USuncutMN says: Tax the corporations! Tax the rich! Stop the cuts, fight for social justice for all. Standing in solidarity with http://www.usuncut.org/ and other Uncutters worldwide. FIGHT for a Foreclosure Moratorium! Foreclosure = homelessness. Resist the American Legislative Exchange Council, Grover Norquist and Citizen's United. #Austerity for the wheeler dealers, NOT the people.



We Are The 99% event

USuncutMN supports #occupyWallStreet, #occupyDC, the XL Pipeline resistance Yes, We, the People, are going to put democracy in all its forms up front and center. Open mic, diversity, nonviolent tactics .. Social media, economic democracy, repeal Citizen's United, single-payer healthcare, State Bank, Operation Feed the Homeless, anti-racism, homophobia, sexISM, war budgetting, lack of transparency, et al. Once we identify who we are and what we've lost, We can move forward.



Monday, April 30, 2012

Manu Chao - Bella Ciao

Morgan Sandquist: Finance in Denial – An Intervention

Morgan Sandquist: Finance in Denial – An Intervention


Morgan Sandquist: Finance in Denial – An Intervention

Yves here. While I applaud the general thrust of this series, I have to take issue with one notion that this essay takes as a given that finance as currently constituted is “core to our economy” and is cautious about the costs and risks of intervention (even though it argues for that course of action).
The case for decisive action is far stronger. The largest financial services firms have perpetrated the biggest transfer of wealth in history via the bailouts. They have gone unpunished for perpetrating the greatest consumer fraud in history, namely, the predatory lending in the subprime phase, the destruction of the integrity of title, and continuing abuses of court procedures. As we wrote in 2010:
More support comes from Andrew Haldane of the Bank of England, who in a March 2010 paper compared the banking industry to the auto industry, in that they both produced pollutants: for cars, exhaust fumes; for bank, systemic risk. While economists were claiming that the losses to the US government on various rescues would be $100 billion (ahem, must have left out Freddie and Fannie in that tally), it ignores the broader costs (unemployment, business failures, reduced government services, particularly at the state and municipal level). His calculation of the world wide costs:
….these losses are multiples of the static costs, lying anywhere between one and five times annual GDP. Put in money terms, that is an output loss equivalent to between $60 trillion and $200 trillion for the world economy and between £1.8 trillion and £7.4 trillion for the UK. As Nobel-prize winning physicist Richard Feynman observed, to call these numbers “astronomical” would be to do astronomy a disservice: there are only hundreds of billions of stars in the galaxy. “Economical” might be a better description.
It is clear that banks would not have deep enough pockets to foot this bill. Assuming that a crisis occurs every 20 years, the systemic levy needed to recoup these crisis costs would be in excess of $1.5 trillion per year. The total market capitalisation of the largest global banks is currently only around $1.2 trillion. Fully internalising the output costs of financial crises would risk putting banks on the same trajectory as the dinosaurs, with the levy playing the role of the meteorite.
Yves here. So a banking industry that creates global crises is negative value added from a societal standpoint. It is purely extractive. Even though we have described its activities as looting (as in paying themselves so much that they bankrupt the business), the wider consequences are vastly worse than in textbook looting.
Yet its incumbents tout their ‘talent” and insist on their right to mind-numbing pay because their services are allegedly so valuable to the economy.
This means the case for intervention is even more clear cut than this essay suggests.
This is the third part in a four-part essay by Morgan Sandquist, a member of the Occupy Wall Street Alternative Banking Group. The previous post are In Denial and The Addiction. Cross posted from mathbabe
What are we to do with our banking industry, sitting there at the kitchen table in its underwear, drumming on the table with one hand and scratching its increasingly coarse chin with the other in an impossibly syncopated rhythm, letting fly a dizzying stream of assurances, justifications, and accusations, and generally spoiling for a fight that can only be avoided by complete and enthusiastic agreement with a narrative that can be very difficult to follow, let alone make sense of?
Because this is our kitchen too, we have our legal and moral rights. We would be well within those rights to respond to its nonsense with far more coherent and sweeping condemnations of our own. Throwing the bum out in its underwear without so much as a cup of coffee, taking the children, and keeping our share of whatever might be left could certainly be justified.
Though the sense of release offered by those responses is tempting, they’re not likely to be of any practical use. We can’t win an argument with an irrational person, and our share of an insolvent industry is likely to be very little–certainly not enough to feed the children. We have to recognize the hard truth of our implication in the banking industry and its addiction.
This doesn’t mean that we’re responsible for the addiction and its consequences, or that we can make the choice not to continue that addiction on our own, but it does mean that the problem won’t be constructively resolved without our efforts. To the extent that denial is about obscuring the connection between decisions and results, the most effective means of undermining denial is to clarify that connection, and the process of doing that is intervention.
Whether or not its participants are thinking in these terms, Occupy Wall Street, to the extent that it can coherently be referred to as an entity, is in many respects functioning as an intervention into the banking industry’s increasingly untenable addiction to money and debt.
The movement’s core values of transparency, sustainability, and nonviolence reflect the clarity, patience, and compassion needed for an effective intervention.
This is not to say that all of the efforts directed at banks by the movement have been magnanimous or constructive. We have to remember the terrible suffering that has been inflicted upon so many and offer that clarity, patience, and compassion not just to the addict, but also to ourselves as intervenors and to everyone who has been affected by the banking industry.
On the whole, I have been deeply heartened by how this movement has evolved over the last seven months, and though intervention isn’t the easiest or most promising process, it’s one I recognize and know can work (in stark contrast to political revolution). From the beginning, the Occupiers have shown a fearless, poignant spontaneity that’s available only beyond the addiction-centered dynamic of denial, and the banking industry, its enablers, and others still within that dynamic of denial (which, to be fair, has included most of us at one point or another) have responded as would be expected.
The determination and wisdom granted to those who see more clearly is profoundly threatening to those seeking to maintain denial, though of course they wouldn’t be able to say quite why.
