Assymetric Compensation - AKA Looting - Michael Hennigan casts an eye on some Irish Looters

Hennigan writes here that Cowen's cuts package is a band aid on a broken leg, and that there is a whole class of looters in Ireland internationally with an assymetric sense of their own entitlement. After twenty years of the cult of celebrity and idolisation of oligarchs, there is a sea change coming in attitudes to wealth and remuneration. Has Cowen, in his cogitations on making cuts, grasped that?

http://www.finfacts.ie/irishfinancenews/article_1015830.shtml

Nope, he hasn't. Why this Government aversion to raising income tax?? Coughlan was quoted in one of the Sunday papers as saying she was worried if we'd cut VAT that personal taxation would have had to have gone up. How exactly would she describe the income levies?? VAT is regressive, it hurts the poor more. This recession is going to be bad anyway, but far, far worse if the Govt can't balance its books. Time to close off some of the tax loopholes and make the wealthy pay more.

Talking of looting, AIB was still in discussions about paying its capital markets staff bonuses...(IT, Sat 31 Jan). HellO, when the state is paying 6% interest thanks to the Guarantee and we're about to have to recapitalise them. What they do when they are not taking Govt coin is up to them, but when the rest of us are going to have to take de facto pay cuts (7% increased pension contribs, affecting takehome pay), providing we are still IN jobs, I DO NOT think bonuses are appropriate

The slow conclusion, now that the PDs are gone and not able to act as scapegoats, is that Fianna Fail is an economically right wing party when push comes to shove.

They have pushed regressive taxation measures for the last ten years and now they are pushing regressive cuts.

cactus flower wrote:

The slow conclusion, now that the PDs are gone and not able to act as scapegoats, is that Fianna Fail is an economically right wing party when push comes to shove.

They have pushed regressive taxation measures for the last ten years and now they are pushing regressive cuts.

I think you are giving FF too much credit saying that they have a wing at all, it's quite clear that they haven't a clue and as a result of that we haven't a hope.

Neither has anyone else; saw Brown interviewed today and he sounded even less impressive than our lot. Apparently the vaunted stimulus plan is banjaxed because it relies on PFI, which is drying up because the banks aren't lending... so Gord is paying to prop up banks that are lending to private companies that are chargeing interest costs etc to the Government for building works etc. So the UK taxpayer gets to pay 2-3 times, instead of once, if Government finance was used directly. Why did Alan Milburn refer to PFI once as the only game in town?? Because, I suspect, PFI does not count as official Govt debt, so they can hide debts off the books

Yer couldn't make these things up


Meanwhile, Obama is making protectionist noises that are scary. He is quite rightly suing the pants off UBS re US tax evasion... the Observer today was suggesting they could lose their US banking licence. Meanwhile, the Swiss Govt is very scared their banking confidentiality record is about to get smashed. US asks for 17000 US customer records and is offered 300. However, one of the papers was suggesting he could move from banks to investigating the actions of US companies in avoiding US taxes abroad... Ireland was mentioned. Bit worried about our FDI.....

Do you have a link on that expatgirl. I was just reading that Obama had agreed to water down "Buy America" aspects of his stimulus plan "after European diplomats had privately threatened to launch a trade war". in retaliation. They have apparently said they would "review" Protectionist policies already agreed in the House of Representatives: this including a US steel only policy for stimulus projects.

The Indo (page 22) describes "quiet fury" as the diplomatic message from "America's closest allies".

With Brown and his "buy British", xenophobic pickets and a reversion to digging out local industry with massive financial supports, I can't see how protectionism and a rapid deterioration of international relations can be prevented.

From the feedback out of Davos, its clear that you are right: they don't know what they are doing, or what is happening. The whole system is unravelling, wiping out productive forces built up over the last twenty years or more.

Perhaps the cosy private-wealth arrangements of the last couple of decades are finally breaking up. If so, good, since nobody got wealthier but the top tier.

Auditor #9 wrote:

To stop the vultures from finding a perch. A global liquidation of the various Island tax havens would be a start.

Pin-Striped Pirates
Posted December 16, 2008

Why does the UK retain a handful of colonies? To destroy the world’s taxation systems.
http://www.monbiot.com/archives/2008/12/16/pin-striped-pirates/


If we had any semblance of global democracy it would've happened long ago...

Quote :

A global liquidation of the various Island tax havens would be a start

.

Unfortunately for us, we are seen by many as an island tax haven ourselves.

cactus flower wrote:

Quote :

A global liquidation of the various Island tax havens would be a start

.

Unfortunately for us, we are seen by many as an island tax haven ourselves.

