Cicero's Songs

The last few years has seen a spate of "scandals" about the use of off-shore tax havens. The hacking and subsequent leaking of data about who does and does not hold assets in off-shore jurisdictions has become an old perennial in the British press, rather like the "COLD weather happens in winter and QUITE HOT weather happens in summer", whose alarmist capital letter laced headlines are such a lazy part of contemporary "journalism".  The increasing sophistication of the hackers, whether Russian-inspired or not, has resulted in a steady trickle of information becoming a torrent. After the relatively filleted release of data in the so-called "Panama Papers", the data release of the "Paradise Papers" is even larger.  Of course, just natural curiosity dictates that the off-shore ownership, or even just "ownership", of assets is of general public interest.  Celebrities, from the Royal family to the cast of Mrs Brown's Boys, ar...

Panama is not the world's largest off shore financial centre. Mossack Fonseca is not the worlds largest offshore lawyer. The scale of the leak of confidential information is huge, but in fact it represents the tip of the iceberg for the flow of offshore money it represents. The British Overseas territories, especially Bermuda (for insurance), the Cayman Islands and the British Virgin Islands (for trading funds) and the Channel Isles (for private equity and other fund structures) handle a much larger flow of funds. Panama is not the world's most trusted jurisdiction and as a result the level of criminal transactions could be a higher percentage there than in the UK controlled jurisdictions or Luxembourg or Malta. Nevertheless the fact is that the funds flows detailed in the stolen data are still a relatively small amount of global offshore transactions. The press in the democratic world is predictably outraged, and, equally predictably, is focusing on the wrong target. Sin...

George Osborne's budget was an incoherent collection of gimmicks. It was not designed with any other purpose but the promotion of its author and a certain faux stability ahead of the EU referendum in three months time.  So, easy to criticize, but the fact is that at the moment, no political party in the UK is prepared to suggest the kind of reforms that are needed. The political cycle is too short for any government to reap the reward of the kind of radical changes that are required, but not long enough for the same government to avoid the negative consequences that such radical reform will inevitably bring with it. So, successive governments merely tinker with the system, knowing that to do more carries greater risks and limited rewards in the short term. The cost of tax administration in the UK continues to increase, and the ever more complicated system imposes greater fiscal drag and ever more distortion of the economy. Incomes remain heavily taxed, while land is barely tax...

It is, or ought to be, true that a citizen who is full time employment should be paid enough to live on.  So, unlike many on the so-called progressive wing of British politics, I am not in principle a supporter of tax credits. To me. the fiendishly complicated system devised by Gordon Brown was not a "leg up to the poor" but a subsidy to corporations who would not or could not pay a fair and sustaining wage. So when the British Finance Minister announced in his Budget that he intended to phase out tax credits and institute a much higher minimum wage- the so called "living wage", I did not leap to the defence of the expensive bureaucracy that the tax credit system has created.  However, George Osborne enjoys the game of politics far too much to want to play fair.  His agenda of the abolition of tax credits has now been subsumed into a wider ideological battle. In principle Osborne believes in a small state. He has a stated preference for simpler and lower taxes...

As George Osborne rises to speak in the House of Commons this afternoon, I am sure that he will be feeling a little rueful. The Conservatives have talked tough on the deficit, but the reality is that many of the cuts they proposed were quietly rescinded when it became clear that they were often counter-productive. The crisis in British government finances can not be easily tackled by the piecemeal approach that both the Tories and Labour have set out. The problem lies in the the deep structure of the British tax code, which is unwieldy and expensive to administer and deeply unfair in its application. Without a wholesale -even revolutionary- change in the tax code, the nibbles here and there that he will set out today will not change the direction of travel for the UK. Despite much positive news- and the resilience of the UK economy is the object of some envy internationally- the fact is that the structural deficit can not be eliminated without drastic tax simplification and large sca...

London Prime Property has become an international asset in the same way as any other tradeable asset from gold to bonds. It may be that the majority of properties in Zone 1 are now owned by foreign non residents. Syrians and other Arabs, Russians, Chinese: the London Property market has attracted speculators from around the globe. Increasingly, however, these new owners do not let these properties, they simply leave them empty. Walking in some central London neighbourhoods at night is a sobering experience- there are few lights on, and the economic impact is growing ever more severe. The reasons why London Prime property became so attractive are many and varied, but the primary reason is that the UK does not tax these empty properties. Council tax is not levied when no one lives at the property, and Capital gains and VAT can be avoided very simply. This gross distortion of London Prime property prices is destroying the city and the country. As George Osborne seeks to reflate the pr...

The UK tax system is a mess. At 11,560 pages, it is five times longer than the German tax code. It allows so many exemptions at the top end that the wealthiest taxpayers pay a smaller proportion to the treasury than the poorest. So despite the Daily Mail's drivel about the rich being "overtaxed ", the fact is that the tax burden in Britain falls disproportionately on the middle class. So the Lib Dem proposal to impose a super-tax on the wealthy has some superficial economic merit. Unfortunately it is a cynical exercise in the politics of the focus group. The party leadership launched the initiative knowing that the Conservatives would veto any tax that was not already in the coalition agreement. There was no chance of this idea gaining any traction.  So why do so? The answer is simple: because the party leaders are reading the opinion polls and focus group reports that suggest that such a differentiation on tax will boost the only weakly recovering support for the...