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Government Solutions
Sword Control Now!
UK swordsman wounds MP and kills his aide.
AN MP was wounded and his assistant stabbed to death last night when a man
wielding a sword carried out a frenzied attack during a constituency surgery.
Nigel Jones, the Liberal Democrat MP for Cheltenham, was holding his weekly
surgery at his party's headquarters in the town when the attacker, said to be
carrying a Samurai sword, stormed into his office. Constituents waiting to
see Mr Jones fled as the attacker rained blows on the MP and one of his
assistants, Andrew Pennington.
Mr Pennington, the Liberal Democrat leader on Gloucestershire county council,
suffered multiple wounds and died shortly after the attack. Witnesses said he
had been trying to protect Mr Jones from the attacker. Mr Jones, 51, fled to
a nearby music store after suffering wounds to his hand and arm. He was
detained in Cheltenham General Hospital but was not seriously hurt and said
to be "extremely well".
The attacker was said to have walked calmly out of the building. Last night
police were questioning a 49-year-old Cheltenham man. The attack happened at
4.30pm in the Liberal Democrat offices in St George's Street in the centre of
the town. Mr Jones was with Mr Pennington when, according to witnesses, a man
walked into the MP's office at the back of the building and went "crazy".
Graham Norton, a resident in St George's Street, said his friend, David
Copson, cradled the dying man in his arms. Mr Copson had attempted to give Mr
Pennington the kiss of life, but he had bled to death from a wound in his
stomach. Mr Norton said: "When I came home my friend was white as a sheet
with shock. The man died in his arms. He tried his best to save him but he
said there was a hole in the man's stomach."
A senior local Lib Dem activist said he understood Mr Jones knew the attacker
and had been helping the man with some case work. The timing of the attack
seemed "a little early" because the surgery would normally start at about
5pm. He said: "The surgery is held in the ground floor of a former shop. The
front room is a reception and the door is usually locked. People have to ring
the bell before being let in, so it suggests the attacker was known to them."
Another eye witness said: "A man was inside with a sword. I saw this figure
walking towards us and we raced out of the way. He was covered in blood. I
backed out and he put the sword behind his back and fled up the street. I
followed him and phoned the police on my mobile. He was arrested outside by
unarmed officers."
Mr Pennington had been a councillor for 15 years and had also worked as a
constituency agent. Alexis Cassin, leader of Cheltenham borough council
Liberal Democrats, said: "He would not have given a thought to his own safety
if there was somebody else there to protect. He would have done that for
anybody, no matter who it was. He was totally committed to other people - the
community was his life. He lived for it. He will be greatly missed by this
town."
Mr Pennington was a single man. His fianc�e died eight years ago. Last night,
the Liberal Democrat leader Charles Kennedy expressed his shock at the event.
He said: "MPs make themselves available to all their constituents. It is
tragic that an MP and his staff carrying out their duties should be subjected
to an appalling attack of this nature."
Don Foster, Lib Dem MP for Bath, said: "This is an absolute tragedy beyond
words." Mr Jones was elected MP for Cheltenham in 1992 in controversial
circumstances after the Tory's decision to select a black candidate, John
Taylor, provoked a local party backlash. He increased his majority in the
last election to 6,645.
Mr Jones, who is twice married and has three children, is the Liberal
Democrat's front bench spokesman on sport. John Todman, the Conservative
leader of Cheltenham council, said: "There is very great shock at the news."
Last night the mother of Rob Ashman, the man being questioned by police, said
he had recently suffered a marital collapse and his sister had died. He had
also been in hospital after two cycling accidents. She said: "This is a
build-up of a lot of things that have gone wrong for him," she said. His
father, Geoff, said: "He's the type of person who helped everybody out, but
when he needed someone, there was no one there for him."
The London Telegraph, January 29, 2000
The Decline of the Nation-State
The Vanishing Taxpayer
Taking blood from the vampire.
IT WAS not a pretty sight. In 1839, the roads of Wales were crowded with men
wearing women�s clothes, in an obscure reference to a story from the Bible.
