by Claire Bernish
April 2017

from TheFreeThoughtProject Website

PART 1

April 02, 2017

A groundbreaking new organization proposes multiple compelling arguments in answer to one of the most pivotal questions of our time:

What if the Government had to earn your money?

If it did - if everything from education to healthcare, law enforcement to charitable giving, to even the sacred social safety nets and retirement programs - it would function in your best interests, the Tax Revolution Institute contends, since the inane bureaucratic nightmare that is the current government strangles all semblance of efficacy from the system.

What the Institute, in actuality, candidly asks, is for individuals to step back and assess,
 

 

Is the government you fund through coercive taxation worth the price you pay?

"What if you could redirect your tax dollars whenever you saw them wasted by a government department; spent in support of a policy that does more harm than good; paid out to cronies for supporting a particular politician or campaign, or just deployed much less efficiently than by a local charity or non-profit that does a particular government job better than the government does it?" the Institute's website asks.

Further, considering how mired in its present state of odious inertia this superfluously bureaucratic State has become - and in light of resistance to drastic, immediate change - do smaller reforms to the current tax system even offer a viable solution?

What if private organizations, non-profits, religious institutions, businesses, wealthy individuals, volunteers, and cooperatives provided assistance better befitting entrepreneurs, laborers, the impoverished, the jobless, teachers, the houseless, innovators, or anyone with a specific or general need - without costing taxpayers hard-earned income they'd rather not allocate for such programs?

At present, an insidious web of laws, regulations, endowments, subsidies, and other rules and perks has so infected the administrative structure of the government, its most efficient function is interagency back-patting.

 

But, stripping the red tape from a foundation will do little to improve mushrooming social issues that might otherwise be alleviated by a dynamic network unassociated with the State.

A sizeable segment of readers probably raised eyebrows or rolled eyes at the mere suggestion private entities could be motivated by anything other than greed - or that the desire to amass wealth is inherently devoid of compassion...

 

But the Tax Revolution Institute arrived on its mission by investigating societal issues through the lens of skepticism.

Before discussing a number of impressive solutions - many already functioning full steam ahead, sans interference - it's necessary to understand the coercive nature of taxation, itself.

Because forcible taxation allows the State to allot your money as it deems fit - regardless of a program's efficiency, effectiveness, quality, or results - and you have no recourse for misallocated funds.

Your money will be spent - you just don't have a say so.

Besides rampant corruption facilitated by decision-making for the many concentrated in the hands of the few - and the accessibility that concentration provides mega-corporations and monied interests - the tax system diverts charitable funds as a middleman before the money reaches its target.

"Since people cannot send their tax money elsewhere," the Institute's website states, "organizations that would address social needs more effectively or efficiently than government agencies are either underfunded or never see the light of day.

 

Moreover, that lack of competition prevents us from fairly judging the effectiveness of government solutions against all of the better solutions we've been prevented from having, so the quality of those government solutions falls unchecked."

Where businesses and charities not tied to the government must deliver quality services to satisfy funders and compete with similar organizations - primarily by cutting waste and reducing inefficiency - government agencies, saddled with a steady and ever-increasing influx of funding, aren't beholden to pragmatism.

Government bookkeeping is a notorious fiasco.

Of all the kinks in the tax system as it exists today - an expansive list that could subsume countless volumes - the issue, at its core, is the lack of voice taxpayers have in the spending of their income.

However, the Institute posits,

"If you could redirect those tax dollars, the result would be revolutionary: there would finally be an incentive - indeed, a need - for politicians and public servants to clean house, to make sure that your tax dollars were doing justly and effectively what they were taken from you to do."

There are solutions.

Our tax system is deemed voluntary - for now, in name, alone. Taking that description to heart, a truly voluntary tax system offers an unending plethora of options for channeling your money the way you see fit.

For example, the Institute suggests,

"That could mean choosing not to fund corrupt agencies; it could mean diverting money to charitable programs that outperform government programs; it could mean directing money from pet political projects to the fundamental needs of your community.

"Putting choice into our system is the only way to ensure better services, delivered more efficiently and more accountably, to the people whose wellbeing is the only reason for taking their tax dollars in the first place."

Although the idea might be difficult in a nation whose recalcitrance drowns out the loudest call for sweeping reforms, wresting your own money from the State's bureaucratic and regulatory quagmire and directing it to programs of your choice hardly constitutes radical engagement.

In fact, that sentiment can be reduced to a single, virtually indisputable idea:

"The tax system should serve the people," the Tax Revolution Institute asserts, "and not the other way around."

How to make that reality - as seen in the number of groups already subverting the ailing system - will be a pleasant surprise discussed in 'Part Two' of this two-part series.

And as the Institute points out, the issue of taxation and inefficiency has nothing at all to do with partisan politics, rather,

"This is emphatically not a political project. It is a human one, and it is a humane one."

PART 2

Under construction...

