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  #151  
Old 30th October 2017, 06:38 PM
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Default Re: Why income/wealth equality is getting worse

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Stub King said View Post

....
I think that the numbers are pretty clear. the rich are getting richer and the rest are not. or at least not at the same rate. and it needs to change.
I hear Bunnings are increasing stock levels in their pitchfork range!
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  #152  
Old 30th October 2017, 09:27 PM
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Default Re: Why income/wealth equality is getting worse

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pipbarber said View Post
Quote:
Stub King said View Post

....
I think that the numbers are pretty clear. the rich are getting richer and the rest are not. or at least not at the same rate. and it needs to change.
I hear Bunnings are increasing stock levels in their pitchfork range!
Yes.

See the Nick H video upthread.
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  #153  
Old 9th November 2017, 05:38 PM
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Default Re: Why income/wealth equality is getting worse

For anyone who may not have caught up with the “Paradise Papers” leak – see generally -

Four Corners
and
The Guardian

A condensed summary:

The scale of the leak itself is staggering. This is said to be the world's largest ever leak. It consists of more than 13.5 million documents, from 21 different sources, being 2 law firms and the governments of 19 of the world's most prominent tax havens. That's right, it seems that important financial information from 19 different governments has been leaked. How that happened is not clear and the journalists do not seem to be saying at this stage. Were all of those documents on the same server? The largest single source is the law firm Appleby, situated in Bermuda. About half of the documents in all come from Appleby. The documents relate to the financial affairs of more than 120 politicians, and numerous famous people, including the Queen of England.

In Bermuda, the company tax rate is zero percent. Zero!

Wilbur Ross, the US Commerce Secretary, was a director of a shipping company, Navigator. He resigned, allegedly to avoid a conflict of interest, after he was appointed by Trump as the US Commerce Secretary (i.e., Minister for Commerce). The Paradise papers reveal that, via a chain of previously not well disclosed or understood Cayman Islands Private Equity companies that Ross controls, Ross kept his large (at one time, controlling) stake in Navigator. The papers also reveal that Sibur is by far Navigator's largest client. Sibur is a Russian company controlled by Putin's son-in-law and two other Putin oligarch/insiders, whom have been subject to US and EU sanctions ever since the Russian invasion of Ukraine.

Yuri Melnik is a close Putin insider and Russian oligarch who, among other things, worked with the Viktor Yanukovich-led Russian separatists in Ukraine. They are the same separatists that Paul Manafort and Chris Gates worked with and in relation to which work Manfort and Gates have been charged -in the US Russia probe- with conspiracy to defraud the US, money laundering and unregistered activities as foreign agents.

The Paradise Papers reveal that a Kremlin controlled tech company, headed by Melnik, funnelled tens of millions of dollars to Facebook via offshore tax havens. The inference seems to be that these payments were part of the interference in the lat US election. The papers also reveal that Melnik personally invested millions of dollars in start-up company established and controlled by Trump's son-in-law, Jared Kushner.

In other words, watch this space ...

It also seems that numerous heavy-hitting US GOP donors use the tax havens, such Robert Mercer who owns Breitbart, and funded the anti-Clinton pro-Trump, tax free, out of the havens.

Closer to home, Nike made sales of around $500million in Australia last financial year, but, it seems, paid only $4.5million in Australian tax. That's less than 1%. There are no Nike stores in Bermuda, but most of the money made in Australia went to Nike subsidiaries incorporated in Bermuda, as licence fees for the use of Nike IP (the “swoosh” symbol and various patents) now held there. In all, Nike purported to make a total profit last year of $1.5 billion in Bermuda. It appears that Nike paid no tax at all on $1.5 billion profit.

Also Re Australia, Glencore (formed from the merger of Xtrata and a Swiss multinational), is Australia's biggest coal miner. It was Appleby's largest client. It earned over $23 billion in Australia in the financial year ended 30 June 2014. It also paid less than 1% of that in Australian company tax. According to leaked minutes of the finance committee of its Bermuda subsidiaries, it booked a total of about $30 billion of debt to Glencore companies world wide, including $11.6 billion to its Australian operations. It used currency-swap interest rate devices to maximise the interest payments on that debt. Glencore has no office of its own in Bermuda. It has only one phone line, a permanent line inside the office of Appleby.

