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Apr 112016
 

Let’s be honest – we know that many of the rich were stashing piles of loot into offshore banks before the Panama Papers leaked, and we know that many of the rich are stashing piles of loot into offshore banks after the Panama Papers leaked. So what did we really learn?

Names.

Of course none of those names from the UK are guilty of anything – they all had some “good” reason to have an offshore bank account or company. Varying from needing to get around currency export regulations (that sounds a bit dodgy to me) to buying houses – because of course it is not possible to buy houses in the UK without using an offshore company.

Ninety-five per cent of our work coincidentally consists in selling vehicles to avoid taxes.

Partner of Mossack Fonseca

Hmm … I wonder which statement is more to be trusted – people making public statements that they were not attempting to avoid taxes, or a private statement about their real motives?

There have been suggestions that the ICIJ have been carefully selective about their revelations; specifically to avoid embarrassing “special people”. Well they are right in one sense – the ICIJ is being selective but there is probably no sinister motive involved. They are just digesting 2.6Tbytes of leaked documents which you can be sure takes considerable time to process without undergoing a severe case of digital indigestion.

And of course maximising the impact of the stories to come over possibly months.

As to the source of the data, at this stage it is not clear how the data was leaked. There are several claims :-

  • The company email server was “hacked”. Whilst some of the leaked documents were emails, many were not and whilst some more normal document formats are often found “attached” to emails, database files are very rarely attached to emails. Plus leaking 2.6Tbytes of data from an email server is not entirely stealthy.
  • Various web-based services (WordPress and Drupal have been mentioned) have been claimed to have vulnerabilities which were supposedly used to break in and ex-filtrate the documents. To be honest it seems a bit unlikely that a web-based application would have direct access to all those documents, but perhaps the company didn’t believe in data security (a law firm? with ultra-rich clients including very successful criminals?). Again leaking 2.6Tbytes of data from a web server isn’t exactly the stealthiest of methods.
  • The next method is probably the most boring method. Someone from inside the firm simply drops a backup tape into their jacket on the way out of the building. By far the easiest way of ex-filtrating the data considering the size.

We will probably never know exactly how the data was obtained as the source is doing everything in their power to remain anonymous.

stack-of-coins-p1

Mar 222012
 

You know anyone would think the media isn’t capable of adding up to more than 10 without taking their socks off given all the fuss about the so-called “granny tax”. By which they mean the gradual elimination of the increased tax allowance that older people get once the increased personal allowance reaches that level.

Either the complaint is that pensioners are paying the same level of tax as working people, or that the tax allowance for pensioners is not going to go up by the level of inflation for a couple of years. Neither are exactly catastrophic for pensioners – the poorest pensioners are not going to reach that level of income anyway, and those that will be effected will hardly notice the difference.

After all there is no guarantee that the tax personal allowance will increase by the level of inflation every year … neither the normal personal allowance nor the “bonus” allowances that older people get on top of their personal allowance. And why should older people get a special taxation allowance merely for being older ?

Eliminating that special case will make the taxation system just a little bit simpler – something to be encouraged.

I’m more likely than most to throw rocks at the Tories and their policies, but I don’t see this as being worth picking up a rock for. There’s quite a few other things about the recent budget to get excited about.

Like reducing the income tax rate for the wealthy from 50% to 45%; whilst the Tories are quite possibly right about it not being a great revenue raiser, it sends out the message that the Tories are on the side of the wealthy. Whilst they have also done a bit of tinkering with tax avoidance, and added a top rate of stamp duty (on residential property purchases), reducing the income tax rate for the top earners feels wrong.

So why is the media making more fuss about the non-issue that is the “granny tax” ? Someone more suspicious than me might suspect that the media is deliberately drawing attention away from the income tax issue – just how much do these journalists earn anyway ?

Jan 292009
 

When the economy is well, we constantly hear from businesses about how government should not interfere with business; that anything the private sector does is sacred, and the public sector is at best pathetic. They complain the most about regulation but government support for problematic businesses frequently comes up to. And of course whinge constantly about taxation on business.

Of course any business that needs support from the government to survive is pathetic and probably should fail.

But wait! Come this recession, we are seeing speaking heads from businesses in droves demanding that the government bail their business out. Somehow because there is a recession on, all the traditional rules can be ignored and businesses need support from government.

Sure perhaps we do need to use public money to help out businesses that would otherwise fail. After all reverting to 19th century economics like the Conservatives seems to have done is likely to be far worse. But that does not mean they should get a free ride – we should remind them that businesses usually ask to be left alone, and that goes two ways.

And of course put up taxes on businesses a tad, to pay back the money over the long term. And every time a business complains about high taxes, remind them of these times when government was spending money to help businesses out.

May 262007
 

A bit of an odd mixture, but this all occurred to me when I was waiting 2 minutes at a pedestrian crossing for a chance to cross the road in 10 seconds; at which point I would have to do this all over again.

It occurred to me that most of the cars whizzing past my nose were being driven by people who didn’t pay the local council tax which funds the local roads whereas I do. Seemed a little unfair that they get more time to get across the crossing than I do, when it is my money paying for everything. Don’t get me wrong … whilst I might like the roads to be a bit cheaper, and we should spend more money on public transport, I still think the roads are worth having.

Of course it is not a simple matter where every pedestrian is a tax payer and every motorist is an outside who doesn’t pay the council tax. And motorists will say that their road tax is being used to pay for the roads … which is true for motorways (which I’m not commenting on here), but not the case for local roads.

I just think we need to redress the balance between the pedestrian and the motorist a little more.

Historically we have gone to an enormous amount of effort to keep traffic moving, and it is time to accept that it just isn’t possible with the levels of traffic we can have in today’s cities. And giving pedestrians a bit more priority on the roads is the polite thing to do given that we are helping pay for the roads. We need equal time to cross the roads that motorists have to cross the pedestrian crossings, and we need more pedestrian crossings.

If it takes a motorist 20 minutes to traverse my city rather than 15 minutes, so what? The motorist will still be well ahead of the pedestrian who will take an hour or more for the same journey so they will still be well ahead.

Jan 182007
 

Everyone hates paying taxes. To be honest nothing is going to change that at all, but there are a few things that could be done to improve the situation. At present people want to pay as little tax as possible, whilst having well funded public services. Which is kind of foolish and impossible to achieve; of course there are ways in which to make public services more efficient but that is a whole other rant.

I should point out at this point, that I’m somewhat partial here as my own salary comes indirectly from taxation (and pretty stingy the tax-payers are too), but that is also a whole other rant.

The funny thing is that when you start working, you get a nasty shock when you get your first payslip about how much disappears in the direction of the government and nobody is there to explain what you get for your money. Why not include classes in school about what taxation gets us ?

All that taxation does provide us with useful services which include :-

  • A public health service that anyone can use at no cost or vastly reduced cost.
  • A police service intended to protect us from criminals.
  • Armed forced to defend us from external threats.
  • A social security system to provide us with a safety net in case we cannot earn an income.
  • An education system that educates everyone.

And I dare say I’ve left loads out … I nearly forgot education where I work! But we don’t get told about what we get for our money, we are expected to “just know”. Of course it some ways it is obvious, but why not make it clearer ?

In fact why not make the yearly pay slip (the P60) larger and include rough figures for how much we paid for each service ? If you get something that says you paid £10,000 in tax, of which £1,500 went to pay for Health, etc., we are more likely to be less critical of taxation.

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