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| NOT DEAD YET |
I arise from four days laid in my sick bed, struck down by flu or simply by advancing age, to comment on reports that the British tax-collectors, HMRC, have recently published lists of local small businesses who are not paying what they owe. Media reports say these include plumbers, pubs, hauliers and shopkeepers.
While we can only applaud the innovative use of naming and shaming to reduce collection costs, it has little effect on national economies whether a local haulier hangs on to $100,000 and uses it to pay his diesel bills, but manages to stay in business and employ some drivers, or if the local tax-collector gets the money, hands it to the Treasury and uses it to pay the pensions of meritorious civil-servants who retired at fifty-five - and, we all sincerely hope, will live in good health and on full pension until they are ninety-five. Either way, the money circulates within the source-nation and lubricates the economy.
What does make a huge difference to national economies is claw-back of tax and capital from offshore.
When Multinational Rippers Inc, sells gadgets or services to our consumers who part with their after-tax earnings, on our high streets, and makes $2 billion profits every year; to evade $400 million in tax they create false invoices from their false tax-haven companies for the whole $2 billion; the nice, friendly IRS or HMRC or equivalent agency grant tax-relief on the clearly fraudulent claims, losing $400 million in tax collections; the friendly auditors (the Big 4) pompously approve the false accounts; and Multinational Rippers Inc pay the invoices, via the Big Banks - siphoning out $2 billion in liquidity. $21 trillion (70 million jobs) has been gouged out of OECD countries - and it grows by $1 trillion a year. This way, the money leaves the economy, is frozen in tax-havens and sucks out all the liquidity - until all the economies die.
Russia reports they lose 2.5% of their GDP to illegal tax-havens siphons. My calculations show that the OECD countries have lost 1% of their GDP for the last 30 years, which is sitting in tax-havens. We need it badly in our economies. Are the worlds' tax collectors too timid to reverse the past tax-relief granted on funny-money, false accounting invoices and contracts, and claw it back?
It is probably best for timid tax men to beat-up the defenseless self-employed. Hit the little guys who can't hit back. "What $21 trillion, Where?"
(I now retire to my uneasy resting place and original soil. But - I'll be back!)
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