The initial objections from the press that Occupy Wall Street was making no demands could be seen as an enabler’s yearning for symptoms that can be isolated and addressed, without admitting to or addressing the addiction from which they arise. To keep calmly and patiently pointing to that underlying cause is simultaneously incomprehensible and maddening to those trapped within denial, and their responses have run the gamut from smug certainty that nothing could possibly be wrong to whistling past the graveyard to ill-conceived and unjustified violence. And the Occupiers’ patience, diligence, and good nature in the face of that decidedly ill will is as textbook an illustration of the process of intervention as we’re likely to see.
It would be all too easy to remain passive in the face of our increasingly delusional, erratic, and combative banking industry. Surely there must be a more palatable alternative to undermining the continued functioning of the complex and highly evolved process that is the core of our economy.
If we force it to rehabilitate, what will happen during that process? Will our economy collapse? When its rehabilitation is complete, will the banking industry be able to function as well as it once did? Or as the banking industry’s enablers would have it: Any attempts to regulate the banking industry will only harm it, making it less effective to all of our detriment; these banks are too important a part of our economy to be allowed to fail; and bankers must continue to receive bonuses for banks to remain competitive.
It’s true that the banking industry has seized upon the process that’s the basis of our economic survival, and that attempts to address the problems of the banking industry cannot be undertaken lightly. But it’s also true that the banking industry has perverted that process, and that attempts to address that won’t prevent our return to some fantasy of efficiency and plenty, though they might prevent the otherwise inevitable, tragic end of the current trajectory left unchecked.
Whatever happens while the banking industry is rehabilitated is unlikely to be worse than what will happen as it continues to indulge in its addiction unaddressed, and it’s unlikely to function any worse upon the completion of its rehabilitation than it is now. As Charles Eisenstein puts it, “any efforts we make today to ‘raise bottom’ for our collectively addicted civilization–any efforts we make to protect or reclaim social, natural, or spiritual capital–will both hasten and ameliorate the crisis.”
Once an addict has reached the point in his or her descent where an intervention is necessary, there’s no realistic possibility of a return to some pre-addiction Golden Age. The apparent paradox that an addict’s life must be destroyed to save it is, stated in those terms, false. The addict’s life only appears to be as yet undestroyed through the lens of denial, and a future life without substance abuse or consequences is an illusion.
But the more gently stated paradox that intervention will cause the addict suffering in the short term to help him or her in the long term is accurate. There are, however, deeper, more intractable paradoxes, and they are those of the psychology of addiction. The process of intervention is often crucial to an addict’s entering rehab and beginning recovery, yet only the addict can decide to enter rehab.
The addict must understand the damage he or she has done in order to stop using but mustn’t succumb to shame, which would simply cause a retreat to the substance. The addict must admit that he or she is powerless over the substance and that life has become unmanageable, but mustn’t surrender to hopelessness and despair, which would sap the considerable motivation needed in the process of recovery. An intervenor must do something, but there’s nothing that can be done. There is no single act, no grand gesture or magic bullet, that can accomplish anything meaningful or lasting. Intervention is a long, unpredictable process requiring superhuman compassion and patience of everyone involved. Prior training or practice in commitment to a process without regard to the outcome of that process is invaluable.
Yes, we can answer the banking industry’s petulant invective in kind, but that won’t fix the problem; the industry will become more defensive and reckless, and we probably wouldn’t end up feeling any better anyway. Our encyclopedic harangue would be cogent, compelling, and convince our friends in the retelling, but no matter how loud we shout it over the banking industry’s coffee cup into that sullen, bloodshot face, it will simply be brushed aside with the wave of a shaky hand and a hoarse grumble, or, worse, it will hit home, and rattled, the banking industry will glare at us and we’ll know that tonight will bring another nihilistic binge of leverage and derivatives, and maybe this time there will be no tomorrow morning. The industry will tell us that we don’t understand, that the pressure it’s under is unimaginable, that life is grim, and that even though it can’t fix that, it should be thanked for what it has accomplished, and that that’s the best it can do. What more could we want? What more could it do? And we can only sigh and shake our head, because we know the simple, honest answer would just fall on deaf ears, and even if it were understood and accepted, the broken soul sitting across the table is in no shape to do anything constructive.
The confrontations shown on television or in the movies, or that you have perhaps participated in yourself, are just part of the larger process of intervention, but they illustrate the themes that inform that larger process. Those themes can best be summarized as connection: the connection between the addict’s choices and the suffering of the addict and those who are around him or her; the connection between addiction and the addict’s choices; and the unbreakable, always available connection between the addict and the intervenors.
Where denial seeks to divide and conquer, intervention seeks to unify and transcend. Intervention doesn’t respond to denial on denial’s terms, but rather reflects reality as it is. It doesn’t engage in the petty distractions of accusations and recriminations, nor does it seek escape from the addict and his or her problems. Intervention shows the addict his or her choices as they’re made, how those choices are determined by addiction, and the consequences that follow from those choices, but it also shows the redemption that’s always available despite those choices and their consequences.
Where denial is deceptive, impulsive, and selfish, intervention is clear, patient, and compassionate. Intervention finally presents the addict with an unavoidable choice between continued deluded suffering and real, sustainable sanity. The addict may or may not respond positively to that choice, but it must continually be presented on the same terms until the addict surrenders his or her denial.
And to induce that surrender, it’s crucial that the addict be offered an alternative to his or her addiction, whether it’s formal rehab, a twelve-step program, methadone, or a recovery dog. It’s important to recognize that even before the addict became physically or emotionally dependent on the substance, that substance met an otherwise unmet need, and leaving it unmet will lead only to relapse.