By the time they were back in their usual attire, several turnpikes (tax
collection points) had been demolished. During the following five years,
these �Rebecca rioters�, as they became known, donned their frocks and
smashed turnpikes many times, doing what most taxpayers before and since
could only dream about. But now some governments are starting to worry that
globalisation, spurred by the Internet, will do to their tax systems what
those transvestite Taffies did to the turnpikes.
Like the boy who cried �wolf�, governments have raised the alarm about
globalisation so often that their credibility is in doubt. For all the talk
of footloose capital heading for low-tax countries, starting a �race to the
bottom� in which governments slash taxes and services to lure global
business, the taxman�s cut of world income is larger today than it has ever
been. Yet in the story the wolf eventually did attack the sheep, and the
boy�s shouts for help went unheeded. Is the same thing about to happen to the
world�s governments?
It does not help that globalisation can mean many things to many people, but
a minimum definition would probably include a diminishing role for national
borders and the gradual fusing of separate national markets into a single
global marketplace. The term �globalisation� was probably first coined in the
1980s, but the idea has been around for a long time. Indeed, by some measures
the world was more globalised a century ago than it is now: certainly people
were far likelier to emigrate to find work. After an anti-trade backlash in
the 1920s and 30s, globalisation has been accelerating during the past three
decades. And thanks to innovations in communications and transport that let
people and capital travel at great speed, it is now moving into a different
gear altogether.
As globalisation ebbed and flowed, the taxman�s share of economic output went
relentlessly up, despite warnings from politicians that globalisation would
make it harder for governments to collect taxes and thus to provide public
services. But now a new factor has entered the equation: the Internet. It
epitomises borderlessness, and the irrelevance of being in a particular
physical location. By being everywhere and nowhere at once, it seems certain
to speed up globalisation. And in doing so, according to the Organisation for
Economic Co-operation and Development, it might damage tax systems so badly
that it could �lead to governments being unable to meet the legitimate
demands of their citizens for public services�.
Shopping around
The Internet age has dawned just as tax collectors are getting worried about
another aspect of globalisation: tax competition. Both the European Union and
the OECD have declared war on �harmful� low-tax policies used by some
countries to attract international businesses and capital. The OECD says that
tax competition is often a �beggar-thy-neighbour policy� which is already
reducing government tax revenues, and will start to be reflected in the data
during the next couple of years. The Internet has the potential to increase
tax competition, not least by making it much easier for multinationals to
shift their activities to low-tax regimes, such as Caribbean tax havens, that
are physically a long way from their customers, but virtually are only a
mouse-click away.
Many more companies may be able to emulate Rupert Murdoch�s News Corporation,
which has earned profits of �1.4 billion ($2.3 billion) in Britain since 1987
but paid no corporation tax there.
This survey will seek to discover whether all this poses a real threat to tax
revenues. Inevitably, this will involve a good deal of speculation. The
Internet is still young, and nobody can know how big it will grow. For the
taxman, its increasing use raises two main challenges. The first is unique to
the Internet. The World Wide Web is an entirely new channel for moving goods
and services from producers to customers, and taxing virtual goods and
retailers is much more difficult than taxing physical ones. Music can now be
downloaded via the Internet, from a retailer located who knows where, without
a need for discs or tapes. Other products may similarly dematerialise, making
it hard for the taxman to pinpoint them. New Internet taxes, such as the
proposed �bit tax�, levied on the volume of electronic transmissions, make
little sense, and would face huge political opposition from those who want to
keep the taxman out of cyberspace�including some American presidential
hopefuls.
Taxpayers, too, may dematerialise. In a famous New Yorker magazine cartoon
showing two dogs sitting in front of a computer screen, one tells the other:
�On the Internet, nobody knows that you are a dog.� The ability to collect
tax is contingent on knowing who is liable to pay it, but taxpayers may
become increasingly hard to identify as anonymous electronic money and
uncrackable encryption technology are developed.
As almost everybody knows, there are two ways of cutting your tax bill. Tax
avoidance is doing what you can within the law. As a great American judge,
Learned Hand, put it, �There is nothing sinister in so arranging one�s
affairs as to keep taxes as low as possible. Everybody does so, rich and
poor; and all do right, for nobody owes any public duty to pay more than the
law demands.� Tax evasion is what happens outside the law. There may be a
thin line between the two, but in one sense it is a solid one: as Denis
Healey, a former British chancellor, once put it, �The difference between tax
avoidance and tax evasion is the thickness of a prison wall.� The Internet is
likely to make it easier to break the law.
