imc indymedia

Los Angeles Indymedia : Activist News

white themeblack themered themetheme help
About Us Contact Us Calendar Publish RSS
Features
latest news
best of news
syndication
commentary


KILLRADIO

VozMob

ABCF LA

A-Infos Radio

Indymedia On Air

Dope-X-Resistance-LA List

LAAMN List




IMC Network:

Original Cities

www.indymedia.org africa: ambazonia canarias estrecho / madiaq kenya nigeria south africa canada: hamilton london, ontario maritimes montreal ontario ottawa quebec thunder bay vancouver victoria windsor winnipeg east asia: burma jakarta japan korea manila qc europe: abruzzo alacant andorra antwerpen armenia athens austria barcelona belarus belgium belgrade bristol brussels bulgaria calabria croatia cyprus emilia-romagna estrecho / madiaq euskal herria galiza germany grenoble hungary ireland istanbul italy la plana liege liguria lille linksunten lombardia london madrid malta marseille nantes napoli netherlands nice northern england norway oost-vlaanderen paris/Île-de-france patras piemonte poland portugal roma romania russia saint-petersburg scotland sverige switzerland thessaloniki torun toscana toulouse ukraine united kingdom valencia latin america: argentina bolivia chiapas chile chile sur cmi brasil colombia ecuador mexico peru puerto rico qollasuyu rosario santiago tijuana uruguay valparaiso venezuela venezuela oceania: adelaide aotearoa brisbane burma darwin jakarta manila melbourne perth qc sydney south asia: india mumbai united states: arizona arkansas asheville atlanta austin baltimore big muddy binghamton boston buffalo charlottesville chicago cleveland colorado columbus dc hawaii houston hudson mohawk kansas city la madison maine miami michigan milwaukee minneapolis/st. paul new hampshire new jersey new mexico new orleans north carolina north texas nyc oklahoma philadelphia pittsburgh portland richmond rochester rogue valley saint louis san diego san francisco san francisco bay area santa barbara santa cruz, ca sarasota seattle tampa bay tennessee urbana-champaign vermont western mass worcester west asia: armenia beirut israel palestine process: fbi/legal updates mailing lists process & imc docs tech volunteer projects: print radio satellite tv video regions: oceania united states topics: biotech

Surviving Cities

www.indymedia.org africa: canada: quebec east asia: japan europe: athens barcelona belgium bristol brussels cyprus germany grenoble ireland istanbul lille linksunten nantes netherlands norway portugal united kingdom latin america: argentina cmi brasil rosario oceania: aotearoa united states: austin big muddy binghamton boston chicago columbus la michigan nyc portland rochester saint louis san diego san francisco bay area santa cruz, ca tennessee urbana-champaign worcester west asia: palestine process: fbi/legal updates process & imc docs projects: radio satellite tv
printable version - js reader version - view hidden posts - tags and related articles

Tax Avoidance: Drastic Consequences for the Public

by Philipp Gerhartinger Sunday, Jul. 02, 2017 at 5:45 PM
marc1seed@yahoo.com

Taxes are the most important foundation of all government activities and public services. Corporate economic activity and profits cannot be clearly assigned to individual nation states anymore. Founding offshore centers is child's play Tax avoidance and tax fraud lead to revenue crisis

TAX AVOIDANCE: MYRIAD PRACTICES WITH DRASTIC CONSEQUENCES FOR THE GENERAL PUBLIC



By Philipp Gerhartinger



[This blog-article published on November 6, 2014, is translated from the German on the Internet, http://blog.arbeit-wirtschaft.at.]



Taxes are the most important foundation of all governmental activities and public services. Tax sovereignty is the heart of nation-state sovereignty. Multinational corporations face many national regulations. Their economic activity and profits cannot be clearly assigned to individual nation-states anymore.



GAPS AND LOOPHOLES



Many gaps and loopholes arose at the interface of national tax laws in the course of time encouraged by the increasing globalization. This enabled economic actors active worldwide to influence, plan, and minimize their global tax liabilities – without regard to the accompanying consequences.



