View previous stories
	Housing is a right, tax-dodging is wrong by London Review of Books, Tax Justice Network London Review of Books United Kingdom   June 2014   "Vodahome", by Anna Aslanyan.   ‘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 investigation that started the first wave of protests in 2010 uncovered a ‘sweetheart deal’ between Vodafone and HMRC. The then chief tax collector Dave Hartnett was criticised by the Public Accounts Committee for letting the company off with paying only £1.25 billion after litigation that lasted nearly a decade. A report by the National Audit Office concluded that the deal was ‘reasonable’, if not fully in line with HMRC’s policies. All parties agreed that the issue was highly complicated – a point Vodafone insists on.   The latest figures need some unpicking too. One reason for the apparent disparity between profits made and taxes paid is a tax break peculiar to Luxembourg which, according to Reuters, ‘lets companies cut their income taxes using costs that they haven’t actually borne’. Another is that Vodafone’s sale of its stake in the US operator Verizon Wireless, which brought it £84 billion last year, was not liable for UK capital gains tax. Even if it had been, the deal would qualify for the substantial shareholdings exemption introduced in the 2002 Finance Act to encourage capital investment in the UK. Vodafone talks about its ‘huge investments’ here and says its profits are a ‘small fraction’ of the revenue. UK Uncut is planning a series of further demonstrations on the question of corporate social responsibility in the run-up to Vodafone’s AGM next month.   ‘If you want to use our police pay your tax,’ the crowd in Oxford Street chanted, telling everyone around that Vodafone owed the British public a lot of money. ‘I don’t understand how that’s possible,’ a passer-by said. ‘Me neither,’ replied a man with ‘I pay more tax than Vodafone’ written on his back. Other posters mentioned the 1.6 million households on waiting lists for social housing, and the 30,000 people forced out of their homes because of the government’s cuts. Eventually the group inside the shop joined everyone on the pavement. The women were from Focus E15 Mothers, social housing campaigners from East London. They are organising a march for ‘Our Right to Decent Housing’ on 5 July.   When the staff closed the shutter, one of the women complained about ‘the heavies’ pushing her. ‘For the first time in my life,’ she said, ‘I want to say thank you to the police.’ The same officer tried to persuade the protesters to move on, but got nowhere. The man in the Gary Barlow mask expounded further on Vodafone’s liabilities. ‘Yeah, but is it your personal opinion,’ the policeman interjected, ‘or is it like a fact?’   http://www.lrb.co.uk/blog/2014/06/16/anna-aslanyan/vodahome/ http://www.taxjustice.net/ http://taxjustice.blogspot.com.au/   June 11, 2014   Congress to hand hundreds of billions more in Tax Breaks To Big Corporations, by Dave Johnson.   This one is simply outrageous. Corporations currently owe up to $700 billion in unpaid, “deferred” taxes. The country needs the money – partly because these companies owe so much in taxes. Which of the following choices should the country make?   1. Tell the companies to pay up what they owe, bringing us hundreds of billions to use now and tens of billions a year more from now on.   2. Let them off the hook from ever paying most what they owe, if only they please would let us have a little bit of it now.   Who Is The Boss Of Whom?   The choice depends on who you think is supposed to be the boss of whom. If you believe that We the People are in charge of this country, then obviously you’d say these corporations should just pay the taxes they owe. But if the corporations are in charge of us they’ll tell us they aren’t going to pay these taxes unless we give them something.   Not surprisingly, Congress appears to be working toward option ’2.’ It’s called a “repatriation tax holiday.” They are proposing to tell the companies that moved jobs, factories and profit centers out of the country that it was the right thing to do. Unfortunately that will tell companies that didn’t do these things that they were chumps.   What Is A Tax Holiday?   Here is what’s going on. Giant, multinational U.S. corporations owe our government up to $700 billion in taxes on about $2 trillion in profits they have made (or made it look like they made) outside of the country. But there is a loophole that lets them hold off on paying those taxes owed until they “bring the money home.” So of course, many corporations have been engaged in all kinds of schemes to make it look like they make their money elsewhere – and/or move jobs, factories and profit centers out of the country.   Why is this important right now? In a New York Times “politics” story Tuesday, “Plan to Refill Highway Fund Stokes Conflict in Congress,” this nugget:   [Sen. Harry] Reid and [Sen. Ron] Paul are quietly pressing for a one-time tax “holiday” — a special and lucrative tax deduction — to lure multinational corporations to bring profits home from overseas, producing a sudden windfall.   Instead of telling these corporations that it’s time to pay up, it looks like Congress is preparing to just let them keep much (85 percent) of the money. It’s called a “tax holiday.”   What is the “conflict” the headline talks about? It isn’t a conflict between those who want to hand corporations hundreds of billions of dollars and those who do not want to. The conflict is over how to hand them the money!   Senator Ron Wyden, Democrat of Oregon, the Finance Committee chairman, and Senator Orrin G. Hatch of Utah, the ranking Republican, want that money to help smooth passage of a broad rewrite of the tax code.   