Won’t Ritchie be happy

But there is another factor to consider. All three territories I have mentioned are significant tax havens. If there are impacts on St Kitts and Nevis and Bermuda, which are also British Overseas Territories, then they too also fall into this category. Antigua and barbuda and The Bahamas are members of the Commonwealth, and tax havens. These places all set out to undermine the world’s tax systems, and are ably assisted in that task by the professional services firms that operate from them, like PWC, EY, Deloitte and KPMG. My question now is a very simple one. It is whether or not both the people making use of these tax havens and those that sell services from them should be required to contribute to the cost of bailing them out?

Should the bankers, lawyers and accountants with branch offices in those places now be expected to very publicly contribute to the cost of supporting the reconstruction required in those communities? What are the Big Four accountants saying about this?

Should companies like Virgin, ultimately headquartered as it is in the British Virgin Islands, be similarly expected to contribute in significant amount, perhaps based on the tax they might have avoided by using the place?

And should the places in question now be expected to raise considerable additional funds for their own benefit by either significantly increasing the charges they make for offshore services (for example, by raising company registration fees), or by charging tax on the companies based in these places?

That’s the Senior Lecturer. This is a Professor:

The simpler question is to ask those “elites” who save billions by using tax shelters in the Caribbean, and the Big 4 accounting firms that enable their transactions, to contribute to the relief funds. The more difficult question is how to change the status quo and make sure that these companies actually contribute to the resources they take advantage of, both at home and abroad.

And Ms. Mazzucato is a professor in a manner which Ritchie is not.

A modest proposal would be for the countries to raise money from the companies by increasing, for example, the charges they make for offshore services, or by charging tax on the companies based in these places.

Three’s no honour in academe is there, not even a mention of whose idea it was.

Tee hee.

17 thoughts on “Won’t Ritchie be happy”

  1. I think i see what you’re reporting Tim: the ancestry of the idea for Caribbean countries to charge more tax on company registrations is in question because: more money duh!
    I think also i can contribute. Ships also register themselves in such countries and but i suddenly realised that i can help these poor islands recover by contributing the idea that they should raise the fee for flag registration.

    Oh yes and i’m sure that lloyds MASSIVELY profit from the threat of things like this,,, so i’m not sure they should actually allowed to make a profit at all.

  2. If you say so but there’s a difference between Lloyd’s register and Lloyds’ insurance syndicates, n’est ce pas?

  3. He’s pissed he didn’t get the credit

    “At this point I have to correct Marianna: the argument actually came from me, writing for the Progressive Economics Group. I enjoy working with the Tax Justice Network and am often still linked to them as I was a founder of that organisation, but on this occasion they’re not involved, and I am not sure what their position is because I have not asked, so I apologise if they’re embarrassed by this.”

  4. Neil- yes you’re right. If we take a step back charging more for registrations is a massively trivial and petty thing to claim any intellectual credit for in the first place.
    But If i try to make sense of it I’d guess the claim of originality is not for not the action but the justification.

  5. @ Hallowed Be
    Lloyds’ only profits from people who pay insurance premiums. So they don’t get a penny piece from the poor people who can’t afford to insure their property. Hence it is NOT true that Lloyds’ benefits from the threat of hurricanes hitting Anguilla, Barbuda, BVI, Cuba. Hispaniola, The Turks and Caicos etc.

    In the past Lloyds’ used to make money, on average, from reinsurance of “catastrophe risks” like hurricanes but thanks to Goldspan, Bernanke etc, the “catastrophe risk” insurance market has largely been taken over by Hedge Funds looking for yield and the profits from four years with low catastrophe costs has gone to them rather than Lloyds’.

  6. Why are you expecting honour in academia?

    I once had a research project stolen by a Nobel laureate (now deceased), who got the grant off my work, sweat, and proposals, with a promise of a job that never materalised.

    I suppose that dishonourable conduct counts as “an honour” of some sorts to me. Still glad I left.

  7. John 77- don’t usually do sarcasm but in this case i know that every journalist on the story tries to find out what the insurance bill is. And knowing this i had a go at forecasting the next richard murphyism when that figure is published (tongue in cheek mind). He may never utter this but if he does yes you’ve got a good point beyond my rather crude one. The dirt poor in those islands don’t contribute to insurance market profits.