Evading taxes becomes problematic when service and return favor are uncoupled, when for example real value creation and tax payment in a country are no longer plausibly related, when states do not receive any return favor or any proper return favor for providing the infrastructure with all its facets (developed industrial- and commercial areas, transportation connections, trained workers and legal security). Businesses are helped by these public services as a basis for their economic activity. The ones who suffer are the tax-paying workers, small- and medium-size enterprises and consumers who must compensate for the tax shortfall in the countries where the revenue is earned. These sufferers are disproportionately affected by cuts in state spending (and have only marginal possibilities for altering their own tax liability) and must struggle with unfair competitive conditions - in the case of small- and medium-size enterprises.



WHAT IS TAX RESISTANCE?



There is a great multitude of tax optimization practices. Several things are subsumed under the term "tax resistance." Those actions of tax subjects that run counter to the legislators' intentions are essential. All tax-optimizing actions are not illegal. However many that may be legal are not legitimate. In any case, the differentiation of legal "tax avoidance" and illegal "tax evasion" is central.



TAX FRAUD VS. TAX AVOIDANCE



All unlawful forms of tax resistance should be understood as tax evasion. The criminal state of affairs of tax fraud occurs when (financial) authorities are informed incorrectly or incompletely about important fiscal facts or when they are left in ignorance. This mainly concerns private persons or smaller businesses (for example in the case of sales tax fraud).



On the other hand, tax avoidance includes "legally allowed forms of tax resistance through conscious omission of facts or taking advantage of differences between two or more tax systems to lower the tax burden." International corporations have the possibility of shifting their businesses to tax havens through mailbox firms. So corporations redirect their accounting profits to countries where they can pay lower taxes or no taxes and reduce their real profits in the countries where they are gained and would be taxed higher. The simplest way is shifting revenue to low tax countries, for example by awarding credits within corporate structures that increase the revenue from interests in the low tax country. Current regulations on "transfer pricing" between parts of corporations also offer possibilities for shifting profits, particularly when international goods, copyrights, or other goods are involved that are hard to access.



THE FINANCIAL EXTENT



The theme tax avoidance is relatively new on the agendas of the EU and the OECD compared to fighting illegal tax fraud… Tax avoidance is the greater problem although only very meager information exists. Axel Troost (economist with DIE LINKE) says losses through non-taxation of business profits in Germany for example amount to 20-times what the state loses through private tax fraud in tax havens. The data on world trade is also alarming. Two-thirds of border-crossing trade occurs within multinational corporations and more than half of world trade flows – at least on paper – through tax havens.



For a long time, there were only vague estimates on the volume of evaded capital. In 2012, James Henry (ii) presented a robust calculation that financial wealth parked abroad amounted to between and trillion. According to his estimates, the home states of the tax evaders lose up to 0 billion annually in tax revenues.



In his work "Numbers," the economist Gabriel Zucman, a student of the renowned distribution researcher Thomas Piketty, estimated eight percent of private financial wealth (5.8 trillion euros) is in tax havens and 130 billion euros are lost annually in tax revenue. Thus his estimates are lower than those of James Henry. Zucman does not include cash assets, life insurances, and non-financial property assets (for example yachts, works of art, and the like registered offshore). He says these assets are not considerable and his estimate could rise to a maximum of 8 trillion euros.



These two calculations are based on fundamentally different approaches and measure different things. In the calculations of Henry – with foreign bank deposits as his basis -, assets are included that are completely legitimate, for example, business accounts of an Austrian business in Germany necessary for different payments in foreign countries. All of that is not connected with tax fraud. For Zucman, on the other hand, only those parts of foreign wealth are included that actually can be counted as tax fraud – on the basis of the gap between the active and the passive of worldwide asset balances.



Gigantic sums are lost annually through tax fraud. The larger part, business tax avoidance (for example, through profit-shifting), is not even included here although it amounts to many times more. In the European Union, the commissioner Algirdas Semeta said 1 trillion euros are lost annually in the EU through tax fraud and tax avoidance.



