The Guardian and tax havens

No, leave aside the hypocrisy and look at the logic here:

A regular punter who tried to make his tax payments conditional on a guarantee of anonymity from officialdom and a reduced tax rate wouldn\’t get far. But where the punter in question has serious cash in some Alpine hideaway, then HMRC is suddenly reduced to a humble supplicant, and so it has now made concessions of precisely this sort in relation to Swiss banks.

Yes, this is true.

And tax havens ought to be easy enough to bring to heel: they survive only thanks to the defence and other protections extended by real states,

Note \”real states\” there.

Forcing the rich to pay their share is perfectly possible, but it will never happen while there is such an egregious failure of political will.

Well, yes, except for that problem of \”real states\”.

Another word for the same thing is \”sovereignty\”. Other countries get to determine what the tax law will be in those other countries just as we get to determine what is tax law here. The reason that HMRC is a humble supplicant in Switzerland is because Switzerland is one of those sovereign nations, you know, a \”real country\”, one which gets to make its own laws.

Now, we have had a system whereby a few favoured nations get to decide what the law is to be elsewhere. Get to decide who is a \”real country\” and who is not. Some grouping of Wogs, Ragheads, Toerags or Picanninies was not a real country and required pinkish European people to impose law upon them whatever their own personal preferences. Some of the smaller places inhabited by pinkish European people were also so treated (think of all the various statelets of Germany that Bismark etc vacuumed up, even the Cantons of Switzerland who have gone to war with each other more than once over whether everyone should celebrate Mass with transubstantiation or consubstantiation).

We also have a name for this system: \”Imperialism\”.

What amuses (or horrifies, to taste) is that those who claim most vociferously that Imperialism was and is bad, M\’Kay, are exactly those who would impose a new Imperialism of taxes.

Which is something of a pity really for I thought we\’d got all of this sorted out in the 20th century. You know, rights of sovereign nations and the rights of self-determination? Stalin doesn\’t get to tell Poland what the country\’s social and economic system is, nor the US what the UK\’s is, and Richard Murphy doesn\’t get to tell Switzerland what its tax system is?

15 thoughts on “The Guardian and tax havens”

  1. The issue here is “Switzerland” versus “other tax havens”. If Switzerland were invaded, the Swiss Army (backed up by General Bloody Great Mountains, as well as the citizen militias) would indeed defend it. So it’s obviously a Real Country, and anyone saying otherwise is daft.

    However, the same is absolutely not true for every other tax haven. The Channel Islands and the IOM are dependent on the British Army; Monaco is dependent on the French Army; Liechtenstein on the Swiss Army; and so on. They *aren’t* real countries; they’re quaint relics that real countries tolerate.

  2. @John b: so what you’re saying is that there’s a hierarchy of nations then? Any nation small enough that it can’t defend itself from a larger one no longer has the right to self determination? And can have its internal affairs dictated to by the larger nations?

    Where do you draw the line though? I doubt we could defend ourselves against quite a few nations in the world today – does that give them the right to tell us what to do? Does the largest most powerful nation rule the world? Is might right after all?

  3. john b, is just reiterating Tim’s point about imperialism. The logical endpoint of that argument would be the US militarily enforcing whatever tax policies suited it on an almost worldwide basis because only a couple of states have the muscle to stand up to it.
    Or conversely, the Isle of Man’s financial strategy should be to get it’s hands on a nuclear weapon & then tell HMRC, Richard Murphy & co to fuck right off.

    Come to think of it, that really does have a lot going for it………

  4. Well not quite. Ritchie does get to tell Switzerland what to do, because that’s the glory of free speech, and even more gloriously, Switzerland has four official languages in which to tell him to fuck off.

  5. What amuses (or horrifies, to taste) is that those who claim most vociferously that Imperialism was and is bad, M’Kay, are exactly those who would impose a new Imperialism of taxes.

    Oh no, they were always pretty selective when they railed against imperialism. I never heard them champion the right of Kazakhs or Latvians to self determination when they were under the bootheel of the Soviets. Imperialism is only bad when it is done by people they are politically opposed to, but imperialism was all fine and dandy if done by communists and “progressives”.

  6. “leave aside the hypocrisy”: what, on the grounds that hypocrisy from the tox-dadger is required by the terms of the Scott Trust Limited?

  7. I’m always fascinated by those who think the rich should pay their “fair share”. If we looked at what services tax money pays for against what the rich actually use (NHS, benefits, etc), we might find the rich should be paying considerably less than they do – if we were keeping things “fair”.

