With much anticipation and very little fanfare the Australian Taxation Office quietly released information about corporate tax entities with a total income of $100 million or more for the 2013–14 income year and how much tax they paid.
As predicted, the US Federal Reserve has raised interest rates after nearly a decade, which means a slightly better rate of return for savers. Meanwhile in the UK, the Bank of England has kept the benchmark rate at a rock bottom 0.5% for the 81st month in a row. All the while, there are calls from policymakers and politicians for a grand vision for saving. People should take responsibility, the argument goes, for their own welfare.
South Australian Premier Jay Weatherill has argued for broadening the GST base to include all financial services, something also floated by the Financial System Inquiry. The idea has merit, although the complexity of the issue makes assessing the consequences and merits difficult.
Do you remember the 2007-08 banking crash? In the build up to it, UK bankers made vast profits and their executives collected big bonuses. After the crash, taxpayers bailed them out, which led to increased government borrowing. We have all been suffering a never-ending programme of austerity ever since.
One of the 17 presidential candidates recently said, “I can write a tax code in three pages.” Carly Fiorina is not alone among her fellow 2016 presidential contenders in advocating tax reform and simplification of the tax code. However, none is quite so ambitious.
I suppose that theoretically one could write a tax code on three sheets of paper that would raise enough revenue to fund the US government. Let us consider that challenge for a moment by measuring a baseline first. Then we can consider the issues of simplification.
In August, the Financial Times reported that 11 Chinese shadow banks had written an open letter to the top party official in Hebei (河北) province asking for a bailout. Soon afterwards, Foreign Policy magazine ran a story headlined, “Shadow banking is killing China’s stock markets.” In addition, just days ago, the Wall Street Journal reported that Chinese banks are “looking to shadow banking for growth,” which is contributing to new risks.
Last month, England became the latest government – and last among members of the UK – to pass a policy to combat the recent rise in the use of disposable plastic shopping bags, in its case a five-pence charge for each one.
While English newspapers warned that the new policy would create chaos, England is by no means the first to consider such a controversial policy. Several countries across the world and local governments have taken steps to address the environmental consequences of increased plastic bag use through regulation.
Companies such as Apple, Starbucks, and Amazon are well known for legally using international law to their advantage when it comes to tax. Now a small Welsh town is mimicking their tactics. Independent traders in Crickhowell are moving their businesses “offshore” to avoid paying tax.
On Thursday, Australia and Germany signed a new tax treaty, seen by many as the first step towards growing trade and investment between the two European nations. There is a need for greater closeness with regard to the tax systems of these nations in order to help prevent rampant multinational tax evasion.
The European Network on Debt and Development (also known as “Eurodad”), a network of NGOs, has issued a recent report identifying European nations that have served as havens for tax evasion and money laundering. According to the report, Germany, Luxembourg, and Spain are among the most egregious offenders. By turning a blind eye, they support “an unjust global tax system.” The report went on to say that these nations “offer a diverse menu of options for concealing ownership and laundering money.”