www.spinwatch.org/images/stories/SpinWatch_Goldman Sachs_March2011.pdf

www.spinwatch.org/images/stories/SpinWatch_Goldman Sachs_March2011.pdf

Lessons from Charles Koch's Father

taxjustice network

taxjustice network


TAX HAVENS CAUSE POVERTY

The Tax Justice Network promotes transparency in international finance and opposes secrecy. We support a level playing field on tax and we oppose loopholes and distortions in tax and regulation, and the abuses that flow from them. We promote tax compliance and we oppose tax evasion, tax avoidance, and all the mechanisms that enable owners and controllers of wealth to escape their responsibilities to the societies on which they and their wealth depend. Tax havens, or secrecy jurisdictions as we prefer to call them, lie at the centre of our concerns, and we oppose them.
Take a look at our core themes:
These issues affect rich and poor countries, and, like the fight against corruption, our approach does not fit easily into either of the old political categories of left and right. We do not argue generally for high or low taxes (that is for voters to decide) but we note the often better human development outcomes in higher-tax countries and oppose the demonisation of tax that is fashionable in some circles. What we do support is progressive and equitable taxation, which is what voters around the world have chosen. We wish to see nations’ sovereignty restored, so that electorates are given back the power to get the tax systems they vote for. To this end we advocate much stronger co-operation between states on tax and regulation. This will help us address the growing tension between global integration and a shortage of credible international governance.
For more details, see "Resources," to the left of this page.

