Tax Break

John Fisher, international tax consultant

Archive for the tag “British Humor”

Celebrity Squares

1101500102_400Adolf Hitler is, for me, ancient history, while Churchill is almost pinchable. Why the distinction regarding two implacable foes, the height of whose infamy and fame coincided exactly? It is simply because, by the time I was born, Hitler had been dead for over a decade, while I remember Churchill’s funeral,  50 years ago next week, vividly. Hitler was in black-and-white. Churchill was in colour.

We tend to think back on our childhood as steady-state. I was 10 years old when Colour TV came to Britain and  have always thought of it as a major revolution in British life. In fact, although the BBC had started broadcasting in 1936, few homes had TVs until around 15 years before Colour hit the living room. The story of the last hundred and fifty years has been one of continuous change.

Change has been as true of Celebrity as of any other field. Although the early twentieth century brought images of mute silver-screen stars to the world’s movie theatres, it was Charles Lindbergh who, thanks to his groundbreaking transatlantic flight in 1927, was the first true international celebrity. World leaders were not seriously heard until the 1930s, so that, when the British people had the lion’s heart in the dark days of 1940, Churchill’s roar was quite a novelty. It wasn’t surprising that the Old Man was crowned Time Magazine’s Man of the Half-Century in 1950 (he was beaten for the full century by Einstein), or that he was later voted, almost by acclamation, as the Greatest Englishman, whatever that may mean.

High Flyer

High Flyer

Through the second half of the twentieth  century, celebrity had two significant branches – entertainment and glitzy wealth on the one hand, and politics on the other. If you were not an embarrassing extrovert or a politician, you could expect to live your life in blissful anonymity. Then came the Information Revolution. Everybody was out there with the potential to reach the world – even if the world wasn’t really that interested in being reached by most of them. But who cared? It was cheap and worth a go.

Which brings me to my point. I am a tax advisor. I am, despite what it says in the sub-headline to this blog, boring. Tax advice is something to be practiced behind closed doors by consenting adults. Should I ever become a celebrity, it will not (or at least, should not) be because I dispense advice about the laws and practices of taxation.

But, it appears, the times they are a’changing. After the OECD Centre for Tax Policy and Administration aired its maiden internet TV broadcast last year, its head – the drop-dead gorgeous Pascal Saint-Amans – has now been declared Person of the Year by none other than Tax Notes International (which you will be forgiven for never having heard of). In a wide-ranging interview on the progress of the world-famous BEPS project, he declares that he is ‘the luckiest person in the tax world’. Now, go steady there, Pascal. A tax attorney who pocketed a $10 million success fee might argue that you are in second place. We know you are an important bloke, and you and your team have to philosophise a lot about the future of taxation, but – as I have written in the past – philosophy is to international taxation what a bicycle is to a fish. You, and the world-famous Tax Notes International, may think that the BEPS project is up there with the Theory of Relativity and World War II, but frankly it isn’t.

Dazzling

Dazzling

When tax bureaucrats become celebrities – and I stress that I am sure Mr Saint-Amans is amazingly good at whatever he does from 9 to 5 – it is time to think about hanging up ones Oxford Shoes.  A good tax advisor is someone who has a broad view of the business and political environment around him. There is plenty more to read about than irrelevant bla-bla regarding  tax people similar to himself.

So I say to the editors and my fellow readers of Tax Notes International: ‘Get a life!’

 

Christmas Cheer

Charles-DickensThe spirit of Christmas Present materialized in the wake of the sensational success of  ‘A Christmas Carol’. Britain which, despite French whinging, was – in 1843 – the world’s superdooperpower, had been struggling with Christmas traditions and what-not for years. Dickens’s simple short story of a tyrannical, lonely employer mirrored against his put-upon employee (the latter having a loving, but tragic, family life) caught the nation’s mood. In a tale that, to borrow  from John Lennon, is more popular than the Nativity, the eponymous Scrooge eventually sees the light, and everyone – including the sick child that Dickens threw in for extra pathos – lives happily ever after. Amen.