So if Senator Reid is on board for a tax holiday and Senator Wyden is on board for a tax holiday, it looks like the idea of giving this huge amount of cash to these corporations is baked in to the thinking in the Senate. And we’re talking about Democrats here. One side wants (Reid) to give them a tax holiday and get a little bit to use to pay for infrastructure, the other side (Wyden) wants to use it as a bribe to get these giant corporations to let the U.S. government “reform” the tax laws. Both sides are conceding that they’ll accept a tax holiday.   But no one in this discussion is just saying, “Hey, we’d get up to $700 billion and tens of billions every year from now on if we just told these companies to pay the taxes they owe.”   The idea is to give these companies an 85 percent deduction – the “tax holiday” – on their foreign profits and only taxing 15 percent of the profits. In other words, instead of taxing $2 trillion of profits being held out of the country they’ll only tax $300 billion. If these corporations “bring the money home.”   Bloomberg News looks at the cost of this, in “Repatriation Tax Holiday Would Cost U.S. $95.8 Billion.” The “holiday” would bring in a quick $19.6 billion, but would cost $95.8 billion of tax revenue that would come in anyway over the next decade with no changes – not even making these companies just pay up. (Note: This calculation assumes Congress won’t just tell these companies to just pay their taxes. That would bring in up to $700 billion at the top tax rate of 35 percent and tens of billions a year from now on. Companies can deduct any taxes already paid elsewhere, so “up to” means $700 billion minus taxes paid elsewhere.)   That’s right, after all these years of propaganda about budget deficits and the hostage-taking and the “fiscal cliff” and the “debt ceiling” and the sequester and all the resulting budget cuts in essential services and “austerity” and how this has held back the recovery … it looks like Congress is going to just let companies off from paying hundreds of billions of taxes they already owe. This is not about passing another tax break/subsidy, etc. These are taxes that are due and payable on profits that have already been made but that these companies are keeping outside of the country (and away from their shareholders).   Why would Congress even consider letting these corporations off from paying the taxes they owe? Because of rules about not increasing the deficit Congress “needs” the money. This is a “realpolitik” deal, recognizing that the companies have enough power to keep Congress from just making them pay up what they owe. The thinking is they can appease the corporations with an 85 percent tax holiday to get them to pay at least 15 percent of that they owe.   This is another engineered “crisis” where the country is made to believe that deficits are keeping us from doing things we need to do. We need to fund transportation infrastructure, we can’t borrow the money to invest in things like this that make our economy more efficient, hence the need to “incentivize” the corporations to please bring home some of the money they owe us.   In 2004 corporations ran the same scam on Congress, except that time they promised to use the money they brought back to “create jobs.” So what happened?   In 2011 the Institute for Policy Studies (IPS) looked at the results of the 2004 tax holiday and found that “their holiday didn’t just fail to create the promised jobs. Their holiday enriched corporations that actually destroyed jobs in the months right after they received their tax windfall.” IPS found that 58 multinationals who used the “American Job Creation Act of 2004"; tax holiday not only immediately laid off tens of thousands, they continued laying off, and laid off close to 600,000 workers between 2004 and now. From the IPS summary of the study,   One government study looking at the first two years after the repatriation windfall found that 12 of the top recipients laid off more than 67,000 American workers. These firms collectively brought back home more than $100 billion …   According to IPS, the companies that gained the most from the tax holiday actually cut jobs, on top of that they used the tax gift money to buy back their own stock, increasing its value, and pay out dividends, both thereby enriching executives and shareholders.   (This is from 2011. Another half a trillion of profits have been shifted offshore since then.)   From the Times story,   In 2004, when Congress approved a similar holiday, lawmakers vowed never to do it again. If it became a habit, they reasoned, companies would keep their profits overseas waiting for the next tax holiday. That, the bipartisan Joint Committee on Taxation explained, is the idea’s “moral hazard problem.”   The 2004 tax holiday only made things worse because companies realized they could get out of paying taxes entirely if they moved profits offshore and held out until the next holiday season. If we do it again, every company will be compelled to move jobs, factories and profit centers out of the country to stay competitive.   They are going to try to sneak this through under the radar. Maybe We the People can stop it if we make enough noise.   http://ourfuture.org/20140611/will-we-let-congress-hand-billion-more-to-big-corporations http://talkpoverty.org/ http://ourfuture.org/20141001/why-you-shouldnt-be-optimistic-about-corporate-tax-reform   Corporate tax breaks cost poor nations $138 billion a year. (ActionAid)   Developing countries could send every child to school, meet all the health-related Millennium Development Goals and have money left over if they cancelled tax incentives for big multinational corporations, according to a report by campaign group ActionAid.   The report entitled “Give us a break: How big companies are getting tax-free deals,” estimates that developing countries lose more than $138 billion a year of government revenue through corporate tax exemptions alone.   “Big companies are doing deals to avoid paying tax on their massive profits. They’re playing developing countries off against each other to get good tax deals for them, but bad deals for the world’s poor,” ActionAid’s advocacy manager Soren Ambrose said.   