There are 13 ‘shoulds’ in the Lough Erne Declaration which has come out of the G8 summit:
1. Tax authorities across the world should automatically share information to fight the scourge of tax evasion.
2. Countries should change rules that let companies shift their profits across borders to avoid taxes, and multinationals should report to tax authorities what tax they pay where.
3. Companies should know who really owns them and tax collectors and law enforcers should be able to obtain this information easily.
The risks here are major embarrassment to the ChX, HMRC, the LBS, you and me, not least if GS withdraw from the Code
‘ChX’ = Read more
Well we’re no longer off 300 points on the Dow. (Off 265, as we went to pixels.) But what went on here?
It’s an indirect path from one to the other.
Gawker on Thursday unloaded some 950 pages of filings from Bain Capital-affiliated offshore funds in which Mitt Romney has invested his fortunes over the years. We’re still reading through the docs, though Dan Primack (who’s already read through them) thinks there’s not much to the issue. Read more
And the Syriza leader is talking tax, ahead of Greece’s weekend election.
The people of Greece want to replace the failed old memorandum of understanding (as signed in March with the EU and International Monetary Fund) with a “national plan for reconstruction and growth”… Read more
The governor of New York and state legislators have reached a deal to increase taxes for the wealthiest earners, while lowering rates for other residents, the FT reports. The tax rise for those earning more than $2m annually will replace a surcharge which would have led to lower rates if legislators had left it to expire at the end of this year. Governor Andrew Cuomo had resisted renewing the surcharge in the face of demands from Occupy Wall Street groups that the “millionaires’ tax” remain in force, according to the NYT, but the deal allows both sides to declare victory.
Twenty high-profile economists have written to the FT arguing that George Osborne should drop the 50p top rate of income tax “at the earliest opportunity” to boost growth. The economists say the move is essential to create an internationally competitive tax regime that will allow Britain to enjoy long-term sustainable economic growth. The signatories include many figures not usually associated with conservative causes, such as Bob Rowthorn of Cambridge University, and two former members of the Bank of England’s policy committee, DeAnne Julius and Sushil Wadhwani. Government officials, however, have suggested that the top rate is unlikely to be scrapped until 2013 at the earliest, when a pay freeze affecting millions of public sector workers is due to be lifted. Nick Clegg, Liberal Democrat leader, will insist the 50p top rate can only be scrapped if other measures, such as a property or “mansion” tax, are introduced to ensure the wealthy pay their “fair share” towards cutting the deficit. (Read the full letter.)
Erm, OK, not God. Not even the Pope — although an editorial in L’Osservatore Romano by the Pope’s banker comes close:
During a prolonged crisis, inheritance taxes, new forms of taxation or similar alternatives reduce or wipe out resources for investments, discouraging the trust of investors, penalizing the cost of the public debt and the possibilities of its renewal at its expiration. In this context, imposing taxes on property and on income is equivalent to a suicidal anti-subsidiarity of the state to the citizen. Those who legally possess assets, on which they have paid the proper taxes, have contributed to creating wealth and, thanks precisely to these assets, continue to produce them with investments and consumption. Read more
Companies including General Electric, Boeing and Verizon paid more to their chief executives in 2010 than they did to the government in taxes, according to a new study, Reuters reports. The left-leaning Institute of Policy Studies compared chief executive pay to current US taxes paid, excluding foreign and local taxes and a number of deferred taxes. The results show the scale of corporate use of offshore havens and tax credits, according to the IPS. While companies have lobbied fiercely recently to lower the top statutory corporate tax rate of 35 per cent, the study also found that many companies pay far less than the statutory rate, the NYT reports.
There are reports at pixel time that Greece has agreed to around €6.4bn in fresh austerity measures in 2011, notably including tax hikes.
Quick question. Read more
A draft document aimed at reassuring multinationals about the UK’s approach to tax policy will be published by the Treasury on Monday, amid renewed concerns that Britain risks losing some of its biggest businesses. The tax framework for multinationals, which lays down “key principles” for the development of tax policy, was drawn up by the Treasury after discussions with senior executives in a high-level forum launched by UK chancellor Alistair Darling in April 2008.