Who are we? 

The Tax Justice Network is led by economists, tax and financial professionals, accountants, lawyers, academics and writers, and we are driven by original research and ideas. We are supported by a growing community of individuals, economists, faith groups, non-governmental organisations, academics, lawyers, trade unions -- and many others. (Read more)

Why tax and tax havens?

Tax is the foundation of good government and a key to the wealth or poverty of nations. Yet it is under attack. These places allow big companies and wealthy individuals to benefit from the onshore benefits of tax – like good infrastructure, education and the rule of law – while using the offshore world to escape their responsibilities to pay for it. The rest of us shoulder the burden.
Tax havens offer not only low or zero taxes, but something broader. What they do is to provide facilities for people or entities to get around the rules, laws and regulations of other jurisdictions, using secrecy as their prime tool. We therefore often prefer the term "secrecy jurisdiction" instead of the more popular "tax haven." 
The corrupted international infrastructure allowing élites to escape tax and regulation is also widely used by criminals and terrorists. As a result, tax havens are heightening inequality and poverty, corroding democracy, distorting markets, undermining financial and other regulation and curbing economic growth, accelerating capital flight from poor countries, and promoting corruption and crime around the world.
The offshore system is a blind spot in international economics and in our understanding of the world. The issues are multi-faceted, and tax havens are steeped in secrecy and complexity – which helps explain why so few people have woken up to the scandal of offshore, and why civil society has been almost silent on international taxation for so long. We seek to supply expertise and analysis to help open tax havens up to proper scrutiny at last, and to make the issues understandable by all.
The fight against tax havens is one of the great challenges of our age. Our approach challenges basic tenets of traditional economic theory and opens new fields of analysis on a diverse array of important issues such as foreign aid, capital flight, corruption, climate change, corporate responsibility, political governance, hedge funds, inequality, morality – and much more. (Read more in Part II of our Manifesto for Tax Justice)

How big is the problem, and what is its nature?

Assets held offshore, beyond the reach of effective taxation, are equal to about a third of total global assets. Over half of all world trade passes through tax havens. Developing countries lose revenues far greater than annual aid flows.We estimate that the amount of funds held offshore by individuals is about $11.5 trillion – with a resulting annual loss of tax revenue on the income from these assets of about 250 billion dollars. This is five times what the World Bank estimated in 2002 was needed to address the UN Millenium Development Goal of halving world poverty by 2015. This much money could also pay to transform the world’s energy infrastructure to tackle climate change. In 2007 the World Bank has endorsed estimates by Global Financial Integrity (GFI) that the cross-border flow of the global proceeds from criminal activities, corruption, and tax evasion at US$1-1.6 trillion per year, half from developing and transitional economies. In 2009 GFI's updated researchestimated that the annual cross-border flows from developing countries alone amounts to approximately US$850 billion - US$1.1 trillion per year.
Offshore finance is not only based in islands and small states: `offshore’ has become an insidious growth within the entire global system of finance. The largest financial centres such as London and New York, and countries like Switzerland and Singapore, offer secrecy and other special advantages to attract foreign capital flows. As corrupt dictators and other élites strip their countries’ financial assets and relocate them to these financial centres, developing countries’ economies are deprived of local investment capital and their governments are denied desperately needed tax revenues. This helps capital flow not from capital-rich countries to poor ones, as traditional economic theories might predict, but, perversely, in the other direction.
Countries that lose tax revenues become more dependent on foreign aid. Recent research has shown, for example, that sub-Saharan Africa is a net creditor to the rest of the world in the sense that external assets, measured by the stock of capital flight, exceed external liabilities, as measured by the stock of external debt. The difference is that while the assets are in private hands, the liabilities are the public debts of African governments and their people. (Read more)
Globalisation and international trade and finance have got a bad name of late. Each brings opportunities, and risks. We must now start to address seriously what may be the biggest risk of all: tax abuse, and tax havens and everything they stand for.

What can you do?

Our resources are small, yet the huge, well-funded public and private interests that oppose us have no answers to the agenda we are setting. Our message is starting to spread fast. Please join us, support us, and engage with the emerging debate.

