Johann Hari’s article in The Nation on How to Build a Progressive Tea Party is one of the more exciting and inspiring pieces of news I’ve read recently. Hari recounts how a group of Twitter-linked citizens outraged by David Cameron’s £7 billion cuts to social programs when a single company, cellphone giant Vodafone, was allowed to get away without paying £6 billion in British taxes, organized to shut down Vodafone stores across the country.
All the cuts in housing subsidies, driving all those people out of their homes [200,000 in London alone, apparently], are part of a package of cuts to the poor, adding up to £7 billion. Yet the magazine Private Eye reported that one company alone—Vodafone, one of Britain’s leading cellphone firms—owed an outstanding bill of £6 billion to the British taxpayers. According to Private Eye, Vodaphone had been refusing to pay for years, claiming that a crucial part of its business ran through a post office box in ultra-low-tax Luxembourg. The last Labour government, for all its many flaws, had insisted it pay up. But when the Conservatives came to power, David Hartnett, head of the British equivalent of the Internal Revenue Service, apologized to rich people for being “too black and white about the law.” Soon after, Vodafone’s bill was reported to be largely canceled, with just over £1 billion paid in the end.
Add to that billions of pounds in other tax loopholes allowing people and corporations to get off without contributing to the society that makes their business possible.
The movement, called UK Uncut, spread, forcing Cameron’s Conservative Party and their Liberal Democrat allies to take some action against tax evaders, and even getting sympathetic attention in the country’s right wing press — except for Rupert Murdoch’s News International.
That exception is very, very intriguing… Apparently, News International, which owns Fox News, hardly pays taxes in the U.K. or in the U.S. — which sounds like a Golden Opportunity to me… Back to that in a minute.
Here’s how Hari responds to the argument that people like Sir Philip Green — the UK’s ninth wealthiest citizen who runs some of the leading High Street chain stores, advises Cameron, and pays NO TAXES because he claims his income is earned by his wife who lives in the tax haven of Monaco — should not pay taxes because they “earn their money all on their own”:
Let’s take one branch of Topshop, and for twelve months we’ll deny any services funded by collective taxation to that store. When the rubbish piles up, we won’t send garbage men to collect it. When the rat outbreak begins, we won’t send pest control. When they catch a shoplifter, we won’t send the police. When there’s a fire, we won’t send the fire brigade. When suppliers want to get their goods to the store, there may be a problem: we won’t maintain the roads. When the employees get sick, we won’t treat them in the publicly funded hospitals. Then let Philip Green come back and tell us he does it all himself.
Could this Tea Party-like but real populist form of activism be transferred to the United States? Hari notes that 83 of the 100 largest US corporations hide fortunes in tax havens. Sixty-one percent of Americans polled — far more than would back any alternative options — support increasing taxes on the rich as a way to cut the deficit. (That’s not the message you get from the mass media, is it?)
The main tax evaders in the US, according to Hari, are pharmaceutical and financial companies, who don’t have storefronts that could be boycotted. But other brands — Apple, Bank of America, Best Buy, ExxonMobil, FedEx, Kraft, McDonald’s, Safeway, and Target — do.
And could we not shut down Fox News around this country? I’m not sure how, though I think we could be creative (starting by letting MSNBC’s stalwart Fox-pickers pick up on this story, if their bosses at GE let them). I’m not even sure how to measure whether Fox, or Murdoch individually, pay their U.S. taxes or not. Any ideas or information about that are welcome.
The point is that the conservative strategy of attacking unions and dismantling the public sector while letting billionnaires rake in ever greater profits (see Wisconsin, Ohio, Florida, et al.) is not the way to address the deficit. If politicians — like Obama, who said he would clamp down on tax evaders — won’t do their job because they rely on those tax evaders to fund their campaigns, then citizens should do it for them.
Thanks for this Adrian. I like Johann Hari too. This whole situation is nothing more than Reaganism on a zombie-like autopilot crash course with social reality. Hopefully Reaganzombies will realize they’re dead. I give them 12 months for their batteries to run out (I’m an optimist).
I hate to say it but it’s not only conservatives but liberals as well looking for safe havens to evade taxes…the most famous US investor actually bragged about paying less in taxes than most average citizens….oh and by the way it was Warren Buffett (liberal)….how many millions does he make each year?
This is what is definitely being talked about on State Street and around the capitol building in Madison. I talked with several teachers, students, and nurses who understand that their standard of living is being cut but those at the top just get more and more. Yet, Walker and other politicians can’t seem to make distinctions within the broad category “taxpayers” or even that there are many, many who simply don’t fit that description but should.
I don’t have any figures here, but I am interested in 4 upper midwest states and how they handle this situation. Iowa and Wisconsin governor’s propose to cut more and more (even cut more taxes!!!) in the theory that it spurs growth. Governors Dayton (MN) and Quinn (IL) campaigned on and are in the process of passing legislation to raise taxes. Branstad in Iowa is especially betting on making Iowa an economic haven of sorts with rock-bottom corporate tax rates. Will we hear a “giant sucking sound”? Or can MN and IL get companies to stay in state in exchange for doing business there, as countries like China do?
This last part seems crucial to me as long as Republican neo-Reganites (who conveniently forget Reagan raised taxes more than once) schill for corporate interests. And, it sounds a bit like what you describe in your post. It seemnot only fair, but reasonable to simply say “Hey, if you want to do business in our territory, you need to pay for services.”
I like the discussions around activism to effect change in different parts of the world – obviously we’re seeing this in the Arab world in a huge way.
I do wish my country (Canada) would see a little more of this passion…it seems that a lot of it is leaching away with the apathy towards the political process here.
Jordan
Neo – I thought Buffett wasn’t bragging so much as he was simply pointing out that it ain’t right.
David – Thanks for that background on the differences between the Midwest states governors (i.e. Minnesota’s and Illinois’ govs raising taxes on the wealthiest, while the other three you mention move in the opposite direction). Nice to know there’s that kind of diversity out there. I lived for 2 and a half years in Wisconsin, and while I think some progressives’ romantic idea of the state is about 80 years out of date, Walker (and Russ Feingold’s loss in the last elections) has come as a real surprise to me… If I was there now, I think I’d be tempted to think about moving to Minnesota. Should make for an interesting dynamic, in any case…
Jordan – As a Canadian myself, I share your disappointment with the lack of passion in Canadian politics of late. It would be one thing if things were good, but they hardly seem that… Maybe they’re just not bad *enough* yet for enough people?
Tim – I hope you’re right.
Very interesting perspectives from you ….as someone who comes from UK, lives in australia for 20 years and now also half the year in Bangkok Thailand it makes me wonder whether actually US politics is quite exciting. AU is possible like Canada …Jordan, just a lack of passion although the size of the country is a hindrance. Thailand of course is filled with too much passion in the way of corruption and the UK I’m not going to go there…maybe in perspective you don’t have it to bad.
Apparently things are moving in the direction you suggest. http://www.usuncut.org/blog/what-to-do
I live on an offshore tax haven, and I can tell you now that people here certainly don’t feel as secure as what they used to.
Both in terms of job security and the transparency laws that are gradually being imposed upon us by the UK and Europe.
I’m not surprised this is happening, it had to eventually and truth be told I do sometimes feel somewhat guilty knowing that so much money that is kept here could be going into essential projects within the country of origin.
It’s a catch 22 situation, you know that tax havens have always been frowned upon by the rest of the world, and one can understand why, but then again are we going to necessarily bite the hand that feeds us?
Michael