Tax dodgers are poverty creators

Let me make clear from the start that by 'tax dodgers' I mean tax avoiders and well as tax evaders. The former is not unlawful and the latter is. But the former ought to be, and this post is about why it ought to be. Recently, companies such as Amazon, Starbucks and Google have been taken to task for tax avoidance. All three companies were hauled up before the Public Accounts Committee, and their responses to questions about tax avoidance were woefully inadequate - see this excellent account of the proceedings by Richard Murphy in which he said:

"For Amazon things were much worse. Its rep could not justify how an order made in the UK for a product in a UK warehouse, shipped by UK staff through the UK post and with a bill enclosed printed in this country could somehow have anything to do with Luxembourg. Despite this he had the gall to claim tax must be paid where the economic substance of the deal was – even though Amazon does nothing of the sort."

Tax avoidance means that this country loses money which we badly need to pay for infrastructure, education, health - and, as you know, the list goes on. But by dodging tax, these companies are not only shrinking the UK tax base, and therefore dumping more of the tax burden onto individual taxpayers, they are also killing off British retailers which are based here and pay their full  taxes. This isn't creating jobs, its costing jobs and the profits made in the UK are siphoned off abroad. Corporate tax avoidance is nothing more than a race to the bottom where corporations swan around the globe looking for the cheapest tax rates and playing one country off against another in the process. Its not much more than a form of robbery and we are the ones who are being robbed.

Stupidly, politicians in different countries are playing the corporations' game as they compete with each other to get these tax dodgers based in their country. What they should be doing is deals with other countries to set a standard corporate tax rate so that the corporations cannot gain advantage. It looks at that that British industry is beginning to wake up to this scam and beginning to fight back. Polly Toynbee reported in the Guardian:

"John Lewis's managing director is calling on the Treasury to demand tax is paid in the country where profits are made: Amazon made £3.3bn in sales but paid zero UK corporation tax on any of the profits of that income. "They will out-invest and ultimately out-trade us," tax-paying John Lewis protests, unable to compete fairly with tax-shirkers."

Th reality of 21st century capitalism is that it is no longer productive. It doesn't create as much real wealth any more. Profits from companies like Amazon aren't re-invested in useful economic activity. They are spent by investors on, yachts, financial schemes and property booms. So huge has non-productive financial capitalism become globally that it completely dwarfs the productive economy. Far from being wealth creators, these companies will increase poverty in the countries they are shafting, like the UK, and we will be the losers. Our spineless politicians need to get a grip, and fast. It ought not the be beyond the wit of the EU countries to agree a corporate tax rate of £25% and to clear out the tax havens which are causing so much damage to our economy. Do it, and do it soon! Meantime, if you want to get involved join the UK Uncut demo on 8th December!

The government that nobody wanted is doing what nobody wants

We have just had two very grim days in succession. First, from this reactionary government, we get Black Tuesday, the dismantling of the NHS, something that the Tories have dreamed about for decades. Now, today, we have had yet another class war budget which benefits the rich and corporations at the expense of the rest of UK society. A budget which contains £20 billion of disguised cuts for corporations.

But this is a government that nobody voted for,and has no mandate to make these changes. Much has been said about the role of the Liberal Democrats in propping up a Tory government, and despite the fact that people should feel betrayed and angry about that, the real problem is Cameron and Osborne, they are the architects of destruction of the public sector, and the 'free' market fundamentalist approach which is damaging our economic, environmental and social fabric.

What we have witnessed is a crisis of capitalism, caused by the market, and now being used as a weapon to destroy all the democratic gains made by ordinary people in the past century. This is the 'shock doctrine' in action.These measures are taking us backwards in time to 19th Century capitalism, an age in which the most vulnerable people, the sick, the unemployed, the disabled, and the low paid, will, like then, be abandoned to the vagaries of the market. In the USA, there are  already shanty towns and tented villages, and make no mistake, that will happen here. We will see slums in the UK, where the poor and disadvantaged, live in abject Third World levels of poverty. Don't believe it? These things are already happening in Greece, which is the front line of  'free; market austerity. The British people need to wake up and smell the very bitter taste of Coalition coffee.

What's the solution? We have to make use of the democratic process and get out on the streets and protest peacefully to bring about change. The Egyptians have shown us the way. We need to turn Trafalgar Square into Tahrir Square. We need to work and agitate in the trade unions to build this protest movement, and we need to make sure that the Liberal Democrats get wiped out in the next round of local government elections in May. There is hope, and protest groups like UK Uncut have shown the way forward. We need to work together use this pressure to crack open the Coalition, and force an election at which we can persuade people to vote for anti-austerity parties like the Green Party and TUSC. We are in the fight of our lives and we need to make this fight count.