The Australian ATO is now investigating 19 resources and other major companies for tax avoidance/evasion using currency-swap interest rate devices. The ATO is seeking access to the Paradise Papers.

Appleby also seems to have established the corporate and trust structures which were used by the once lawyer of Michael Hutchense, Colin Diamond, to become, according to the leaked documents, the sole personal controller of all of Hutchense's IP and wealth. The Hutchense family in Australia (Michael's borthers and father) have received nothing. Except one thing. Diamond left Michael's father the belt which Michael committed suicide with. The inference is that Michael's daughter, Tiger-Lily also appears to have been seriously ripped off. That whole episode is ghastly.

Away from Australia, Apple's CEO, Tim Cook, angrily denied in evidence to the US Congress that Apple uses Caribbean tax havens.
True enough.
Apple uses Channel Island tax havens.

It seems there's further detail emerging every day.

It should be noted that all of the persons and entities referred to above as using tax havens say they've complied with the law.

That said, as to the ethics of it all, an OP from Gabriel Zucman, assistant professor of economics at University of California, Berkeley: -

The desperate inequality behind global tax dodging
Nearly 10% of the world’s wealth is held offshore by a few individuals. The rest of us pay the price for this theft.
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Last edited by Blue Lightning; 9th November 2017 at 06:10 PM.
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  #154  
Old 9th November 2017, 06:33 PM
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Default Re: Why income/wealth equality is getting worse

Quote:
Blue Lightning said View Post
For anyone who may not have caught up with the “Paradise Papers” leak – see generally -

Four Corners
and
The Guardian

A condensed summary:

The scale of the leak itself is staggering. ...
yeah, yeah, whatever ... think of all the jobs and growth we had as a result. if these companies had to pay tax they would have sacked thousands ... millions.
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  #155  
Old 10th November 2017, 09:24 AM
wadaye wadaye is offline
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Default Re: Why income/wealth equality is getting worse

Quote:
Blue Lightning said View Post
For anyone who may not have caught up with the “Paradise Papers” leak – see generally -

Four Corners
and
The Guardian

A condensed summary:

The scale of the leak itself is staggering. This is said to be the world's largest ever leak. It consists of more than 13.5 million documents, from 21 different sources, being 2 law firms and the governments of 19 of the world's most prominent tax havens. That's right, it seems that important financial information from 19 different governments has been leaked. How that happened is not clear and the journalists do not seem to be saying at this stage. Were all of those documents on the same server? The largest single source is the law firm Appleby, situated in Bermuda. About half of the documents in all come from Appleby. The documents relate to the financial affairs of more than 120 politicians, and numerous famous people, including the Queen of England.

In Bermuda, the company tax rate is zero percent. Zero!

Wilbur Ross, the US Commerce Secretary, was a director of a shipping company, Navigator. He resigned, allegedly to avoid a conflict of interest, after he was appointed by Trump as the US Commerce Secretary (i.e., Minister for Commerce). The Paradise papers reveal that, via a chain of previously not well disclosed or understood Cayman Islands Private Equity companies that Ross controls, Ross kept his large (at one time, controlling) stake in Navigator. The papers also reveal that Sibur is by far Navigator's largest client. Sibur is a Russian company controlled by Putin's son-in-law and two other Putin oligarch/insiders, whom have been subject to US and EU sanctions ever since the Russian invasion of Ukraine.

Yuri Melnik is a close Putin insider and Russian oligarch who, among other things, worked with the Viktor Yanukovich-led Russian separatists in Ukraine. They are the same separatists that Paul Manafort and Chris Gates worked with and in relation to which work Manfort and Gates have been charged -in the US Russia probe- with conspiracy to defraud the US, money laundering and unregistered activities as foreign agents.

The Paradise Papers reveal that a Kremlin controlled tech company, headed by Melnik, funnelled tens of millions of dollars to Facebook via offshore tax havens. The inference seems to be that these payments were part of the interference in the lat US election. The papers also reveal that Melnik personally invested millions of dollars in start-up company established and controlled by Trump's son-in-law, Jared Kushner.

In other words, watch this space ...

It also seems that numerous heavy-hitting US GOP donors use the tax havens, such Robert Mercer who owns Breitbart, and funded the anti-Clinton pro-Trump, tax free, out of the havens.

