Tax Break

John Fisher, international tax consultant

Archive for the month “January, 2014”

A dope makes a hash of things

Not funny? Charlie Chaplin was a genuine fan

Not funny? Charlie Chaplin was a genuine fan

Depressingly, whenever I mention British Humour (sic) to an American  I receive the stock response: “Benny Hill!” I used to fight back, arguing that Hill’s humour was cheap smut eventually only permitted for export (to America), while true British Humour was a cerebral affair of the utmost sophistication. Balderdash!  I was kidding myself. Benny Hill was a late 20th century take on the Bedroom Farce genre that had been highly popular since late Victorian times and reached its zenith in the 1960s in the person of Brian Rix and his famously dropping trousers. One of the main ingredients of a Bedroom Farce is that the acting is frenetic with the audience  not given time to think; all laughter is on impulse, à la Benny Hill.

They are generally a lot worse

They are generally a lot worse

The one and only time I attended a Farce was at the impressionable age of 14,  in August 1972.  All I can remember is that “The Man Most Likely To..”  staged that summer season at the end of Bournemouth Pier, involved lots of slamming bedroom doors and Henry McGee, Benny Hill’s long-suffering straight man, displaying his naked derrière to a guffawing audience. On leaving the theatre, apart from a roaring trade in beach balls and rock candy, there was an ample selection of Robert McGill’s saucy postcards featuring cartoon depictions of leering men and buxom ladies from a bygone era – quintessentially British smut. (If you are ever looking for a sure way to get an Englishman to snigger, just say the word “Bottom” in a suggestive tone – disappointed punters guaranteed their money back).

While Lord Rix’s 90th birthday next week would be reason enough to bring Bedroom Farces and Benny Hill to mind, I admit that the recollection  had more to do with the antics of the current hapless occupant of the Élysée Palace. It is apparent that President Wheredidiputmyshoes  has – Ooh La La! – been banging rather too many bedroom doors in the course of his career, and has lately been having acute difficulty  deciding where to wake up. This moral confusion must surely be taking its toll on his already abysmal record in running the country. Take, for example, his New Year speech in which he had an epiphany and all of a sudden said that everyone was paying too much tax. A noble line for any sane Frenchman but, lest we forget, he is actively clobbering high income earners this year with a 75% marginal tax rate (albeit levied on employers) that was finally approved by the Constitutional Court as they kissed goodbye to 2013. This ordinary man  never actually married so, technically free to wander, does not appear to have any guiding star. If France is not careful, he could lead the entire nation into the River Seine (the Left Bank of which God is unlikely to split for those Gitanes-smoking Parisian intelligentsia).

"I said POT Shop!"

“I said POT Shop!”

Across the pond, the Americans are having their own problems with their moral compass. On January 1, Colorado became the first State to permit recreational marijuana. I don’t know whether  weed is a good thing or not (I do really, but I don’t want you to think that I am a narrow-minded tax accountant). What is clear , however,  is that this thing has not been thought through. Because growing, processing and selling pot are still Federal offences, and despite Washington stating that the Feds will hold off – if you are a Coloradoan wanting to feed your habit with a little sideline in cultivation, you will not be able to open a bank account due to federal money laundering rules. If you cannot open a bank account, you will have difficulty running a kosher business in the stuff – meaning that you are unlikely to pay tax. And while we are on the subject of tax, Big Brother has to decide where pot should be classified in the  excise tax hit parade. Does the fact that alcohol leads some people to kill while marijuana leads others to float, mean that it should be taxed more lightly than alcohol, which for some (like me) is a little hard to swallow? At present the state tax on cannabis is much higher than on alcohol. And what about when comparing a joint to a publicly ostracized cigarette?

When I read about Western Government decisions these days – from muted reactions to Syria and Iran to juvenile brawling on Capitol Hill – I  picture the entire Western World on its back  floating calmly down a river late at night, reefer in mouth and girl at each side, not quite managing to focus on the shining stars in the clear night sky and blissfully unaware of the waterfall ahead. There must be a moral in there somewhere, or maybe not.

Saving Income Tax

Learning the dangers of offshore structures

Learning the dangers of offshore structures

Early in my tax career, in my role as stenographer, porter and punkawallah to the great and the good, I was instructed to join one of the senior partners at a meeting with Roy E. Disney’s right-hand man. The conversation was going well (I had a walk-on part taking notes and fluttering my eyelashes, or whatever pseudo secretaries were supposed to do in those days) until the partner dropped a fatal clanger. Discussing the need for substance in the international structuring of the proposed investment, he mentioned that the tax authorities did not take kindly to…wait for it…Mickey Mouse Companies. As the orchestral tumult of Fantasia’s  Sorcerer’s Apprentice banged about inside my head, I sheepishly looked up to observe the silent visitor barely controlling his taut facial muscles. “Please do not refer to Mickey in that way,” he eventually complained. “Mickey is very close to our hearts.”

