In the UK recently, taxpayers’ money was being used to fund chilling adverts aimed at self-employed people, that the tax authorities are closing in on them. It’s scandalous, trying to scare people who are actually doing something real and productive in the economy, just because they’re the ones that they might be able to catch. They’ve obviously got no chance with anyone with serious money because they can employ accountancy firms who can run rings around them, leave no trails to follow.
Big international accountancy firms, now enormously influential in society, enable all the tax efficiency that some enjoy. These accounting giants rake in hundreds of millions from the public purse every year in contracts, whilst endlessly manufacturing complex and elaborate schemes whereby their corporate clients can escape paying tax to the public purse, with the expert knowledge of regulation that comes from having written the regulations themselves.
They devise tax products, waves of new and original devices, seeking out new loopholes and wormholes in the weird, multi-dimensional space of accounting. These tax products must be registered with the tax authorities for approval, but they start selling and taking commission on these products straight away. Everything is set up for the accumulation of profits first before any other consideration. There’s no waiting for approval of a scheme, that’s to be decided much later when the authorities can catch up with its backlog and rule on its legality. The authorities, of course, are overwhelmed with new schemes like this.
Recently, in the UK, MPs confronted officials from the leading accountancy firms with a few facts. Evidence was being referred to in this parliamentary committee that accountancy firms will sell products with only a 25% chance of eventually proving to be legal. They openly admitted to selling products with only a 50% chance of proving to be legal.
Senior accountants are given roles as advisors to the Treasury and help to design policy, enabling them to perhaps custom-engineer the loopholes in the policy which they can then go back and sell to their clients. How surreal is that? Margaret Hodge, MP, at this committee, put it to one of the firms involved in recent activity like this that it was a case of poacher turned gamekeeper turned poacher again.
The revolving doors between government and business in the dishonest modern world encourages this kind of thing. It’s like they need to get the accountancy firms in to design the regulation, because so complex is it that it’s only the accountants that understand how to regulate it. (It turns out that an executive from a company that builds gas-burning power stations is designing the subsidy system for gas-burning power stations. We’re not making this up.)
This recent parliamentary committee on the accountancy world saw maps of long voyages around the globe upon which accountancy firms had taken corporate earnings to spirit the money out of reckoning. One thing that seemed to be made clear by this hearing was that there exists no clear line between legal tax avoidance and criminal tax evasion.
A social security fraudster (widely believed to account for over 30 multiples of the actual figure of 0.7% of the total budget) would be routinely described in verminous terms. And in recent years Prime Minister Cameron referred to a popular comedian’s (completely legal) tax efficient scheme as immoral. The point seems to be that he didn’t know his place, he should have realised that such things were not for the likes of him; but really? Immoral? Sometimes it’s almost like we’re in an Orwellian world, there’s a disturbing kind of doublespeak going on sometimes. But it’s not almost like, it is doublespeak, no greater example of which has been the term Free Trade. Orwell’s doublespeak did come to be, and it works away insidiously.
So, here and around the world, governments, and public goods, are in massive debt, and having to service debt, and nations are beholden to govern in a straitjacketed way, restrict public services, remove people either from employment or their current wage level, take away everyone’s security of employment, drive down labour costs. And if they don’t do this, the penalty is to lose credit rating from the god-like rating agencies, and then have to pay even more money to service the debt. All the while, money is streaming upwards from below to the rarefied summit. While everything is failing, it’s still growing exponentially at the top.
George Monbiot said in Stripped Bare in February, 2011:
An economic war is being fought here. Wealth is being transferred from the poor and middle to the rich at stupefying speed and on a stupefying scale. The financial sector seeks to wring every drop from the productive economy, heedless of the eventual impacts. The government is there to help.
But it is imaginable that no one is actually trying to do this, it is just the successful working and eventual logic of the systems which we live by. A system that nourishes and feeds from humankind’s baser elements.
Obviously, we completely lost control of this state/bank/corporate/military/nuclear/hydrocarbon beast a long, long time ago and it’s grown into a ravenous monster, and it’s going to be a job to get it back in its box now. But we think it’s just some bad magic spell we’re under, that if enough people become conscious of it, it will just disappear.