The gifts didn't improve much over the years

The gifts didn’t improve much over the years

For me, a non-Christian, Christmas has long been defined by an event exactly 100 years ago today. The organized football match between the Allies and the Hun is probably apocryphal (nobody can agree on the score), but what is certain is that there was an informal truce on the Western Front for a number of hours on Christmas Day 1914. The Germans seem to have started it (as every good Englishman knows, they always start everything) by singing Stille Nacht (a passable translation of Silent Night). Before long, both sides were out of the trenches exchanging gifts of tobacco, black bread and buttons – and, just maybe, starting the Hundred Years War that has seen Jerry winning four World Cups to our one. (Fortunately, the World Wars went the other way.)

The truce over, the troops climbed back into their respective trenches and spent the next four years ensuring that at least 10 million of their number would never again sit around a Christmas tree exchanging gifts in the bosom of their families. Indeed, in December 1915, the order went out that any repeat of the events of a year earlier would result in a Court Martial and the Firing Squad, not necessarily in that order.

And THAT is Christmas. Once a year, mankind is enveloped in a vague haze that colours its eyesight and addles its brain. For a few short weeks, minds turn to gift-buying and peace and goodwill to all mankind. Come January 2nd, the miserable self-seeking world is back to normal  (from what I am told by Christian friends, it can start on Christmas afternoon when out-of-town guests – like three-day-old fish – start to stink). Someone who in mid- December would volunteer to save the world would, come  New Year, not give the drippings of his nose to a person dying of thirst.

Why do people insist on comparing me to these guys?

Why do people insist on comparing me to these guys?

This is the reason why, perhaps ironically, I believe in Taxation. While there are countless wonderful individuals and organizations out there who help the less fortunate, only the enlightened, collective self-interest of a people delegating the responsibility for its poor to its elected representatives, has the chance of ridding a country of the scourge of poverty. However enticing the Christmas message of peace and goodwill to all men sounds today (December 25th), Scrooge was right when he called it ‘Humbug!’

In any event, a heartfelt Merry Christmas to everyone celebrating today.

For Whom The Bell Tolls

Mr Turner wasn't always a Romantic

Mr Turner wasn’t always a Romantic

The scene – a church graveyard in Middle England. A respectable crowd, trussed-up in winter clothes, surrounds an open grave. As the coffin is lowered into the gaping hole, the priest declares: ‘The Mother of Parliaments gave, and the Mother of Parliaments hath taken away.’ A sharply dressed gentleman throws the first clod of earth onto the coffin-lid, almost obscuring the gold plaque: ‘Double Taxation Treaties 1872 – 2014. Taken In Their Prime. RIP’.

George, for that is the chief mourner’s name, turns towards the gate, followed by Dave, Nick and Ed. An intimidating, middle-aged woman tarries at the graveside, a sardonic smile engulfing her harsh face. ‘Margaret!’ calls Ed. ‘Move your arse. If we don’t hurry, the Tories will destroy the capitalist system before we  get the chance.’

Not fair. The lady is not gigantic

Not fair. The lady is not gigantic

Sounds gothic? Welcome to  Chancellor of the Exchequer George Osborne’s pre-election Autumn Statement (Budget Preview). After Labour MP Margaret Hodge successfully mauled executives of Starbucks, Google and Amazon back in 2012 over the immorality of shifting UK profits to low-tax jurisdictions, it was only a matter of time (election time, to be precise) before the Conservative Government sought to retake the moral high ground.