Where did this Disney character hide her floppy ears?

Where did this Disney character hide her floppy ears?

I recalled that incident recently on a rare visit to a movie theatre (my cinematic repertoire over the last decade has been generally restricted to Messrs Batman, Bond and Potter in various incarnations, shapes and sizes). The occasion was the local release of “Saving Mr. Banks”, loosely based on the negotiations, over half a century ago,  between Walt Disney (uncle of the famous Roy)  and PL Travers for the film rights to Mary Poppins. History is written by the victors and this was a Walt Disney production, so I suppose, even though this was a live-action movie about the making of a live-action movie,  I should not have been surprised to see that bloody mouse coming out of the woodwork at every opportunity, not to mention Walt’s (you have to call him Walt – Mr Disney, we are comfortingly told,  was his father) repeated declaration that Mickey is family.

Rereading the first two books on which Mary Poppins was based before attending the movie, I was reminded how much children’s literature has changed during my lifetime. Although not in the same league as Noddy or Tintin, Poppins has its moments of political incorrectness. An example was the housekeeper’s objection to  the soot-encrusted Chimney Sweep (not Dick Van Dyke’s Bert – Julie Andrews’ platonic friend – who was an amalgam) grabbing her arm: “Ow! Let me go, you Hindoo!” Now, two exclamation marks in one short exclamation is unfortunate, but use of the ancient derogatory form of “Hindu” is unforgivable. Nobody would, for very good reasons, get away with that sort of thing today nor, evidently, for that matter, making disparaging comments about an oversized rodent. However, it would seem some things are still fair game. And one of them is “close to my heart”.

Mr Banks of the books is in a perpetually bad mood (the title of the film alludes to that, but I am not in the mood for spoiler alerts so prospective cinema-goers fear not); if it is not because the household gopher has brushed his bowler hat with  polish, it is because he has prepared him non-matching shoes. His biggest blow-out however is over his mislaid bag which his goofy wife locates in the study. Demanding to know who had moved it there, she replies: “You did, my dear, WHEN YOU TOOK THE INCOME TAX PAPERS OUT OF IT LAST NIGHT”. Later in the book she refers to “that AWFUL INCOME TAX”. Say no more; ignorant cow.

I must say that I do not remember many protests against Mrs Travers’s racial prejudice but, one thing is for sure,  there was not even a murmur over her subversive statements about taxation. Isn’t it bad enough that, as kids growing up, we burned with resentment over the annual  sacrifice of a whole early evening’s Children’s TV in favour of a load of boring nonsense called the Budget (in a dreaded election year that crime was committed twice)? Is it really appropriate for our children’s literature to be laced, Tea Party style,  with incitement to revolt? And what are they supposed to be revolting against (as French students have been asked many times in their history)?

Tax is an essential part of modern civilization. Tax is of the people, by the people, for the people.  Tax is no less critical to the moral fibre of 21st century society than Freedom, Democracy and Mandela. But we continue to educate our kids to write it off as bad. (Please note: tax accountants have not yet found a way to write-off taxation but I can assure you, as the consummate hypocrites we do not admit to being,  we are working on it). The time has surely come to excommunicate those who denigrate taxation. It is time for our youth to sport tee-shirts announcing: “My Friend is a Taxpayer” or “Tax is Beautiful” or, for the truly courageous, “I Believe in Safe Tax”.

When you see the whites of his eyes - shoot!

When you see the whites of his eyes – shoot!

While, thankfully,  the time came long ago for the banishment of racism and mockery of the afflicted, I want to stick my neck out and make one exception: Americans (other than Meryl Streep) trying to imitate an English accent. Such people should be pilloried until they give up or die or both. The most dreadful specimen in movie history was, of course, Dick Van Dyke’s diabolical cockney cock-up in Mary Poppins. It bothered me when I saw the movie as a 6 year-old and it still bothers me today. But, in the Disney World, there is one thing perhaps worse. Exactly 10 years ago this month, our family spent a week in Orlando. Despite the cynicism that, I am informed by friends and family alike, oozes out of my very essence (I am sure they are wrong), that was one of the most amazing weeks of my life, not to mention that of the kids. A few years previously we had been to EuroDisney in Paris. Mickey Mouse and Merlin in French? Forget your husband’s bag, Mrs Banks. Why can we never find a guillotine (or better still, an atom bomb) when we need one?

Don’t Mention The War

It is comforting to know that the western world is in safe hands....