The second challenge the Internet raises for the taxman is its potential for
intensifying tax competition between governments. Tax collection around the
world is built on the belief that every nation-state has the right to decide
for itself how much tax to collect from the people and businesses within its
borders. Governments may be willing to pool their sovereignty by joining
international bodies such as the UN, the IMF or the EU, but they cling to
their right to set their own taxes. Even in what some see as the nascent EU
superstate, member countries refuse to give up their control of direct
taxation.
Competing visions
Many countries have bilateral tax treaties with other countries, mainly to
avoid double taxation. But again the rules of such treaties assume that the
nation-state is what counts: they merely determine which nation-state has
priority where more than one country has a claim. Multinational companies
complain that nationally based taxation inhibits them from operating as truly
global businesses. But for governments, it makes sense to design tax systems
that attract footloose wealth.
Tax competition raises three big questions which this survey will try to
answer. First, is there really such a thing? Some pundits doubt that
tax-cutting governments are indeed motivated by hopes of poaching economic
activity from other countries. Yet, as we shall see, there is enough evidence
to suggest that tax competition should be taken seriously, and that without
intervention it will only get fiercer.
Second, can it be stopped? It will not be easy. Not many people will defend
tax havens. But although they make fine whipping boys, tax havens simply do
in a more extreme form what many �respectable� governments themselves
increasingly indulge in. Ireland opposes harmonising corporate tax rates in
the EU because its low rates give it a competitive edge. Britain blocks an EU
savings-tax directive because it might hurt the City of London. Luxembourg
and Switzerland will not agree to share information with foreign tax
authorities because people who want to cut their tax bills come to them
looking for discretion. And America may well ask for a worldwide ban on new
Internet taxes because as a net exporter of e-commerce it would be the
biggest beneficiary.
Some policymakers think that a World Tax Organisation should take its place
alongside institutions such as the UN, NATO, IMF, World Bank and World Trade
Organisation (WTO). But tax nationalism is likely to ensure that this will
not happen. The OECD lacks sufficient clout, especially over non-members. The
EU has a better chance of curbing tax competition among its own members, both
through its directives and through the European Court of Justice, which is
steadily, if slowly, enforcing tax harmony in the name of the single European
market. But any success the EU achieves internally may simply make it more
vulnerable to tax competition from non-EU countries.
Third, is tax competition really so bad? The OECD thinks it could undermine
democracy by stopping countries from pursuing the tax policies their voters
want. Footloose capital is free-riding on less mobile taxpayers, getting the
benefit of services provided by governments in higher-taxing countries while
paying taxes in low-tax jurisdictions, if at all. The EU objects mainly to spe
cial tax treatment offered to some taxpayers but not others, on the ground
that it interferes with the single market. Some EU governments also argue
that tax competition makes it ever harder to tax mobile factors of production
such as capital. Instead, they complain, they have to increase taxes on less
mobile factors, notably labour, which may drive jobs away.
Charles Tiebout, an American economist, argued back in the 1950s that
competition between governments can be as good for everybody concerned as
competition in any other marketplace. Like companies, governments can compete
by offering different combinations of public services and taxes; if people
want bigger government and are happy to pay for it, they are free to choose
it, just as some people choose a snazzier car, or fly business class. Tax
competition will put pressure on governments to provide their services
efficiently, but that need not mean they have to be minimal. There are
limitations to this theory, notably Tiebout�s assumption that every taxpayer
is mobile, and can vote with his feet. In reality, richer taxpayers tend to
be more mobile than poorer ones. If tax competition becomes stronger, using
the tax system to redistribute money from rich, mobile taxpayers to poor,
less mobile ones may become worryingly hard. The Internet will make more
people mobile, rendering the rest even more wretched.
The Economist, January 29-February 4, 2000
-----
Aloha, He'Ping,
Om, Shalom, Salaam.
Em Hotep, Peace Be,
All My Relations.
Omnia Bona Bonis,
Adieu, Adios, Aloha.
Amen.
Roads End
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