The only plus is that, unlike the Swiss/Austrians/Luxembourgers, we have no major hangups about taxation secrecy and are mostly happy to help the IRS with their enquiries about US tax evaders (note: evaders, not avoiders). This I was told by one who knows his taxation; dunno if it is right. Apparently we are one of the more compliant EU members which will HOPEFULLY mean that the US will get bogged down tangling with the Swiss and Austrians and take a very long while to get around to us.

Note; I am not in any way defending tax evaders; they deserve what they get. I do, however, think it is legit to lower corpo taxes on an island with no natural resources to speak of and a peripheral location. How else would we compete??

http://www.guardian.co.uk/business/2009/feb/01/ubs-banking

There's the UBS case stuff.

http://www.tribune.ie/business/article/2009/feb/01/tax-haven-ireland-on-obamas-hit-list/

there's the Irish tax haven status stuff

Heck expatgirl - I wish I hadn't read that just before bed time - and the CDF stuff in the Tribune as well.

The Swiss stuff is extraordinary. The Swiss are loaned out many times more than their GDP. I can't believe it is all OK with them.

Quote :

The case dates back to when a senior UBS banker signed a US court statement seven months ago detailing how he smuggled diamonds in toothpaste tubes, destroyed offshore bank records on behalf of clients and helped a Florida property tycoon evade taxes of $200m on offshore assets worth $7.26bn.

In a seven-page deposition, the senior manager claimed that he was encouraged to win clients at UBS-sponsored tennis tournaments and art events. UBS bankers, according to legal papers, are accused of helping wealthy Americans conceal ownership of their assets by creating "sham" offshore trusts. In November, UBS stopped using offshore trusts on behalf of its US customers.

The Observer has been told by well-placed sources that the authorities are determined to force UBS to hand over account details of its 17,000 US clients. The bank has indicated it is willing to release details of only 300 of them.

UBS, according to Swiss newspaper reports, offered to pay a large fine to the US, thought to be more than $1bn, in return for immunity from prosecution.

The Swiss government is desperate to limit the number of clients' details handed over to investigators to protect the cornerstone of its banking sector - secrecy. The US Internal Revenue Service and UBS declined to comment

Brown and Obama are both gunning for Ireland as a tax haven and the Bank Guarantee was also rightly seen as a rogue action.

Very tough times are coming.

The swiss franc is traditionally seen as a haven, but according to a financial type I know, has not been behaving as such recently... he's worried about it, and UBS.

Brown is jarred off about the corpo tax and the bank guarantee, but what does he call his debt insurance scheme?? It is more complex than you would think though, he has to watch out for Obama more than we do because of the Channel, Cayman Islands, Isle of man, etc. Again, evasion is the first target. Obama may go for low hanging fruit (the worst offenders), and there, he is apparently being egged on by the German finance minister, who is very upset about moolah leaching through his Southern borders, apparently.

We are not in the first tranche of targets, and I suspect the Swiss and Austrians may take a long time to crack. In the meantime, a lot of other stuff will be happening; I think this is a problem of a medium long term nature. For us, at any rate.

Oh, and I forgot, there's the internal UK problem of the City's non-dom domestic tax evaders.

expat girl wrote:

The swiss franc is traditionally seen as a haven, but according to a financial type I know, has not been behaving as such recently... he's worried about it, and UBS.

Brown is jarred off about the corpo tax and the bank guarantee, but what does he call his debt insurance scheme?? It is more complex than you would think though, he has to watch out for Obama more than we do because of the Channel, Cayman Islands, Isle of man, etc. Again, evasion is the first target. Obama may go for low hanging fruit (the worst offenders), and there, he is apparently being egged on by the German finance minister, who is very upset about moolah leaching through his Southern borders, apparently.

We are not in the first tranche of targets, and I suspect the Swiss and Austrians may take a long time to crack. In the meantime, a lot of other stuff will be happening; I think this is a problem of a medium long term nature. For us, at any rate.

This is a massive issue in Switzerland and the hostility to the German Finance Minister is immense here. From a Swiss point of view, this is how they see the problem

1. The German Finance Minister complains of the Swiss cantonal system allowing German companies achieve low corporation tax, depending on the cantonal tax rate. The Swiss say German companies can go to EU countries like Ireland and Malta and Cyprus and achieve similar tax rates.

2. The German Finance Minister is pissed off that individual Germans lodge untaxed money in Swiss bank accounts. The Swiss view is that this is a German problem between the German Finance Minister and german citizens. If they are doing this, then it is for the German Finance Minister to address the many and varied flaws in the extremely unwieldy German tax system.

3. The German Finance Minister is threatening Switzerland with economic sanctions if Switzerland does not co-operate with German investigations into tax evasion. Such threats, particularly from a German government minister, is likely to make Swiss co-operation with any EU inquiry in any field unforthcoming in the future.

The German Finance Minister is making himself extremely unpopular here. The Swiss nowadays give 3 reasons why they will not join the EU

1 Germany
2 Germany and
3 Germany.

And the Swiss are right.