HOW THE SYSTEM FUNCTIONS



The offshore world is a "shrewd and coordinated system in which every island and every insignificant small state have its specific partial functions, where every jurisdiction creates the legal framework for very specific services from simple numbered accounts to very complicated interlaced tax structures […]. This is an extreme form of the international division of labor. The offshore world is not a geographical area. Rather it arises in the niches and gaps of colliding legal- and economic zones. So tax- and veiling oases are homes for the multitude of legal constructions for businesses, bank accounts, funds, and foundations. However, these are often only backdrops for the international capital streams. The real businesses take place elsewhere. Capital streams rarely end in shadowy oases. Many smaller states are much too unstable and economically insignificant. The real harbors of money are the great financial centers of the world like the City of London, Switzerland or Frankfurt. The legal constructions in the offshore world are merely roundabout ways of the money stream. As such, tax oases are only "the periphery of a system spanning the world at whose center sit powerful nation states and important world financial centers full of banks, tax experts, and lawyers." The whole offshore system would break down without this core.



The big banks active internationally are the prerequisites for the functioning of the offshore world. Their omnipresence first makes possible the border-crossing transport of money. Add to that an extensive industry of intermediaries. Lawyers, trustees, fiduciaries, property managers and tax consultants worry about the details, provide the know-how and ensure a smooth course. With their help, pseudo-businesses, foundations, and trusts are constructed all over the world. Swiss or Lichtenstein accounts, real estate, and other wealth are put in the ownership of these shell companies. The real owners are veiled and legal obligations circumvented.



Founding offshore partnerships is child's play. Often only a few minutes are needed to establish an offshore company with all the licensing procedures. The costs for that amount to 00 and upwards. For 00, a legal office in Panama can even create a firm through the Internet. A creation can be shifted within 24 hours to another oasis…



Different oases serve as bases for different operations. Oases with legal tax niches are emphasized for businesses while private persons are mainly involved in veiling tax fraud. States described as "tax oases" are useful for aggressive business tax planning. The IKEA example shows businesses do not need to be limited to one or two tax oases… The pressure exerted by tax havens on the corporate taxation of other countries resulted in a tax competition within the EU-27 and led to a drastic decrease of the nominal corporate tax rate between 1995 and 2013 from 35.3% to 23.2%. Austria also stands out in this race to the bottom.



CONCLUSION AND OUTLOOK



International organizations like the OECD have the tax fraud theme on their agendas. Pressure is necessary to enforce far-reaching measures against business tax avoidance practices. This may not end with lip-service. Concrete and effective measures must be carried out. Many European fiscal problems would be solved if business tax avoidance and tax fraud were made difficult or prevented.



Multilateral agreements are necessary. Troost focuses attention on four essential points: 1) specific country reporting by businesses, 2) a common consolidated corporate tax base against business tax avoidance, 3) disclosure of economic authorization and 4) automatic information exchange against tax fraud. All these measures together have the potential of massively reducing the problem.

Report this post as:

Local News

GUIDE TO REBEL CITY LOS ANGELES AVAILABLE A12 5:39PM

lausd whistle blower A10 11:58PM

Website Upgrade A10 3:02AM

Help KCET and UCLA identify 60s-70s Chicano images A04 1:02PM

UCLA Luskin: Casting Youth Justice in a Different Light A02 11:58AM

Change Links April 2018 A01 11:27AM

Nuclear Shutdown News March 2018 M31 6:57PM

Join The Protest Rally in Glendale on April 10, 2018! M29 7:00PM

Join The Protest Rally in Glendale on April 10, 2018! M29 6:38PM

Spring 2018 National Immigrant Solidarity Network News Alert! M19 2:02PM

Anti-Eviction Mapping Project Shows Shocking Eviction Trends in L.A. M16 5:40PM

Steve Mnuchin video at UCLA released M15 12:34AM

Actress and Philanthropist Tanna Frederick Hosts Project Save Our Surf Beach Clean Ups M06 12:10PM

