havens in an attempt to shield themselves from big money divorce payouts, after a crucial Channel Islands court ruling.
Sept 4 (FT) - Alex Salmond, leader of the independence-seeking Scottish National party and first minister of Scotland, announced plans this week to abolish the council tax and replace it with a local income tax.
HSBC says super-rich clients moving into cash
Sept 1 (Reuters) - Many of the world's wealthiest people have moved their money out of stocks and bonds and into cash, the head of HSBC's Swiss private banking unit said on Monday.
Time to get serious on tax fraud say MEPs
Sept 1 (EU Parl’t) - European MEPs want action against tax avoidance, a wider scope for the Savings Tax Directive and action through the OECD to tackle tax havens. Member States are hindering Savings Tax Directive reform and it must be updated to remove loopholes and deficiencies; the Commission must explore widening its scope on legal entities and sources of financial revenue.
FACTBOX-Greece's tax package to boost fiscal revenues
Aug 27 (Reuters) - Greece's conservative government on Wednesday announced a package of tax reforms designed to raise flagging fiscal revenues in the face of an economic slowdown. Here are the principal points of the package.