Come on El Reg - you can do better
Oxfam, the Tax Justice Network, the Global Alliance for Tax Justice, and Public Services International
So what we have is a charity that has grown so big it has failed to deliver and now no longer understands why it exists; a bunch of lefty union barons devoid of any operational knowledge about the mechanics of company & revenue structuring, who try to conceal their identities behind a simple cross border company arrangement; some rabid redistributionist’s; and a bunch of fat cat trougher public sector union barons.
The report’s conclusion was written before they even began gathering facts or evidence.
Those profits get processed through various implementations of the “Irish-Dutch sandwich” to be booked in low-tax countries like the Netherlands, Ireland, Luxembourg, Switzerland and Bermuda.
And here we have the giveaway that they don't really understand what they're talking about. In terms of structuring your revenues, this is entry level stuff that is about 5 years out of date.
The magic ingredients in the professionals secret sauce isn't some beach haven in the sun, its places like Holland for IP, Belgium for capital gains, Delaware for everything, the UK for loss treatment..... Seriously El Reg, if you're going to write about this stuff can you get someone that understands it properly to advise you? Regurgitating this socialist puff piece is beneath you and your readers.
between $500 and $700 billion gets shuffled around in this way
If they knew what they were talking about then they'd know the numbers involved aren't measured in billions. I have some professional experience in this area, so I know for a fact they don't, not with numbers like these.
There is a simple way to end corporate structuring / tax arbitrage, and it is this: Have globalised framework of rate harmonization, such that differing jurisdictions convey no advantage over each other. It is purely a problem of politics. Now, if the politicians cannot do their job, then who's fault is that? Anything else, everything else, is just tinkering around the edges.
Business is a bit like drugs in sport. As soon as one person takes them, everyone else has to just to compete (Lance Armstrong come on down). It is the same with tax minimization - as soon as one of your competitors does it, you have to, or they eat your lunch. Ideology rarely comes into it.
As the UK is in the EU, I am entitled to open a business in any jurisdiction. Let’s say I start a company today making medical devices based upon in house research as well as licensing IP from the market. If I start one company in the UK because that is where I live then I'm going to get bounced out of the market quickly. I need a holding company in Belgium for the trading company, a subsidiary in the UK for the licensing fees of the market IP, a holding company in Holland for my IP royalties (Hello Bono & U2), and a bunch of other companies for different divisions. And that is just to be able to compete in the market.
Tax is an emotive issue for most, but if anything is to change, emotion is going to have to give way to reason, logic, and pragmatism. None of this reports backers are helping that process, because they're only adding ignorant noise which is easily dismissed and which causes immense collateral damage to their cause.
There are various arguments about how much tax is a good thing, after which it becomes a bad thing. if you believe the current Shadow Chancellor that "There is no such thing as private wealth", or words to that effect, then it is 100%. If you believe the current Chancellor its about 30%. And if you believe a hard core capitalist it’s pretty close to 0% "all tax is theft" being their sentiment.
The starting point of any grown up debate isn't ranting like in this report, it is to determine what services we want the state to provide and how we want them to be provided (public/private, cheap/competent etc). A clean sheet of paper being the starting point for that. That will inform how much tax we need to raise, and after that we can begin a debate on how we raise that revenue and what "paying your fair share" really means. Is fair a flat tax? Is fair a fixed sum per person? Is fair an escalating curve such that the more you earn the greater percentage of tax you pay. Is fair something else entirely?
Biting the hand that feeds IT