I think the Swiss will be all right in the end, the same as the Icelanders have a good chance, because they are a small cohesive society.
They are also well-defended.

The reaction of the British Government to Iceland shows the underlying threat that the bigger States can and will exert on smaller states who threaten their financial interests.

cactus flower wrote:

I think the Swiss will be all right in the end, the same as the Icelanders have a good chance, because they are a small cohesive society.
They are also well-defended.

The reaction of the British Government to Iceland shows the underlying threat that the bigger States can and will exert on smaller states who threaten their financial interests.

The Swiss have a small (7.6 million citizens) cohesive society, despite having 3 different functional languages and 2 dominant religions. The Swiss see their society and democratic system of government and administration as unique. They have a highly developed sense of their own independence, never having being formally colonised and never having had anything like a monarchy. They are ferociously resistant to bullying, be it from France or from Germany. They are particularly dismissive of Peer Steinbruck, the German Finance Minister, to whom the rightly reply to his threats "Sort out first your own bloody tax system, then address inconsistencies in EU corporate tax before coming the heavy with us".

And who can blame them?

Slim Buddha wrote:

cactus flower wrote:

I think the Swiss will be all right in the end, the same as the Icelanders have a good chance, because they are a small cohesive society.
They are also well-defended.

The reaction of the British Government to Iceland shows the underlying threat that the bigger States can and will exert on smaller states who threaten their financial interests.

The Swiss have a small (7.6 million citizens) cohesive society, despite having 3 different functional languages and 2 dominant religions. The Swiss see their society and democratic system of government and administration as unique. They have a highly developed sense of their own independence, never having being formally colonised and never having had anything like a monarchy. They are ferociously resistant to bullying, be it from France or from Germany. They are particularly dismissive of Peer Steinbruck, the German Finance Minister, to whom the rightly reply to his threats "Sort out first your own bloody tax system, then address inconsistencies in EU corporate tax before coming the heavy with us".

And who can blame them?

They are saying this as a well armed people surrounded by mountains.

Slim

I have a very high regard for Switzerland. It is a country that seems to work despite the geography and diversity of languages. Perhaps it is because of these differences and the local powers that have evolved, that the country does work. I often think that regions are like teenagers and that they have to be given enough room! It is either that or rebellion or a teenager who is forced into submission.

expat girl wrote:

Note; I am not in any way defending tax evaders; they deserve what they get. I do, however, think it is legit to lower corpo taxes on an island with no natural resources to speak of and a peripheral location. How else would we compete??

I think there needs to be proper consideration given to the devolution of power and tax raising within a country or economic zone. If it is centralised, as in the UK and Ireland I think that money and influence increasingly reside in the centre to the detriment of the regions. I often think we need to consider first just how little we need to retain at the centre and how much can be left for locals. I fail to see why the regions within a country or economic zone cannot have variable tax regimes and services if the local population wish, but what you cannot have is actions that would undermine the overall currency.

Just saw a hilarious Panorama on Beeb 1 this evening on the Liechtenstein whistleblower, and the fact that he's on a German witness protection programme having shopped loads of tax evaders to 14 different jurisdictions. I think Peer Steinbrueck probably thinks similar, but larger lists of naughty German bankers and industrialists lie behind Swiss borders. Personally, I think he is probably right.

There is a huge difference between ireland and the swiss, apparently, we are happy to share our info on who is paying tax here with the IRS, and hence, probably also with Herr Steinbrueck. We sanction tax avoidance (legal), but possibly not evasion.

But the funniest thing about this programme was the cheery way they played God Save the Queen every time they went to present something on a British protectorate tax haven.

They also made it abundantly clear that Barack has it in for the Caymans...

Full marks to Panorama........

Yes, watched it too. Good production, plenty of comedy in it as well as the serious stuff. It wasn't always God Save the Queen, expat. They were playing on the fact that Lichtenstein use the same tune for their national anthem. As I believe do a number of other States. They use the melody in one of the American patriotic songs, that one they sang at Obama's inauguration. I think Iceland and Norway also use the same tune.... anyway, they were linking the tune between the British Protectorates and Lichtenstein. Which was funny.

Yeah, yeah, I know... 18/50 tax havens UK protectorates, not the whole lot. BUT, they DID play the tune every time they mentioned a British protectorate. Which was what I said....

Oh I know, I'm not disagreeing with you... I'm simply saying it was even funnier than you noticed because of the purposeful and repeated linking of the British protectorates to Lichtenstein.

johnfás wrote:

Oh I know, I'm not disagreeing with you... I'm simply saying it was even funnier than you noticed because of the purposeful and repeated linking of the British protectorates to Lichtenstein.

Sorry, silly me....