    Wow – I’ve just read that back and I sound like a Tea Party supporter! I’m not sure whether that’s a good thing or not – I do believe in reduced government and fewer taxes, but I don’t want to see genuinely poor and disadvantaged people hung out to dry either.

    On reflection, I think that makes me normal.

  8. To Further Jamie’s point:

    I live in a country where the Rich hide their money offshore, and the poor work in the unregistered economy.

    The Middle Class pay most of the taxes, but send their children to private schools, and get treated in private hospitals, because the state provision is crap. If there were any fairness in the tax system, the state would collapse under its debts.

  9. “If we looked at what services tax money pays for against what the rich actually use (NHS, benefits, etc), we might find the rich should be paying considerably less than they do – if we were keeping things “fair”. ”

    Nobody gets rich in a vacuum, the vast bulk of rich people depend on the labour of the non-rich in creating, maintaining and enjoying their wealth. I don’t think anyone is under the illusion that the tax they pay should be returned to them individually 1:1 in public spending. Our society works on this principle of pooled risk – everyone should have a shot at getting wealthy, and those who made it kick some of that wealth back to ensure the provision of social and healthcare safety nets for the rest. Whether this net is provided by a monopoly provider (NHS) or via mandatory individual health insurance is another discussion entirely (I would favour the latter). However, it is clear tax rates are far too high relative to the service returned to the public by the ‘public’ sector and that waste is endemic in the entitlement culture of today.

    But to state the rich should only be taxed on the basis of what they, as individuals, use? I would say that is narrow minded and probably a little selfish.

    I admire Dan Hannan very much, I think what I am trying to get across is similar to the argumennt he puts across so eloquently here:

    http://www.youtube.com/watch?v=e9IYcq6hzJE&feature=player_detailpage#t=14s

  10. marcadia said: “But to state the rich should only be taxed on the basis of what they, as individuals, use? I would say that is narrow minded and probably a little selfish.”

    Not really. It’s just a different definition of ‘fair’.

    From each according to his ability, to each according to his need is one such way.(but who decides the levels of ability and need?)

    Pay as you go public services would everyone equally regardless of wealth.(note: The equality is in opportunities not in outcomes.)

    Should we all pay the same income tax rate? Should we all pay the same income tax?

    What is and isn’t fair depends entirely on your own opinions.

  11. …..But to state the rich should only be taxed on the basis of what they, as individuals, use? I would say that is narrow minded and probably a little selfish……

    It would also be pointless. If we only recieved back what we paid in why not cut out the middle man.

    Its not that we should all get out what we put in, but rather that the idea of fair is really very arbitrary when it comes to tax.

    As for selfish, voting for a government that will transfer someone elses wealth to you, using threats of violence, surely has to rank near the top of the selfishness league.

  12. “Should we all pay the same income tax rate? Should we all pay the same income tax?”

    Yes. Combine Income Tax with NI so people can see the rate they’re taxed at. Then tax everyone at the same rate – 20% or similar.

    Gareth/Serf – yes, ‘fair’ is subjective, let us not get into pointless semantics. I’m trying to come at it from a more utilitarian perspective – I’m not advocating government redistribution, nor am I condemning it. My point is that there has to be a safety net one way or another in modern society.

    That those at the top of the tree will end up contributing more to the upkeep of said safety net will always be public opinion, and thankfully we live in a democracy.

    The right questions to ask are thus what kind of safety net, how should it be funded, should the state be responsible?

  13. @Jamie: the reason there is this constant drone of ‘the rich should pay their fair share’ despite there being progressive taxation in this country (ie the rich pay MORE than their ‘fair share’) is that a huge number of people are mathematically illiterate. They think that a flat rate of tax means everyone pays the same and that the tax for the rich must be at a higher % rate for them to pay more tax. They think that if you earn twice what they do your tax rate has to be twice theirs, otherwise its not ‘fair’.

    Such people get hit by the proverbial 4×2 to the back of the head if they ever get into the higher rate tax bracket, or get a windfall and have to pay CGT or IHT. The squeals of pain can be heard for miles then. The reality of progressive taxation suddenly becomes painfully apparent.

  14. Richard Murphy would like to decide every country’s tax rate, actually – not just Switzerland’s. In his eyes any tax rate that is lower than he thinks it should be is “abusive” – note the emotive language. Whether the country concerned has the right to set its own tax rates without regard to other countries (or indeed to his opinions) means nothing to him.

  15. What Tim Newman says (and what Serf says re: selfishness)

    The (Fabian) Left talk to the poor about removing elites, but what they mean is replace the current elites with themselves. When they speak of removing Imperialism, they act to replace it with their own.

    Their hatred, it seems, is based in Covetousness.

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