Closer to home, Nike made sales of around $500million in Australia last financial year, but, it seems, paid only $4.5million in Australian tax. That's less than 1%. There are no Nike stores in Bermuda, but most of the money made in Australia went to Nike subsidiaries incorporated in Bermuda, as licence fees for the use of Nike IP (the “swoosh” symbol and various patents) now held there. In all, Nike purported to make a total profit last year of $1.5 billion in Bermuda. It appears that Nike paid no tax at all on $1.5 billion profit.

Also Re Australia, Glencore (formed from the merger of Xtrata and a Swiss multinational), is Australia's biggest coal miner. It was Appleby's largest client. It earned over $23 billion in Australia in the financial year ended 30 June 2014. It also paid less than 1% of that in Australian company tax. According to leaked minutes of the finance committee of its Bermuda subsidiaries, it booked a total of about $30 billion of debt to Glencore companies world wide, including $11.6 billion to its Australian operations. It used currency-swap interest rate devices to maximise the interest payments on that debt. Glencore has no office of its own in Bermuda. It has only one phone line, a permanent line inside the office of Appleby.

The Australian ATO is now investigating 19 resources and other major companies for tax avoidance/evasion using currency-swap interest rate devices. The ATO is seeking access to the Paradise Papers.

Appleby also seems to have established the corporate and trust structures which were used by the once lawyer of Michael Hutchense, Colin Diamond, to become, according to the leaked documents, the sole personal controller of all of Hutchense's IP and wealth. The Hutchense family in Australia (Michael's borthers and father) have received nothing. Except one thing. Diamond left Michael's father the belt which Michael committed suicide with. The inference is that Michael's daughter, Tiger-Lily also appears to have been seriously ripped off. That whole episode is ghastly.

Away from Australia, Apple's CEO, Tim Cook, angrily denied in evidence to the US Congress that Apple uses Caribbean tax havens.
True enough.
Apple uses Channel Island tax havens.

It seems there's further detail emerging every day.

It should be noted that all of the persons and entities referred to above as using tax havens say they've complied with the law.

That said, as to the ethics of it all, an OP from Gabriel Zucman, assistant professor of economics at University of California, Berkeley: -

The desperate inequality behind global tax dodging
Nearly 10% of the world’s wealth is held offshore by a few individuals. The rest of us pay the price for this theft.
After the previous leak, I forget what it was called, the Legal Ethics professors started saying that it was a breach of legal confidentiality. I think however this is more akin to the duty to inform about sexual abuse which is revealed in the confessional. There may be a point at which the legal obligation to disclose outweighs the duty of confidentiality.
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  #156  
Old 10th November 2017, 12:11 PM
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Default Re: Why income/wealth equality is getting worse

@wadaye – I tend to agree.

The "previous leak" you are referring to, I assume, was the Panama Papers leak.

I'm not so sure, in that case, whether your Legal Ethics professor is clearly right. The Panama Papers leak, or at least parts of it, may not have been unlawful.

Mossack Fonseca, the law firm at the centre of that leak, may have engaged in unlawful conduct such as aiding and abetting money laundering, outright deliberate infraction of tax laws, and circumventing of international sanctions. Of course, it denies all this.

If, however, its conduct was unlawful, neither the law of confidentiality nor client legal privilege would be likely to operate to protect the information. Of course, the position may vary somewhat from jurisdiction to jurisdiction. In the US, a Judge in Nevada has upheld the validity of a subpoena to Mossack Fonseca on this very basis (Although, Mossack Fonseca has appealed against that decision).

Such principles are found in the statutes of most proper judisdictions, for example, see s125 of the Evidence Act (NSW) and, indeed, all of the other Australian Uniform Evidence Acts. Similar provisions lie at the heart of the US case I mentioned. The tax laws of Australia, and many other jurisdictions, also prevent reliance upon confidentiality and client legal privilege in cases of certain wrongdoings.
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Last edited by Blue Lightning; 10th November 2017 at 12:18 PM.
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  #157  
Old 10th November 2017, 12:11 PM
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Default Re: Why income/wealth equality is getting worse

That said, I don't necessarily think the legality of the Panama Papers leak or the Paradise Papers leak is the key point. I think the central issues are ethics and fairness, and how proper jurisdictions should act and coordinate to prevent these abuses.