  8. @ Hallowed Be
    Sorry, hadn’t been sure whether it was sarcasm or not – first post looked like it but your reply to John Square made it look as if you were serious.

  9. On Twitter she’s claiming that anyone can learn to program but critical thinking skills are much more difficult to acquire. Can she program? Cos she sure as shit can’t critically think.

    PS: Very few people can learn to program.

  10. St Kitts & Nevis is not an overseas territory: it is a sovereign nation. Mr Murphy is so weak on constitutional matters that he cannot get even the most basic research correct.

  11. @aaa: I imagine she’s barely numerate. You very seldom need any higher mathematics to do economics, especially of the covetous and degenerate form that Mazzucato practises. I strongly doubt she has the mindset of someone who is able to program.

  12. I was also going to point out that Ritchie doesn’t even know the difference between a BOT like Bermuda and an independent country like SKN.

    He is also NOT a Professor. He is an untenured sessional lecturer with absolutely none of academic credentials necessary to ever become a tenure track professor. He doesn’t even have a Masters let alone a PhD. It is the pretension/fraud equivalent of someone with basic first aid training calling himself “Doctor”.

    With regards to the BOTs and their relationship to the UK, the various agreements are quite complex and vary significantly with regards to the separation of powers. I happen to know this because I was the solicitor who instructed the top UK Citizenship Barrister on the precedent setting House of Lords case relating to the relationship of Bermuda (which BOT-Bermuda has the exclusive power to grant residence) to UK Citizenship (which UK has exclusive authority to grant under the British Nationality Act). I then used this precedent on various other files in Cayman, T & C, and Anguilla which (unlike IOM or the Channel Islands) has this particular arrangement in this area.

    Unlike Lecturer Ritchie, other “tax justice” commentators like Nicholas Shaxson at least actually use Google and can tell the difference between BOTs like Bermuda, Anguilla, Cayman Islands, Turks and Caicos etc) and an independent countries like SKN, Bahamas and Antigua and Barbuda.

    However, they consistently DEMAND the UK government of the day change financial laws in THEIR BOTs. This demand has the fundamental flaw of mistakenly assuming that the UK retains constitutional/treaty power over the area of financial legislation. The UK does NOT have this power. IOW it is utterly ultra vires the UK. It is the exclusive power of the BOT legislature.

    These BOT legislators did not “set out to bankrupt developed nations”. They just don’t care about other countries. Like politicians everywhere BOT legislators just care about the impact on the people who will vote them in or out of power. They saw a market need and decided to pass laws to allow their economies to take advantage of exploiting this market. Many like Cayman and Bermuda have done very well as a result. The obvious externality is “tax competition” which developed nations do not like as they do not like to have to compete for tax revenue they somehow have come to believe is theirs by divine right.

    If the UK wants any local BOT legislature to adopt some change in their financial laws then they need to offer some type of valuable “quid pro quo”. The UK did this after the 1997 HK handover by offering all that BOT’s citizens a path to full UK citizenship IF the BOT adopted the then UK standard for “know your client” reviews. Since HK was no longer a BOT, the UK offered this knowing there was not going to be a sudden rush of migrants from Hamilton Bermuda to Manchester. Every BOT which was offered this deal accepted. As a result the UK was able to say that there was a common KYC standard across all their Caribbean (and Bermuda) BOTs.

    With regards to hurricane relief, the UK government could take up the mercenary quid pro quo position of “aid for changes in financial laws”. The obvious problem with this is that while the legislature in Anguilla may accept this in its desperation, safe and sound Bermuda would just tell the UK to “pound pink sand”.

    The UK could mercenarily offer disaster relief in exchange for changes to financial laws to independent “Commonwealth” nations like SKN. Think for a moment how this would go over in other ‘Commonwealth” countries like Canada or Australia. Expect the same response from Antigua and Barbuda.

  13. Bloke in North Dorset

    Sky news was suggesting that we recolonise these places and station troops there so we can react a bit quicker.

    I can’t see that going down well with the locals, or Treasury.

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