Outlaw legal tax avoidance? Nonsense, you say! Makes no sense! Read on dear friends...
Every other month the world must suffer learning another numerical tag for a bunch of politicians getting together at the taxpayers' expense to issue meaningless statements.
In April it was the loudly anti-tax haven G-20 meeting in London, at which the all-time single year American budget deficit spender, President Barack Obama, restated his plans to destroy tax havens and his opposition to world tax competition.
Jackson Dead: G-8 Lives
This week, sandwiched in between endless TV coverage of the still dead Michael Jackson, the world is supposed to have its collective eyes trained on a meeting of the G-8. Q: Who or what, you ask breathlessly, are the G-8? A: The United States, Canada, France, Germany, Italy, Japan, Russia, and the United Kingdom.
Next question: why should we care? For some time now, the very existence of the G-8 has been in question, with a good many folks arguing that a group of leaders largely plucked from declining, heavily indebted Western countries can hardly provide a truly representative view on the world's problems.
Berlusconi to the Rescue
Thanks to the effervescent, ebullient, sometimes evasive prime minister of Italy, Silvio Berlusconi, the host of this week's G-8 circus, this august gathering is being held in the Italian mountain town of L'Aquila, in the Abruzzo region, which was struck by a 6.3 magnitude quake in April that killed nearly 300 people.
To help revitalize the region, where more than 50,000 residents remain homeless, Berlusconi moved the G8 summit there, although locals don't understand how a bunch of foreign politicians and their security details will help build houses for the homeless. As they used to say on the Rocky & Bullwinkle TV show: "Whatzamattau?"
With Silvio Berlusconi as his guide, President Barack Obama toured the L'Aquila earthquake zone, which may have reminded him of his current poll approval numbers. We don't know if the U.S. Secret Service brought along earthquake-sensitive animals said to detect earthquakes well before tremors strike.
Even before the G8 met, Newsweek suggested it already seemed destined to fail. After all, how can you tackle the global financial crisis, world poverty, and climate change when China, central to all these problems, isn't even there. (President Hu Jintao had to rush back home to kill more protestors in the bloody ethnic clashes in remote Xinjiang province). Then there's His Holiness the Pope who chose this moment to issue a muddled, contradictory attack on global capitalism.
Indeed, one of the only interesting G-8 passtimes is observing the event's host, Silvio Berlusconi, a man who has his mind on other things -- namely that he might get thrown out of office at any moment, following months of a cash-for-sex scandals.
Skip Iran & North Korea
Right away the G-8 leaders decided they would not support tougher sanctions against Iran for its post-election violence, nor sanctions against Iran and North Korea for their expanding nuclear weapons programs.
Instead, the assembled statesmen issued yet another broadside against what every sane person knows to be the true threat to the future of all mankind -- offshore tax havens!
Avec Gaz
While president Obama basks in natural press and popular adulation wherever he goes, the lesser political likes of UK prime minister Gordon Brown and his shorter, cross-Channel colleague, French president, Nicolas Sarkosy, have to claw for press attention when Obama is around.
So these two political pygmies held their own summit meeting, (2,400 feet above sea level in the French Alps), two days before the G-8, in the home region of that expensive mineral water, Evian, (both sans and avec gaz).
And in hopes it would bolster their failing polls at home, Brown and Sarkozy had no praise for the several tax havens that, since the London G-20 meeting, have fallen all over themselves to do the bidding of the Organization of Economic Cooperation and Development (OECD). No, the OECD Bobbesey Twins want to up the ante on those offshore jurisdictions that have already met the OECD color coded tax standards (those ever-changing, imaginary lists of black, gray and white).
Outlaw Tax Avoidance! (Huh?)
Brown and Sarkosy want the OECD bar to be raised still higher and the goal posts widened to include tax avoidance – which is not a crime – and not just tax evasion. How and why individual taxpayers or tax haven jurisdictions should be required to ban legal avoidance of taxes that are not owed is a mystery -- but this inane demand did get the press coverage for which they thirsted in Evian.
Name, Shame & Blame
The G-8 is also proposing that the OECD's Financial Action Task Force (FATF) once again be used to "name and shame" any “uncooperative” jurisdictions with financial regulatory failings. Although it seems highly unlikely that the major onshore countries, led by the U.S. and the U.K. which have allowed major failings in their financial regulation systems, would be included on this list.
Some years ago my Sovereign Society colleague, Mark Nestmann, spoke for me when "Every taxpayer has a right to try to avoid taxes. But when does complete legal tax avoidance turn into illegal tax evasion? The answer seems intuitive: evasion is driving around a tollbooth to enter a toll road without paying. Avoidance is taking an alternate free route."
Mark also noted that the highest courts in both the U.S. and the U.K. had endorsed this view, expressed by U.S. Supreme Court Justice Felix Frankfurter when he wrote: "Nobody owes any public duty to pay more than the law demands. Taxes are enforced extractions, not voluntary contributions."
Another Deadline
To lard their Evian anti-tax haven statement (avec gaz) Brown and Sarkozy called for "sanctions" to be imposed on tax havens beginning in March, 2010. "The world should be in no doubt that the writing is on the wall for tax havens wherever they may be," Brown said at a joint news conference with the French president. "Tax transparency, full exchange of tax information and reducing tax avoidance are crucial for the health of the global economy," Brown claimed. Sanctions could include restricting investment, imposing taxes on funds transferred to or held in tax havens, or the withdrawal of government aid, he suggested.
Listing to Port
In a game of Gallic oneupsmanship, Sarkozy called on tax havens to go even further, and to commit to greater transparency on all fiscal matters. "Tax havens have shifted from the black list to the gray list, now fiscal cooperation conventions must be signed...they need to exit the gray list," he railed.
And so dear readers, the global anti-tax haven campaign continues, tax oppression grows, freedom be damned.
* The Sovereign Society is a recognized voice in the complex offshore world. Join the Sovereign Society and keep informed.
WARNING: This e-mail is a suspected phishing scam. 
Comments