OUR CORE THEMES 

Our core themes are briefly outlined below. The Resourcessection to the left of this page has more details.  

We support sustainable finance for development 

Tax is the most sustainable source of finance for development. The long-term goal of poor countries must be to replace foreign aid dependency with tax self-sufficiency. Developing nations in Africa, Latin America and elsewhere are especially vulnerable to the offshore world. Action on tax has the potential to deliver gains to poor countries that are orders of magnitude greater than what can be achieved with aid. To meet the Millennium Development Goals, OECD countries have been urged to raise their levels of aid to 0.7 percent of Gross National Income – but this is as nothing when compared to potential tax revenues: in some rich countries, tax constitutes over 40 percent of GDP.  
Tax is the link between state and citizen, and tax revenues are the lifeblood of the social contract. The very act of taxation has profoundly beneficial effects in fostering better and more accountable government. It is astonishing that so many members of the aid community have ignored tax for so long. Action on international taxation is, quite simply, the key to lifting hundreds of millions of people out of poverty. Read More

We support international co-operation on tax, regulation and crime

The tax policies of one country can seriously harm the citizens of another. In the 19th and 20th Centuries, rich nations agreed that a balance should be struck between corporations, governments and societies. Tax and regulation lay at the heart of these democratic contracts, and it was feasible to set up coherent systems under single nation states. But these grand bargains began to unravel in the 1920s, as multinational companies began to emerge as a force in world markets and exploit cross-border loopholes to reduce their taxes. This accelerated in the 1970s, as financial liberalisation increasingly allowed companies to shop around for jurisdictions to escape tax and regulation. Tax havens are now intensifying competition between jurisdictions on tax and regulation in a beggar-my-neighbour scramble to attract international capital, undermining already weak regulation of public companies and stock exchanges. International efforts to tackle this harmful “tax competition” are, to date, feeble, and the amount of wealth offshore is growing fast.
Insular, nationally-based approaches cannot do justice to these challenges. From the perspective of individual countries, it may be relatively easy to argue in favour of cracking down on outflows of money into tax havens, but it is far harder to challenge the inflows. Only a global approach will do: this means co-operation between nations on tax havens. Far from weakening state sovereignty, as is sometimes suggested, stronger tax cooperation is the best way to strengthen national tax systems in this age of globally mobile capital. Read More

We oppose tax havens and offshore finance

Tax havens and offshore financial centres have created an interface between the illicit and licit economies, corrupting national tax regimes and onshore regulation. The result is a shift of the tax burden away from capital and onto labour, and a dramatic rise in income and wealth inequality, as well as the corruption of democracies around the world as élites escape their responsibilities with impunity. Supporters of tax havens point to the wealth enjoyed by such tax havens as Switzerland or the Cayman Islands to bolster their arguments. This is like pointing to the wealth of a corrupt politician and arguing that corruption is therefore a good thing: tax havens effectively appropriate other countries' taxes for themselves.
We recognise that some small island economies depend heavily on hosting harmful tax practices, and may lose investment and economic growth from efforts to tackle the abuses. But the harm these activities cause are orders of magnitudes greater than any claimed benefits. We propose multilateral support for these countries to assist with re-structuring as part of efforts to clean up the tax haven scandal. In any case, the biggest culprits are the big financial centres such as in Britain, the United States and Switzerland. Read More

We support transparency and we oppose corruption

The Tax Justice Network supports transparency and opposes secrecy in international finance. We want companies to be made more open about their financial affairs and to publish data on every country where they operate. We want the finances of wealthy individuals to be visible to their tax authorities, so they pay their fair share of tax. Markets work better, and companies are more accountable, in an environment of transparency. Secrecy hinders criminal investigation and fosters criminality and corruption such as insider trading, market rigging, tax evasion, fraud, embezzlement, bribery, the illicit funding of political parties – and much more. We want to expand the commonly accepted definitions of corruption so that they no longer focus only on narrow aspects of the problem such as bribery. We must bring tax, tax avoidance and tax evasion decisively into the corruption debate.
Corruption, crime and corporate abuse have a demand side (such as the theft of public assets by a politician) and a supply side – the provision of corruption services, like the concealment of a politician’s stolen assets offshore. Tax havens and associated activities stimulate the demand side – so they are a central part of the corruption problem.  Eva Joly, an investigating magistrate who broke open the “Elf Affair” in France (Europe’s biggest corruption investigation since the Second World War) was furious about how tax havens stonewalled her probes. She compared magistrates to sheriffs in the spaghetti westerns who watch the bandits celebrate on the other side of the Rio Grande. “They taunt us – and there is nothing we can do.” As she says, the fight against tax havens must be “Phase Two” in the international fight against corruption. Read More