Many thought it enough that David Cameron had taken the lead in pushing the OECD BEPS initiative at the G8 Summit in Northern Ireland in 2013. Wrong. Last week his Finance Minister spewed out possibly the most radical piece of international taxation legislation since JFK nuked the world with the Controlled Foreign Corporation (CFC) on October 16, 1962 – the first day of the Cuban Missile Crisis (CMC).

google taxThe  Diverted Profits Tax – already affectionately  dubbed the Google Tax – will tax profits rightly belonging to the UK but currently denied it due to the inconvenient permanent establishment provisions of Britain’s double taxation treaties. It will also tax payments to low-tax jurisdictions unless there is a jolly good reason for them, irrespective of OECD transfer pricing provisions. In order to ignore the existence of a century-and-a-half’s worth of international agreements, the new tax is to be precisely that – a new tax, not a subdivision of the Corporation Tax. It will be levied at a higher (25%) rate and, Mr Osborne hopes, will be beyond the clutches of the EU, OECD and substantially every country participating in the United Nations General Assembly.

Happily, the legality of this aggressive move is to be examined by the Tory party’s nemesis – the European Commission. There are also strong arguments that the new tax does not succeed in side-stepping treaties, being ‘substantially similar’ to existing taxes.

What is hateful about the proposal – which has enormous support in the UK – is that it potentially undoes 140 years of international tax cooperation. Ironically, that cooperation was started by the British – the first ever double taxation treaty being concluded with the Swiss Canton of Vaud in 1872. Moreover, such international cooperation has never been more marked than in the last two years. The BEPS Action Plan, while unlikely to be implemented in all its detail, has, together with FATCA-inspired Automatic Exchange of Information, already started to shake-up the international scene in a big way.

Farage proves he can multi-task

Farage proves he can multi-task

So why has the British Government decided to risk bringing the whole international tax edifice crashing down, encouraging  other countries to retaliate with beggar-thy-neighbour treaty avoiding provisions? David Cameron has been a safe pair of hands as Prime Minister and is deserving of praise, but this latest gambit can only be explained in terms of cheap electioneering. It follows a developing trend that started with immigration bashing, and continued with threats to leave the EU. The paranoia of Britain’s ‘Knees up Mother Brown’, beer-swilling, fag-smoking UKIP party dodos has become contagious. Cameron did not see things done this way on the playing fields of Eton. The Prime Minister would do well to go back and read John Donne’s ‘No man is an island’.

Hungary for knowledge

What you get when people have no knowledge.

What you get when people have no knowledge.

1984 (the 326 page book, rather than the 366 day year of the same name) describes how a totalitarian regime could keep a lid  on knowledge through a Ministry of Truth, Newspeak’s Doublethink, and the dreaded Thought Police. Democratically elected governments have, traditionally, had more trouble in keeping a handle, let alone a lid, on their populations’ perceived excesses.

Of course, even democratic societies were not always as liberal as they are today. As I have written previously, until the middle of the 19th century, tolerant Britain applied punitive stamp duty to newspapers. The aim was to prevent the rabble from being able to afford to read the subversive political pamphlets that proliferated over the combined Hanoverian  reign of the various Kings George.

With the two World Wide Wars receding into distant memory, and the World Wide Web taking off in the 1990s, even hitherto totalitarian regimes had to adjust their bugging policies. The idea that it was possible to control the flow of knowledge started to look passé.

Hungary also had the best football team in the world

Hungary also had the best football team in the world

And then there was Hungary. Hungary, the country that had courageously revolted against the Soviets in 1956. Hungary, the country that led the way out of the Warsaw Pact and, in the 1990s, was a trailblazer for the new Europe. Hungary, the established member of the European Union.

Under its right-wing leader since 2010, Viktor Orban, Hungary has been looking increasingly smelly. Last month, the Government announced a draft law that would impose on internet providers a 150 forint (60 cent) tax on each gigabyte of data.  Coming as it did around the anniversary of the 1956 revolution, the people got quite shirty. Realizing that their internet bill was going up, all hell broke loose, and the other day Mr Orban had to backtrack.

Of course, the whole thing was probably a lot more sinister than that. A democracy cannot tell people what to think but, like the governments of all those German Georges back in the old days,  access to information can be squeezed by price.

The world fought long and hard for its freedom throughout the 20th century, including ridding itself of the Austro-Hungarian Empire. Freedom of expression, and access to opinions so expressed, is a critical part of that achievement.

