So, the piece offered by Robert on the 6th showing corporate spin-offs,
controlling interests, etc. ties in well, and the corporate dollars just
keep rotating around the planet in some kind of limbo; not being taxed
by anyone and readied on the bank ledgers to gobble up more of the pie
or be skimmed (bonuses) for personal use.
Good follow-up Robert.
D.
On 10/12/2011 5:21 AM, Robert Stennett wrote:
http://ipsnews.net/newsTVE.asp?idnews=105427
SPAIN: ‘Rich Must Share Cost of Crisis’
By Raquel Martínez
*MADRID, Oct 12, 2011 (IPS) - As global working-class outrage against
corporate capitalism explodes in organised protests around the world,
scores of citizens in Spain are demanding an end to tax breaks for the
wealthy.*
At a time when austerity measures have slashed public spending on
essential services such as healthcare and education, thousands of
people in over 166 cities across Spain, loosely organised around the
15-M movement, have been calling for higher corporate taxes, so the
wealthy can "share the cost of the crisis."
Disgruntled citizens also called for a referendum to decide on the
advisability of constitutional reforms that established a cap on
Spain’s public debt, which currently stands at 702 billion euros at an
annual cost of 25 billion million euros, according to the Bank of Spain.
Despite these demands, the reforms were negotiated without a referendum.
The bulk of the country’s tax burden falls on the shoulders of middle-
and working-class people, who currently fork out 80 percent of their
wages in Personal Income Tax (IRPF), according to the Organización de
Inspectores de Hacienda del Estado (IHE).
Francisco de la Torre Díaz, spokesperson for IHE, told IPS, "The
economic crisis has (exacerbated) tax disparities in two ways:
firstly, through the increase in indirect taxes (like the Value Added
Tax, or VAT) to 18 percent, which is regressive by nature; but mainly
because of the significant decrease in corporate taxes."
Last month, in what many believe to be a token gesture, the patrimony
tax, or property sales tax, which was abolished by the government in
2008, was reinstated for the next two years to alleviate tax pressure
on average wage earners.
But the added weight of this tax on the total taken in by the Agencia
Tributaria (AEAT), an office similar to the Inland Revenue Department,
is negligible – less than 0. 5 percent, according to IHE.
"Most (of the big) ‘Forbes magazine’ Spanish players are barely
affected by this tax, since a large amount of their patrimony is not
tributary," Torre Díaz said.
"The taxes extracted from the highest incomes earners, a large
percentage of which are companies, have been steadily decreasing over
the years," he added.
"Between 2007 and 2010, corporate tax collection had dropped by 64
percent, meaning the state went from receiving nearly 45 billion euros
to less than 16 billion euros," he added.
This represents a significant loss of revenue to the government, funds
that could be utilised to subsidise the public programmes currently on
the chopping block.
In addition, the Observatorio de Responsabilidad Social Corporativa
(Spain’s observatory on corporate social responsibility) estimates
that a full 80 percent of the companies on IBEX 35, the stock market
index of Spain’s principle stock exchange, have money in tax havens.
Susana Ruiz, policy advisor for Innovative Financing and Private
Sector Campaigns at Intermón Oxfam, pointed out the dangers of
promoting investment abroad by Spanish companies, while simultaneously
maintaining lax standards for taxing them at home.
"Stronger accountability measures should be put in place to avoid tax
evasion by these big companies," she told IPS.
"Their opaque structures not only allow the diversion of profits on
which taxes should be paid domestically, but also encourage money
transfers to tax havens, which enables corporations to dodge tax
payments in developing countries where they are carrying out their
main productive or extractive activity," Ruiz added.
A further cause for alarm is the lack of political will among the
Group of 20 (G20) – representing some of the most economically and
politically influential industrialised and developing nations – to
bring an end to these fraudulent practices, which have dire ripple
effects like massive drugs and arms trafficking.
The ‘country by country reporting requirement’, that demands that
multinationals present detailed accounts for each and every country of
operation, have not even been included in the G20 agenda for the next
meeting slated to be held in France, Ruiz said.
Aside from multilateral efforts, the Spanish government itself has
considerable leeway to restock its state coffers, according to
economist and development expert Manuel de la Iglesia-Caruncho,
He told IPS that according to the most recent figures released by
Eurostat, the statistical office of the European Union, the average
income of 27 EU countries rose by 35.8 percent of GDP in 2009, while
Spain grew by just 30.4 percent.
Iglesia-Caruncho stressed the necessity for the wealthiest
corporations to correct the country’s many deficits by paying higher
taxes. Fair tax payments by corporations would lead to a reduction in
the fiscal deficit, an end to runaway speculation in financial markets
and an immediate improvement in public services, he said.
"But only," he cautioned, "on the condition that these additional
resources are used efficiently in employment- and knowledge-generating
activities such as investment in productive and social infrastructure,
health, education, research and development (R&D) or the environment."
Iglesia-Caruncho also challenged the dominant argument against tax
increases – based on the notion that withdrawing resources from the
private sector would deprive economic operators of incentives, thereby
leading to an overall reduction in consumption – by pointing to the
example of many Scandinavian countries that collect high taxes and
still enjoy high growth and consumption.
These states, he added, are protected from market shocks and failures
by properly redistributing social wealth.
Corporate adherence to fair tax standards will not necessarily lead to
a contraction in economic activity, since "aggregate demand is
maintained by increasing public expenditure and encouraging economic
operators to continue investing," the expert said.
The Spanish Parliament has currently been dissolved prior to the Nov.
20 general election. However, despite the period of relative
government inactivity many believe that, at the very least, the crisis
has sparked a lively public debate that has put the necessity of a
fairer and more just tax system back on the table. (END)
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