Office cleaners to the rescue
But who are these ordinary people? As if it needs pointing out, the Economist, not so very long after being the cheerleader for tax havens, must be feeling quite sheepish these days. Indeed, the magazine sums up the problem quite nicely.
"Because governments are limited in their ability to tax the mobile, they will tax the static. As noted above, property is already highly taxed in Britain and America (and may be years away from another boom). So consumption taxes are the more likely answer. They are hard to avoid and fairly stable, since spending patterns do not change sharply from year to year. But they tend to fall more heavily on the poor than the rich.
A crisis created by investment bankers will be paid for by shop assistants and office cleaners."
Which brings us to a question. Where are the trade unions in all of this?
They are starting to engage, but there is a long way to go. When the Economist says "governments are limited in their ability to tax the mobile" they are talking, to a very large degree about the secrecy jurisdictions (and this includes London) and the interlinked processes of tax competition.
Now there is patchy interest so far from the Unions- the Trades Union Congress in Britain was probably one of the earliest to engage in this, and the Put People First coalition which is seized of these issues has a small trade union component in it. And we note that the April 2009 London Declaration of a worldwide grouping of trade unions did contain this right-on-the-money statement:
End tax and regulatory havens and create new international taxation mechanisms. G20 Leaders must agree on international cooperation measures so as to bring tax havens, offshore financial centres (OFCs) and bank secrecy jurisdictions – including but not limited to the 38 territories on the OECD watch list – in line with international standards. They must also act to stop the ‘race to the bottom’ between tax jurisdictions, which is eroding the tax revenue source of many countries. Governments should develop a package of sanctions to protect their tax base, including investment restrictions for institutional investors and higher penalties for tax crimes."
But this issue is such a no-brainer for the trade unions, that we hope and expect that now the touchpaper is lit, this will build into a much, much bigger global movement.