Boy George who will be King

Boy George who will be King

A prominent Rabbi once told me that, when his grandfather fled a Russian pogrom early in the last century, he determined to make a new life in America. Stopping off for a few days in England, he went to Hyde Park’s Speakers’ Corner on Sunday morning. Standing on a soap-box, one of the many speakers was insulting Britain’s indolent King (not called George, but his son, grandson, and great-great-great-great grandson were/are). He decided that any nation  that allowed its people to freely criticize its monarch must be a great country and cancelled his plans to continue to the New World. Good choice.

Two deaths and a funeral

Taken too soon

Taken too soon

Last week news of two deaths brought sadness to members of my family. My lawyer son was devastated by the premature demise of  Adrian Mole aged only 47 1/52, cut down in his prime when his greatest years of mediocrity and failure lay before him. As Mr Mole was nearly 10 years younger than me I had never had the opportunity, as I picked at the acne spots on my unseemly teenage face,  to take comfort in the confessions he committed to his candid teenage diary: his obsessive love for the unattainable Pandora Braithwaite, his dismissive opinion of his utterly abominable dysfunctional parents and so on and so forth.

My own grief was reserved for Adrian’s creator,  Sue Townsend, who died on April 10 at the untimely age of  68 1/52.  Sue Townsend was one of a handful of this generation’s genuinely great comic authors. Her forte was social and political satire and, I admit, much of what she wrote made me want to throw up – which is probably a sign of how good it was. While the Adrian Mole series of books and her most recent “The Woman Who Stayed in Bed for a Year” prey on the dysfunctionality of the  British  middle class (lower and whatever else), “The Queen and I” cuts out the middle-class entirely; the deposed Royal Family are forced to subsist on social welfare while living on a filthy working class estate. Prince Charles gets arrested, while the Queen Mother has the down-and-out neighbours over for tea.

My personal favourite Sue Townsend novel is “Number 10”, in which a thinly disguised Tony Blair dresses up as a woman and tours the country with his police guard finding out what the public really thinks. The dearth of unattractive dysfunctionals, coupled with my eternal delight at seeing that particular Prime Minister dissed,  makes it an uplifting experience from beginning to end.

You couldn't make him up

You couldn’t make him up

My most-loved quote from that novel, and from the late, lamented Ms Townsend’s pen in general,  relates to when Edward Clare’s (Tony Blair’s) wife Adele (Cherie) has taken a fashionable breast-feeding break from a meeting on the subject of Irritable Bowel Syndrome at 10 Downing Street. Baroness Holyoaks of the Liberal Democrats (those wombats who are now in coalition with Dave Cameron) is striking up a conversation with Rosemary Umbago, the blind editor of the Daily Voice:

“…’I do think it’s marvellous how you manage with your visual impairment, Rosemary.’

“Rosemary snapped, ‘Oh please call it blindness. I really can’t bear those weasel words of political correctness. I’m blind, for God’s sake. I was born blind. I’m not one of those sensitive nouveau-blind people who keep whinging on about their precious sight loss.’

“Baroness Hollyoaks, mindful of Rosemary’s dislike of politically correct language, said, ‘So, Rosemary, I understand you are married for the second time to a South African. Is he a nigger?'”

Now, while you search for excuses as to how she could get away with that last line, although Townsend was born in Leicester – which has the highest ethnic minority population in the United Kingdom –  far from being black she could probably best be described as a “whiter shade of pale”. She was, however, blind – along with being plagued with a cacophony of other dreadful illnesses and impairments as well as a history of near-poverty. It may explain why her satire is so cutting and spot-on. It also speaks volumes about a remarkable woman who brought enormous pleasure to millions. The Taxbreak family will keenly miss Ms Townsend and her creations and while this Post has nothing to do with tax, it has everything to do with this Blog .

My condolences to the multi-ethnic inhabitants of Leicester on the loss of  a favourite daughter and, meanwhile,  Happy Holidays to those of you in Leicester celebrating Passover or Easter this week. (Anyone?)

 

 

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