Is the Global Taxman Coming?
by Don Quijones
April 01, 2017

from WolfStreet Website

Credit Suisse is once again under international investigation for allegedly helping its clients evade the prying eyes of national tax authorities.

This comes after the bank was fined $2.6 billion by the U.S. government in 2014 for helping Americans evade taxes. Helping high net worth private clients and corporations evade taxes, and then getting caught is not unique to Credit Suisse.

Fellow Swiss megabank UBS and UK giant HSBC were fined hundreds of millions of dollars for their troubles. The banks are not just helping their clients evade taxes.

In a report titled Opening the Vaults, UK-based charity Oxfam International revealed this week that in 2015, Europe's 20 largest banks registered over a quarter of their profits in tax havens - well out of proportion to the level of real economic activity that occurs there.

Once again, Luxembourg was a top destination for funds, while in Ireland the same banks recorded profits that were 76% higher than the global average in 2015.

Only the Cayman Islands was found to have a higher profitability rate.

None of this should come as a surprise. If any organization knows how to bend the rules and use and abuse the tools and levers of global finance to minimize a company or individual's tax "footprint," it's today's generation of global banks.

And no matter how many fines they are made to pay, they're not going to change their ways.

And that is bad news for today's governments, which need increasing amounts of money to meet their obligations and service their debts, as well as rescue the banks every time they get in trouble.

It is also bad news for regular taxpayers since they will have to make up the difference, until that's no longer possible.

The U.S. government alone loses $188 billion of tax revenue each year as a result of tax avoidance, according to calculations by the International Center for Tax and Development.

In China, it's $66 billion; in Japan, $46 billion; in France, $19 billion and in Germany, 15 $billion. But it's the resource-strained economies of the Global South that pay the highest price.

Between 2001 and 2010 alone, it is estimated that developing countries lost US$5.86 trillion to illicit outflows - outflows that in most cases flowed to and through banks in places like Switzerland, Luxembourg, the Netherlands, and the City of London.

According to Oxfam's report, there is one obvious solution to this global problem:

Create a global tax body to lead and coordinate international tax cooperation. This process could start with an International Framework Convention on Tax. Establish a clear and objective list of tax havens.

What Oxfam fails to mention is that such a body already exists - the Global Forum on Transparency and Information Exchange for Tax Purposes (GFTIETP).

Most people have never heard of it, but nonetheless its influence is growing.

GFTIETP works under the auspices of the Organization for Economic Cooperation and Development (OECD) and G20.

Developmental NGOs like Oxfam would much prefer to see it fall under the purview of the United Nations where developing nations might have some semblance of influence over proceedings.

The Global Alliance for Tax Justice, of which Oxfam is a sponsor, is calling for the creation of an intergovernmental UN Global Tax Body as part of its Global Week of Action to End Tax Havens, which began today.

For now, however, it's the OECD that's running the show.

And the show is getting bigger all the time. GFTIETP boasts a membership list of over 120 jurisdictions, as well as the Member States of the European Union.

That's over 150 out of the world's roughly 200 nations, representing over 90% of the global economy, that have agreed to share the financial details of their citizens, both private and corporate.

In an article ominously titled "Why Taxation Must Go Global", German Finance Minister Wolfgang Schäuble was barely able to contain his excitement at the prospect of technological advances and global cooperation making it possible for tax authorities to keep ever closer tabs on the people's money:

"Under the CRS (global Common Reporting Standard), tax authorities receive information from banks and other financial service providers and automatically share it with tax authorities in other countries.

 

In the future, virtually all of the information connected to a bank account will be reported to the tax authorities of the account holder's country, including the account holder's name, balance, interest and dividend income, and capital gains."

Over 50 of the Forum's member governments have pledged not only to share tax information on request but also automatically.

The aim is not just to create homogenized standards of financial information sharing that are broadly accepted by governments all over the world, but to have them implemented, says Pascal Saint-Amans, the director of the OECD Centre for Tax Policy and Administration.

Ultimately, the OECD wants to,

"build a sound and reliable international tax system for all."

The proposals and ideas are all cloaked in positive soundbites, with words like "development," "inclusiveness" and "justice" particularly prominent.

It's also largely true that in an increasingly globalized economy, the only realistic hope national governments have of tapping into the gargantuan - and ever increasing - fortunes of the world's wealthiest individuals and corporations is through cooperating with other national governments and closing down tax havens.

But is that really the main objective here?

After all, it's hard to imagine the same political leaders who casually meet up with CEOs and chairmen of the world's largest corporations in for a such as the annual Bilderberg meeting or the American or European chapters of the Council for Foreign Relations suddenly deciding to throw their primary constituency overboard.

It's more likely that the main targets of the global tax crackdown are not the world's biggest banks and corporations but the proceeds of the informal economy, the fastest growing part of the global economy that is estimated to represent as much as 45% of total global economic activity.

By creating a global cross-reference of everything that moves in the financial world, and by implementing increasingly draconian measures to limit the use of cash-in-fist while promoting the use of digital alternatives, governments will be able to track every penny people earn, spend, or save.