The report cited the World Bank’s Investor Motivation Survey for the East African Community, in which 93 percent of investors said they would have invested anyway, even if tax incentives had not been on offer.   In a ranking of investor motivations, tax incentives came 17th, behind factors including exchange rates, labour costs and transport infrastructure, the World Bank survey said.   “Governments aren’t collecting the tax which is rightfully theirs. They’re openly letting big companies pay less tax,” Ambrose said. “Some countries are even offering completely tax-free deals – a lose-lose for all involved, especially poor people in urgent need of services like schools and hospitals.”   “In the long run, governments and companies are sabotaging the development of the skilled and healthy workforces that could lift their countries out of poverty,” he said.   Developing countries in East Asia and the Pacific region lost more revenue because of corporate tax exemptions than any other region, an estimated annual loss of $55.1 billion, ActionAid’s report said. Latin America and the Caribbean missed out on an estimated $33.2 billion a year while sub-Saharan Africa lost an estimated $7.6 billion a year, the report added.   http://www.trust.org/item/20130704171338-lvmdw/?source=quickview http://www.trust.org/item/20140226151645-jbwui/?source=quickview http://www.taxjustice.net/ http://www.oxfam.org/en/dc/pressroom/reactions/imfs-new-report-global-corporate-taxation-wake-up-call http://blogs.oxfam.org/en/blogs/14-03-20-tax-inequality-heart-european-public-discontent Visit the related web page
	Remember, Mandela told us, “It always seems impossible, until it’s done” by Navi Pillay UN High Commissioner for Human Rights   We are about to watch a film about a time when the people of the world united in favour of equality, dignity, forgiveness and joy.   Thousands of kilometres away from South Africa – where apartheid, a system of institutionalized racial segregation, was generating brutality and humiliation on a massive scale – women, men and children who were in no way directly connected to that situation began protesting.   Ordinary families from all over the world boycotted goods produced under apartheid. And as that boycott heightened, a number of musicians staged the biggest concerts the world had ever seen to protest apartheid and demand the liberation of Nelson Mandela.   As Mandela said, those people “chose to care”. And to us in South Africa, that was exhilarating and deeply moving – to think that the injustice, fear and violence that we daily suffered mattered to so many people, so far away.   The apartheid government resisted international scrutiny. It brandished the slogan, “Do not interfere in our internal affairs”. This is a slogan that I, as High Commissioner, and the Human Rights Council have often encountered, as governments warn us not to intrude in the internal affairs of sovereign states with our human rights concerns.   But the apartheid regime could not intimidate the people of the world, or the organisation of the United Nations. They persisted in their fight for equality and dignity. And apartheid was vanquished. After he was freed, Mandela traveled to New York to, as he said, “salute the United Nations and its Member States, both singly and collectively,for joining forces with the masses of our people, in a common struggle that has brought about our emancipation and pushed back the frontiers of racism.”   In following years, through sheer force of example, Mandela led South Africa away from the very brink of bloodshed and vengeance. He invited his own oppressors to join in his government. He taught us that bigotry and discrimination are never justified, on any grounds – not even tit for tat. He never sold out, he never caved in, and despite everything he endured, he never seemed to develop bitterness, cruelty or rancour. He showed us that we cannot ever be truly free at the expense of others’ freedoms.   You’ve heard people talk about the law of force and the force of law. There is also the power of inclusion, the strength of empathy, the deep pull of justice and the magnetism of forgiveness and love. When Nelson Mandela created reconciliation in South Africa – a country scarred by generations of terrible injustice – love triumphed over fear and hatred, and empathy and inclusion triumphed over domination and greed.   Today is Mandela day. All of us are asked to devote 67 minutes to the service of others – to activities that promote social justice and human rights, or which help vulnerable people – in order to honour Mandela’s 67 years of struggle for freedom and justice.   All of us have, within us, a Nelson Mandela. Someone who desires to change the world. Someone who is strong enough and committed enough to effect real change. Someone who yearns to live in a way that respects and enhances the freedom of others.   I believe that not only are all human beings born free and equal in dignity and rights – we are also endowed with a sense of what is universally just.   Nelson Mandela’s life was a model of what one person can achieve with strength of character and force of commitment. His capacity for forgiveness inspired countless others to work for reconciliation. His leadership transformed the institutions of the South African state and saved the country from civil war. On an even larger scale, it galvanized people all over the world to work for racial and gender equality, conflict resolution, and greater justice.   Many challenges remain before we overcome discrimination and other violations of human rights. But the values that Nelson Mandela incarnated – reconciliation, fairness, equality and dignity – remain vivid. Today, by inspiring people everywhere to take action for social justice, we seek to build a global movement for human rights. All human rights, for all people, everywhere.   Remember, Mandela told us, “It always seems impossible, until it’s done”.   http://theelders.org/article/mandela-day-2014-how-will-you-be-ethical-leader http://theelders.org/news-media/ethical-leadership Visit the related web page
	View more stories