It is comforting to know that the western world is in safe hands….

1/1/14. Typing the date, I am paralysed with fear as I imagine myself, pencil in fingerless-gloved hand, writing home from a rat-infested trench in the fields of Northern France (rats are one thing – but France?). Even the quality press has added to my waking nightmare. Both the New York Times and The Economist got in early last month, running articles explaining the clear similarities between 2014 and 1914 and cautioning against complacency that might lead to history repeating itself. This is potty nonsense –  First World War Redux would never be as frightening as the original because, apart from anything else, it would be in colour.



But even those Yuletide broadsheet offerings were positively sane when compared to the leader The Economist ran for – what I think was – the 90th anniversary of the Great War in – what must have been – July 2004. Heading for our summer haunts,  we readers were requested to look around the crowded beaches and spare a thought for all those never born due to the 1914-18 carnage who, otherwise, would presumably have been sunning themselves on the sand next to us. There are lots of reasons that people are not born, or should not have been born,  but I wonder if those poor Anzac soldiers landing on the beach at Gallipoli in 1915 realized they were sacrificing themselves so that future generations of sun-worshippers could slop on sun-screen and frolic around on that self-same beach in their Speedos and Bikinis.

I prefer to try to look ahead to 2014 a little more hopefully. Today there are massive threats, very different to those of a hundred years ago, but since the end of the Blockbuster sequel to World War I ( imaginatively named World War II ) there have been major strides forward in international cooperation leading to peace and brotherhood among men.  There was a small, but not insignificant, step forward in the dying weeks of 2013 in the Doha Round of Trade talks held in Bali, Indonesia.

End of the Kennedy Round

End of the Kennedy Round

The General Agreement on Tariffs and Trade (GATT) was established in 1947 to deal with issues of trade and, specifically, break down the barriers caused by tariffs, quotas and import bans. Each “Round” of talks, often with exotic names like The Kennedy Round and The Uruguay Round, has specific goals which, when achieved, mark the end of the Round. In the early days, when a relatively small number of  countries could dictate to the world, Rounds lasted a matter of months.

Well, the Doha Round has been going since November 2001 and involves 159 countries (the GATT morphed into the WTO during the previous Uruguay Round). Charged with a long list of goals including tariff reductions, non-tariff measures, agriculture, labor standards, environment, competition, investment, transparency and patents, as at the beginning of December 2013 it had achieved…. precisely nothing. Then came the breakthrough. Under the expert guidance of the new Brazilian WTO Director-General, the 159 countries compromised their way to an agreement on trade facilitation which essentially meant cutting red tape and, hence, trade costs – a move that some estimate could raise global output by $400 billion annually. It remains to be seen what effect this will have on the number of Customs Officials in the Green Lane at airports around the Globe, so don’t hold your breath.

Moving forward, the Doha Round  is expected to concentrate on the less controversial issues (I am not quite sure what it has been doing for the last 12 years) and support Plurilateral treaties (involving blocks of countries ) such as the proposed Free Trade Agreement between the US and EU.

Of the 9 Rounds so far, the most efficient, measured by length of time over number of participating countries, was the Torquay Round in 1951, lasting 8 months and involving 38 countries. I have a sneaking feeling I know why.

In case you are not aware, Torquay is an English seaside resort. I last visited Torquay in 1965 and until thinking about this Post had no interest in ever going back. When John Cleese and the Monty Python  team filmed on location in  Torquay in 1971 they stayed at the Gleneagles Hotel, which had been established by Donald and Beatrice Sinclair in 1964. It is quite possible that some of the delegations to the 1951 opening conference stayed at the Sinclair’s other hotel, Greenacres, opened immediately after the War. In TV  interviews John Cleese and Eric Idle later told of Sinclair’s eccentricities: not liking a comment by one of the team, Sinclair threw his suitcase out of an upstairs window; in reply to a guest who asked when the next bus was due, he chucked a bus map at him. Cleese said he was the rudest person he had ever met. But, thanks to that chance encounter, arguably the greatest sitcom in the history of television was born – Torquay’s own Fawlty Towers, with Basil Fawlty playing Donald Sinclair (Cleese told interviewer Sir Michael Parkinson that the only adjustment he needed to make to Sinclair for the part was his height).

Was it something he said?

Was it something he said?

Sitting here now, I can picture a bunch of post-war Continental Europeans partaking of their meal  in the dining room of Greenacres while Donald Sinclair  goose-steps around declaring: “Don’t mention the War”. It would be enough to get everybody to agree about everything just as long as they could check-out and get back behind the Maginot Line as soon as possible. A Happy and Peaceful New Year to us all.

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