After Being Told He's 'Full of Sh*t' at School Event, Mnuchin Demands UCLA Suppress Video M02 11:44AM

Resolution of the Rent Strike in Boyle Heights M01 6:28PM

What Big Brother Knows About You and What You Can Do About It M01 3:30PM

Step Up As LAPD Chief Charlie Beck Steps Down F14 2:44PM

Our House Grief Support Center Hosts 9th Annual Run For Hope, April 29 F13 12:51PM

Don’t let this LA County Probation Department overhaul proposal sit on the shelf F13 11:04AM

Echo Park Residents Sue LA Over Controversial Development F12 8:51AM

Former Signal Hill police officer pleads guilty in road-rage incident in Irvine F09 10:25PM

Calif. Police Accused of 'Collusion' With Neo-Nazis After Release of Court Documents F09 7:14PM

Center for the Study of Political Graphics exhibit on Police Abuse posters F07 9:50AM

City Agrees to Settle Lawsuit Claiming Pasadena Police Officer Had His Sister Falsely Arre F04 3:17PM

Professor's Study Highlights Health Risks of Urban Oil Drilling F04 12:42PM

Claims paid involving Pasadena Police Department 2014 to present F04 10:52AM

Pasadenans - get your license plate reader records from police F03 11:11PM

LA Times Homicide Report F03 1:57PM

More Local News...

Other/Breaking News

Neurogenèse involutive A18 9:21AM

Paraphysique de la dictature étatique A16 10:13AM

Book Review: "The New Bonapartists" A16 3:45AM

The West Must Take the First Steps to Russia A14 12:25PM

Théorie générale de la révolution ou hommage à feu Mikhaïl Bakounine A14 3:30AM

The Shortwave Report 04/13/18 Listen Globally! A12 3:50PM

“Lost in a Dream” Singing Competition Winner to Be Chosen on April 15 for ,000 Prize! A12 3:48PM

The World Dependent on Central Banks A12 4:43AM

Ohio Governor Race: Dennis Kucinich & Richard Cordray Run Against Mike DeWine A11 9:40PM

March 2018 Honduras Coup Again Update A10 10:52PM

Apologie du zadisme insurrectionnel A10 3:33PM

ICE contract with license plate reader company A10 1:14PM

Palimpseste sisyphéen A09 11:23PM

Black Portraiture(S) IV: The Color of Silence...Cuba No...Cambridge Yes A09 5:32AM

Prohibiting Micro-Second Betting on the Exchanges A09 4:18AM

Prosecutors treat Muslims harsher than non-Muslims for the same crimes A08 10:33PM

Amy Goodman interview on cell phone safety A08 10:29PM

Mesa, Arizona police officer kills unarmed white man A08 9:50PM

Israeli leaders should be prosecuted for war crimes A08 9:48PM

Paraphysique de l'autorité A08 12:11AM

Two Podcasts on fbi corruption A06 10:13PM

Fbi assassins assault & try to kill DAVID ATKINS A06 7:29PM

EPA Head Scott Pruitt: Of Cages And Sirens A06 2:15PM

The Shortwave Report 04/06/18 Listen Globally! A05 4:25PM

Nicaraguas Conflic with native Peoples on the Caribbean Coast Near Bluefields in Decade80 A05 12:14PM

Millions Boycott The Sponsors Of Laura Ingraham A05 11:36AM

THE CONSERVATIVE THREAT A05 6:51AM

The US, the Dollar, IS and Saudi Arabia A05 3:34AM

More Breaking News...
© 2000-2018 Los Angeles Independent Media Center. Unless otherwise stated by the author, all content is free for non-commercial reuse, reprint, and rebroadcast, on the net and elsewhere. Opinions are those of the contributors and are not necessarily endorsed by the Los Angeles Independent Media Center. Running sf-active v0.9.4 Disclaimer | Privacy