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  • Mark 8:56 am on November 18, 2018 Permalink | Reply
    Tags: , , , , off shore, tax,   

    The Vertigo of (Accelerated) Corruption 

    I’m utterly gripped by Oliver Bullough’s Moneyland and its account of the meta-country being built through the ability of global elites to escape national jurisdictions, facilitated by an army of lawyers, accountants and wealth managers. One of the most incisive themes concerns the acceleration of this corruption and the difficulty which it creates for public or private investigators seeking to reconstruct events. Not only do investigators move more slowly than those they are investigating, they do so in a game which is rigged against them as it is much easier to hide wealth through global dealings than it is to find it from the vantage point of a particularly national jurisdiction. From pg 20:

    The physicist Richard Feynman supposedly once said: ‘If you think you understand quantum mechanics, you don’t understand quantum mechanics.’ I feel the same way about the way offshore structures have warped the fabric of the world. But if this dizzying realisation sends me out of the house and away from my screen, there’s no escaping it. The building where I buy my morning coffee is owned in the Bahamas. The place I get my hair cut is owned in Gibraltar. A building site on my way to the train station is owned in the Isle of Man. If we spent all of our time trying to puzzle out what is really happening, we’d have no time to do anything else. It’s no wonder most sensible people ignore what the super-rich get up to. You follow a white rabbit down a hole, the tunnel dips suddenly and, before you know it, you find yourself falling down a very deep well into a new world. It’s a beautiful place, if you’re rich enough to enjoy it. If you’re not, you can only glimpse it through doors you lack the keys for.

    The vertigo this induces can only be solved by recognising the inadequacy of methodological nationalism to make sense of the scale of this corruption, hence his notion of moneyland as something akin to a meta-country being built within the crumbling ruins of the Westphalian order. From pg 25.

    Moneyland induces vertigo to such an extent that, once the idea had occurred to me, I felt dizzy because it explained so much. Why do so many ships fly the flags of foreign countries? Moneyland allows their owners to undercut their home nations’ labour regulations. Why do Russian officials prefer to build billion-dollar bridges rather than schools and hospitals? Moneyland lets them steal 10 per cent of the construction costs, and stash it abroad. Why do billionaires live in London? Moneyland lets them dodge taxes there. Why do so many corrupt foreigners want to invest their money in New York? Moneyland protects their assets against confiscation.

  • Mark 7:29 pm on July 20, 2016 Permalink | Reply
    Tags: , , , , tax,   

    The defensive elites of the cultural industries  

    In my search for ‘defensive elites’, which is to say high-net worth individuals exhibiting insecurity and defensiveness about their position within society, I’ve tended to focus on the business world. But this fabulously readable book by Harry Browne, The Frontman: Bono (in the Name of Power), suggests I’ve cast the net too narrowly. From loc 877:

    Drummer Larry Mullen Jr, not always a reliable ally of the man whose ass he had gazed at across a thousand stages for thirty-plus years, showed similarly touchy out-of-touchness when he whined about dirty looks at Dublin Airport: there was ‘a new resentment of rich people in this country … We have experienced [a situation] where coming in and out of the country at certain times is made more difficult than it should be –not only for us, but for a lot of wealthy people … The better-off [are] being sort of humiliated.’ Without the entrepreneurial rich, Mullen concluded with accidental accuracy, ‘we’d be in a very, very different state’.

    Can anyone think of comparable examples? I’m sure there must be loads out there. 

    Bono on loc 1510 from the same book:

    ‘It’s much more glamorous to be on the barricades with your handkerchief over your nose than it is to have a bowler and a briefcase and go to work … But … that’s the way to get the work done. It’s uncool. It’s incredibly unhip. But it’s the way to get it done.’

    • Martha Bell 9:58 am on July 21, 2016 Permalink

      I’m not sure about defensive, but we have a few reclusive elites of the cultural industries settling in here in New Zealand where society is too polite to humiliate the entrepreneurial rich (most of whom are farmers). We have AC/DC drummer Phil Rudd behaving badly but happy to live a quiet life here and we have James Cameron and family on a ‘lifestyle block’ /country estate in a quiet farming community north of Wellington. It will be interesting to wait and see what unfolds.

    • Mark 8:01 am on July 25, 2016 Permalink

      maybe they’d become defensive if they have their ‘quiet’ threatened?

  • Mark 3:06 pm on June 12, 2016 Permalink | Reply
    Tags: , , tax, taxation,   

    A sign of how messed up expectations about taxation have become in the last few decades 

    This was Donald Trump’s stance only a couple of decades ago. From pg 222 of Never Enough: Donald Trump and the Pursuit of Success:

    Trump attempted a more serious pose, traveling to Capitol Hill to tell a congressional committee that he thought they should raise taxes on the rich. Reagan tax cuts that had reduced the maximum rate to 31 percent ought to be abandoned, he said. A top rate of 50 or 60 percent would be better for the country.

  • Mark 10:46 am on March 24, 2015 Permalink | Reply
    Tags: , osborne, tax,   

    Why I can’t take Osborne or Cameron seriously when they promise to ‘wage war’ on tax evasion & avoidance 

    From John Urry’s Offshoring, location 1109:

    Cameron’s father, Ian Cameron, indeed made his fortune through tax avoidance. He took advantage in the 1980s of the new climate of less-regulated investment after Margaret Thatcher abolished exchange controls in Britain in 1979. This enabled money to be moved in and out of the country without it being taxed or controlled by the UK government. Ian Cameron established and directed investment funds located within various tax havens. He became chairman of Close International Asset Management, a multimillion-pound investment fund based in Jersey; a senior director of Blairmore Holdings Inc., registered in Panama City and currently worth £25m; and a shareholder in Blairmore Asset Management, based in Geneva. Blairmore Holdings was established in 1982. The lengthy prospectus written in 2006, designed to attract high net worth investors with at least US$100,000 to buy shares, was explicit as to how investments would avoid UK taxation. It stated: ‘The fund is not liable to taxation on its income or capital gains as long as such income or capital gains are not derived from sources allocated within the territory of the Republic of Panama.’ The fund was not subject to UK corporation tax or income, and under Panamanian law it did not pay tax derived from income generated in other parts of the world. Ian Cameron’s wealth was estimated on his death in 2009 as £10m. These tax-dodging companies located in various tax havens thus helped to finance David Cameron’s ‘posh’ education and hence his progress to becoming British PM

    • Jeremy Norfolk 6:24 am on April 5, 2016 Permalink

      This is no different (apart from the bearer shares) to the large numbers of totally respectable unit trusts and OEICs, in which ordinary UK residents are free to, and do, invest. They pay no, or very low, income or capital gains tax in the jurisdiction in which they are registered (e.g. Jersey, Luxembourg, Dublin), but UK residents pay income tax on any income received and capital gains tax on any capital gain on sale of the shares. The effect is simply to defer the payment of tax. This is only marginally different from UK registered unit trusts, which also pay no capital gains tax.

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