Links - Dec 17
Large Bank, Hedge Fund Bundle Small Tax Debts Into Private Investments - Center for Public Integrity
Property owners suddenly finding themselves in debt to the new Wall Street taxman. Barely more than a year after a taxpayer bailout of major financial institutions, Bank of America and the hedge fund Fortress Investment Group spotted a fresh money-making opportunity – collecting the tax debts of tens of thousands of people. They can add interest charges and fees and bundle the debts as securities for investors. When bidding, They didn’t use their names but donned multiple other identities. The bonds were sold privately, so there’s no public record indicating who purchased them, the prices paid, or the anticipated return. Government officials often don’t even know who their new tax collection partners are. Good Grief.
Wall St Whitewash – Paul Krugman
We have learned what happens when an ideology backed by vast wealth and immense power confronts inconvenient facts. And the answer is, the facts lose.
Liechtenstein Tax Evasion Settled for $67 Million - Reuters
A German prosecutor says a tax evasion case against Liechtenstein's state-owned LGT bank has been settled with a fine of euro50 million ($67 million). This was a lost opportunity. They should have gone for a full prosecution, then, if successful, the bank should have been shut out of Europe and its officials arrested. Instead, it is still firmly in place.
Financial Times falls for PWC’s taxwash - FT
The FT headline is “UK Financial services’ tax bill tumbles” and it claims that "Banks and other financial services companies paid about £53bn in taxes during the year ended in March." This is false. The real story is that the corporations paid £5.7bn in corporation tax receipts, a tenth of the headline figure. They did pay that; the rest is taxwash, derived from PWC's public-relations exercise (report is here) known as its Total Tax Contribution, under which corporations claim that taxes paid by others are their own tax payments. Read more on this here. Still, it's interesting to note that Corporation tax receipts from the sector have suffered the biggest hit, falling 54 per cent over the past three years. Many of the companies have corporation tax losses that can offset their tax bills; more than two-thirds of companies reported having tax losses available to carry forward into future years, with more than a third receiving a corporation tax refund for 2010.
A UK manifesto for tax justice - Tax Research
In light of the ongoing tax avoidance protests, Richard Murphy sets out some ideas.
"Why Aren't More Bankers Going To Jail?" - Economist's view.
On the criminalisation of U.S. corporate governance. One reason is that criminal cases are becoming increasingly difficult to win, in light of all the complexity, and the difficulty in obtaining evidence. And there’s nothing that generates financial complexity, or obstructs discovery, like secrecy jurisdictions.
Credit Suisse employees raided in German tax probe - Reuters.
A spokesman for the Duesseldorf prosecutor's office on Thursday said four employees of Credit Suisse are being probed on suspicion of aiding tax evasion. Perhaps that’s more like it – but remember this.
U.S. Rep. Doggett: Tax Cut Deal is “Mish-Mash of Rejected Republican Ideas that Cost too Much, Accomplish Too Little - Doggett
Under this misbegotten deal, we will borrow immense amounts from the Chinese and others to provide the wealthiest 1 percent of Americans with a tax cut that is greater than the median income of a Central Texas family for an entire year. Nice quote. See the video here.
New York more unequal than chile.
Far worse than for the U.S. as a whole. Blame the financial sector, puffed up with offshore incentives. And high-income residents pay a smaller share of income in local taxes than residents in the middle of the income structure. Hat tip: Naked Capitalism – see the graph.