1,000,000,000,000 Euros

 

 

 

1,000,000,000,000 Euros

(one million million) lost annually to tax evasion in EU

mean it’s a taxing time for fairness

 

1 trillion euros ($1.3 trillion) are lost to tax evasion each year in the member countries of the EU, according to a message to the EU by Herman van Rompuy the President of the European Council in April. How can this gigantic rip-off by big business be clawed  back?

As Chancellor George Osborne dreams up ever more draconian ways to punish the poor for the  selfish and immoral actions of the big  banks that created the  current economic crisis, Labour Leader Ed Miliband outlined  his “fairness” alternatives in his Five Labour Priorities in response to May’s Queen’s Speech, including:

•A Fair Deal on tax. Alongside implementing Labour’s five point plan for jobs and growth, Labour’s Finance Bill would reverse tax cuts for people earning over £150,000 a year. We would use that money to help pensioners on fixed incomes hit by the “granny tax” and we would restore cuts in tax credits which have hit families.

It is also Big Business – such as US companies Google, Amazon and Facebook-  that  is making the crisis worse  by their massive avoidance of paying taxes on profits they earn from trading in the UK.

Ed Miliband recently rightly said: “People will be shocked by the evidence that Google is going to extraordinary lengths to avoid paying their fair share of tax…..It is evidence of a culture of corporate irresponsibility among certain firms which is totally unacceptable.”

He added “This It comes at a time when ordinary families are seeing services cut, their taxes rising and so many businesses are struggling to make ends meet and are actually doing the right thing and paying their fair share of taxes.“As so often under this Government, I think it is evidence of one rule for those at the top and another rule for everyone else.

Meanwhile, in the EU, the Nordic nations are leading the  campaign to change the taxation regime to make it  much fairer for the  average citizen. Seven Nordic countries ( Denmark, Finland, Iceland, Norway, Sweden, Greenland and the Faroe Islands)  have a head start on the rest of the EU as they have already secured bilateral information exchange agreements with 40 tax havens.

Cameron and Osborne were  under political pressure to open up tax  havens used  by British companies in such off shore havens as The Channel Islands, Isle of Man, the Cayman Islands in the Caribbean, The Bahamas, and  Luxembourg  and Lichtenstein  in Europe, at the meeting of the European Council of Ministers in Brussels on 22 May

Even in Sweden, a country of only 9 million people, some $7 billion that should go to the government for spending on social programme each year are lost through tax evasion.

The Tax Justice Network estimates that since the 1970s $21-$32 trillion of unrecorded offshore wealth was channelled through tax havens.

 

Robin Hood Tax

One way  money can be clawed  back  from our greedy  banks is to  implement  a redistributive tax  named  after the famous  Robin Hood, the progressive highwayman who  appropriated ill-gotten gains form the rich barons, to help the poor workers and underemployed of Sherwood Forest in Nottingham during the middle ages.

A Robin Hood tax on the financial sector has the power to raise £hundreds of billions every year globally. It could give a vital boost to the heath service, our schools, and the fight against child poverty and climate change.

Experts have calculated that even a tiny tax on the financial sector can generate £20 billion annually in the UK alone.

In March two years ago Labour MEPs won the support of their international colleagues in their campaign for a Robin Hood tax to ensure that the financial services sector pays its fair share, when the European Parliament adopted a position backing the idea of a Financial Transaction Tax (FTT).

And a few months later, the European Commission proposed draft law for an FTT, backed by Labour’s then  leader in the EP, Arlene McCarthy, who has said "Millions of people have made it clear that they would like to see a Robin Hood Tax that uses a very small levy on financial markets to support good causes both at home and abroad.

The bloated banks can afford it. The tax systems are in place to collect it.  It is an idea for which the time has come. As its backers claim ”Not complicated. Just brilliant!”

EU action

At the most recent monthly meeting of EU finance and budget ministers and in the planning  for  the upcoming G8 meeting of the world’s richest economies, to chaired by the UK next month in Northern Ireland, tax fairness issues  have dominated the agenda, with  tax evasion and tax fraud  at the top.

But we still seem far from progress, as Conservative ministers like Cameron  and Osborne, don’t want to upset their friends in Big  Business and Big Banks but the outcomes were minimal. They are often pay masters for the Tory party too.

And two EU tax havens, Austria and Luxembourg, are also obstructing progress, while Socialist-led France has expressed support for developing EU criteria and a blacklist of “non-cooperative jurisdictions”.

British action

As well as action in the EU, we need to  take action at home, to ensure Welsh taxpayers are getting a fair deal, and the tax revenues from big business is fully collected.

Labour MP, and former minister, Michael Meacher last September presented the General Anti-Tax Avoidance Principle Bill  to Parliament in Westminster, which would Introduce a principle that any financial arrangements made by a company or  individual should not have as their primary purpose the avoidance of tax.

It is incredible that such a moral principle needs to be put into law. That says something about the moral basis of some of our Big Banks and Big Businesses