We support a level playing field in competitive markets

We support simplicity and a level playing field on tax. Complexity and loopholes provide a windfall for a pinstripe infrastructure of lawyers, bankers and accountants and distort markets, undermining market competition, mis-directing investment, and rewarding economic free-riders. These distortions favour  multinational companies over national ones; they promote big companies over small, and they hinder start-up companies in the face of established vested interests. New forms of finance that have become prominent recently, such as hedge funds and private equity companies, greatly benefit from lower tax rates, lack of transparency and minimal accountability which provide them with competitive advantages over their peers that have nothing to do with efficiency or innovation in the real world, or with the quality or price of what they offer. Companies wishing to act in an ethical manner find themselves at a competitive disadvantage vis à vis their more irresponsible competitors. Read More

We favour progressive and equitable taxation

We support progressive taxation, founded on the basic principle that tax should be based on ability to pay -  that is, the wealthy should pay higher rates of tax. The principle of progressive taxation has been supported almost unanimously by democratic choices in countries around the world – and we support those choices. To advocate progressive taxation is to oppose regressive tax systems where the poorer sections of society pay a higher share of their income. Financing public goods, according to voters’ wishes and ability to pay, mitigates inequality, which is one of the greatest political challenges facing the world today. 
Tax systems should also be comprehensive, containing layers of different taxes such as income tax, corporation tax, enviromental taxes, inheritance taxes, customs duties and so on. Different taxes have different functions, and tax systems should contain an appropriate mix of them all. Read More

We support corporate responsibility and accountability

Tax is the forgotten element in the corporate social responsibility debate – and probably the most important. We believe that corporate responsibility starts with paying tax.
We oppose a financial and legalistic approach to tax, which focuses exclusively on the boundary between what is legal (tax avoidance) and what is illegal (tax evasion.) Instead we favour an accountability-driven approach, differentiating between what is responsible, and what is not. A responsible approach sees tax not as a cost to a company to be avoided, but like a dividend: a distribution out of profits to all stakeholders. Companies do not make profit merely by using investors' capital. They also use the societies in which they operate -- whether the physical infrastructure provided by the state, the people the state has educated, or the legal infrastructure that allows companies to protect their rights. Tax is the return due on this investment by society from which companies benefit.
We suppport greater transparency in corporate reporting. We want to see corporate tax policies brought firmly and transparently into wider governance frameworks such as business principles and corporate values. We also support intervention to protect company directors who wish to behave in an ethical manner from being undermined by predatory actors who thrive on abuse. Read more

We favour tax compliance and a culture of responsbility

Tax compliance means paying the right tax in the right place at the right time. We want to see the restoration of a culture of tax compliance among individuals, corporations, tax professionals, and governments, and an ethical approach to tax. They should follow not only the letter of the law, but the spirit of the law, with respect to their tax affairs.
Both tax evasion and tax avoidance are anti-social and equally harmful. Tax avoidance may be the more so, because it is so insidious. Highly paid professionals spend their lives devising ingenious schemes to reduce or eliminate the tax liability of wealthy people, and they have set themselves up as the “experts” on international taxation, developing and propagating a world view that sees these kinds of abuses as acceptable. Huge, well-resourced vested interests support them and have skewered international efforts to address the problems. Politicians, economists and civil society groups, perhaps daunted by the complexity of the issues or unable to see or measure what is happening in the secret world of offshore, too rarely challenge this world view. Meanwhile, tax authorities rarely have the staff or time to combat the enormous resources and wiles of the tax avoidance industry. The resulting mouse-and-cat game – besides its effect on corrupting democracy – is enormously wasteful. 
It is time for change. Our code of conduct on taxation outlines our approach. Civil society groups, economists, journalists, and ordinary people need to rouse themselves and make this one of the great political struggles of this young century.