That's because I decidedly do not think that it is fair that the great bulk of people bear the burden of paying tax, when the very wealthy, in substance, do not.

That was the point of the Zucman OP. Generally, I agree with Zucman.

It's also the point of The Guardian Editorial concerning the decision to publish:

Why we are shining a light on the world of tax havens again
After explosive leaks from an offshore firm last year, others in the sector insisted it was a bad apple. Now that claim can be tested


Quote:
... The Panama Papers posed a fundamental ethical question: is this fair?

...

As a direct result of the publication of stories ... politicians, academics and financiers began to debate more seriously the morality of offshore tax havens, and how they have been policed.

In one notable intervention, more than 300 economists, including the Nobel prize winner Sir Angus Deaton, signed a letter to world leaders that argued: “The existence of tax havens does not add to overall global wealth or wellbeing; they serve no useful economic purpose.”

...

In 2012, the then chancellor George Osborne described some aggressive schemes as “morally repugnant”. The then prime minister David Cameron said they were “not fair and not right”.

More recently, the iniquities of tax havens were an issue that united the US president, Donald Trump, and Bernie Sanders, who ran Hillary Clinton close for the Democratic presidential nomination last year.

Sanders struck a chord when he said it was time for the largest corporations in the US to “pay their fair share of taxes so that our country has the revenue we need to rebuild America”. Trump appeared to agree. He said he wanted to bring back “trillions of dollars from American businesses that is now parked overseas”.

Awkwardly for him, though, some of his own lieutenants and donors seem to be among those with money in offshore schemes. And the Paradise Papers show corporate America is in no hurry to bring its money back onshore. The opposite seems to be the case.

In the UK, the Conservative election manifesto boasted of “vigorous action against tax avoidance and evasion”. It has not happened yet.

Labour has demanded a public inquiry into the questions raised about offshore tax regimes. On Wednesday, the party’s leader, Jeremy Corbyn, goaded Theresa May, saying: “When it comes to paying taxes, does the prime minister think it is acceptable that there is one rule for the super-rich and another for the rest of us?”

Thanks to the Paradise Papers leak, the world will get a chance to scrutinise and pass judgment on the tapestry of schemes and networks politicians say they find so unpalatable – and many ordinary people find offensive and unfair.
The Guardian's focus on the UK is important. The UK is well and truly in a position to do something about this*: It has ultimate sovereignty over about a third of these tax havens, including Bermuda, the Channel Islands, the British Virgin Islands and many others.

(* - who knows, it might do something if Jeremy Corbyn is ever elected)
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Last edited by Blue Lightning; 10th November 2017 at 12:18 PM.
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  #158  
Old 10th November 2017, 04:58 PM
wadaye wadaye is offline
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Default Re: Why income/wealth equality is getting worse

Nonetheless the scale of this tax rort is nothing compared to the fact that worldwide, wealth is not taxed, but income is. That includes property including in particular homes which are not taxed even when sold. Since wealthy people don't need to earn income, this is completely regressive as it targets the poor.
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  #159  
Old 10th November 2017, 05:31 PM
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Default Re: Why income/wealth equality is getting worse

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wadaye said View Post
Nonetheless the scale of this tax rort is nothing compared to the fact that worldwide, wealth is not taxed, but income is. That includes property including in particular homes which are not taxed even when sold. Since wealthy people don't need to earn income, this is completely regressive as it targets the poor.
This is why a growth based economy is a good thing (kinda). Not earning an income and trying to live on savings means that you actually have an effective negative income. Inflation will slowly decrease the value of your savings. This will actually encourage you to then invest your money in a way that it generates a return at a rate greater than it is deprecating. Then this income can be taxed.

Of course, it's not uncommon for those who have managed to generate an obscene amount of wealth are also able to avoid paying tax on the income that they generate.
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  #160  
Old 13th November 2017, 01:52 PM
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Default Re: Why income/wealth equality is getting worse

An easy to read overview, from an OP in the New York Times:

How Corporations and the Wealthy Avoid Taxes
(and How to Stop Them)

By Gabriel Zucman
A professor of economics at the University of California, Berkeley and author of “The Hidden Wealth of Nations.”


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