Corporate Tax Avoidance: Victimless Crime?

Even though it might be the reason why Mitt Romney lost the 2012 US Presidential Election, is corporate tax avoidance truly a victimless white collar crime? 

By: Ringo Bones 

For us in the have not section of the socio-economic ladder, the idea of corporate tax avoidance – where corporations resort to legal means to avoid paying their fair share of taxes is seen as a gross disregard of a for profit firm’s corporate social responsibility. And despite corporations thinking its just business as usual, such moves are not gaining them any favors from elected officials desperate for revenue in the austere fiscal environment of our post subprime mortgage crisis world. 

Earlier this year, Google and Starbucks were cited as examples of corporate tax avoidance where they got the practice of diverting their profits generated in a high tax country into one of their parent companies located in a low tax rate region down to a science. Their practice of shifting profits to lower tax regions had been costing the U.K. millions of much needed tax revenue needed to maintain the nation’s infrastructure and other vital social services. Even the CEOs of some multinational corporations – despite earning 20 to 30 times more than a typical public school teacher on an annual basis – manage to pay income taxes at the same rate as that of a typical public school teacher. 

U.K.’s Chancellor of the Exchequer George Osborne had been currently in discussion with his French and German counterparts during this G20 Summit in Moscow over how the practice of corporate tax avoidance had been bleeding the Eurozone dry of much needed revenue. Even though the U.K.’s legislated taxation laws is relatively progressive by global standards – i.e. the richer you are, the more taxes you should pay – corporate tax avoidance skews the very idea of establishing a progressive taxation scheme. And if big multinational corporations are allowed to practice corporate tax avoidance with impunity in the Eurozone, could large scale disenfranchisement of the masses and social unrest be not so far behind? 

Standard & Poor’s On The Dock: Accountability For Credit Rating Agencies?

Will the United States Department of Justice finally proceeding to sue the credit rating agency Standard & Poor’s finally bring accountability to the largely unregulated credit rating agencies?

By: Ringo Bones

With the United States Department of Justice finally proceeding to sue the credit rating agency Standard & Poor’s for misleading investors by its overly-rosy assessment of mortgage back securities – an action that lead to the global subprime mortgage crisis of 2008, many in the financial world are finally breathing a sigh of relief that those credit rating agencies with their rather arcane way of assessing the credit worthiness of complex financial instruments will finally be held into account. Given that such credit rating agencies will finally be held into account after operating devoid of any semblance of corporate social responsibility since the days of the Ronald Reagan presidency, will this finally spell the cleanup of Wall Street?

Given that credit rating agencies are only doing self-fulfilling prophecies of credit worthiness of the credit instruments issued by financial institutions that issued such instruments because the financial institution themselves are the very ones paying the credit rating agencies to assess the very credit instruments they are issuing, the U.S. Department of Justice’s civil lawsuit against the credit ratings agency Standard & Poor’s seems well-substantiated given that S&P’s shenanigans of issuing its top “Triple-A” ratings to rather toxic financial products less than a year before the housing bubble and the subprime mortgage crisis spread around the world. Sadly, many investors were duped because Standard & Poor’s seems to be the only one of its kind qualified to assess the credit worthiness of almost everything from complex financial instruments, financial institutions and even the credit worthiness of other sovereign countries.

Citigroup and Wells Fargo have already been sued by the U.S. Department of Justice for such financial shenanigans that lead to the housing and subprime mortgage bubble of the past five years. With a case that relates to the overtly-rosy rating of subprime mortgage backed securities, other countries affected by the subprime mortgage crisis are planning to sue Standard & Poor’s too. 

Cats In New Zealand: Not Economically Viable?

After a prominent New Zealand economist label them as “natural born killers” and therefore a liability, are cats no longer economically viable in New Zealand?

By: Ringo Bones

Unless scientifically verifiable evidence to the contrary emerges, cats had been introduced by the first white European settlers in an otherwise cat-free land of what is now New Zealand about couple of centuries ago.  During their tenure, cats had lead to the extinction of 9 native bird species in New Zealand and have pushed other native fauna to the brink of extinction thus therefore are seen from an ecological perspective as an invasive species in New Zealand. But will a draconian measure of a prominent New Zealand economist of spaying and neutering cats and not replacing the ones left to allow them to gradually go extinct in New Zealand even be an “economically viable” option?

The rather draconian cat ban by Gareth Morgan, a prominent New Zealand economist who is now labeled as the “anti-kitty economist” by his detractors proposes that by spaying and neutering stray cats and even cats with owners and allowing them to gradually die out is the most economically viable way to solve the native wildlife extinction problem in his country. Given that the New Zealand government had set aside large tracks of the country as a protected nature preserve and those outside the country have seen these via last series of movies by Peter Jackson – i.e. The Lord of the Rings trilogy and The Hobbit – is economist Gareth Morgan’s plan for a “cat extermination” the most economically viable way to solve New Zealand’s native species extinction problem? After all, tenured ecologists have since pointed out the three main threats to native wildlife all over the world are pollution, climate change due to excessive greenhouse gasses in the atmosphere causing global warming and an over encroaching human population into ecologically sensitive areas.

According to Bob Kerridge, president of the Royal New Zealand Society for the Prevention of Cruelty to Animals says economist Gareth Morgan’s proposal is too cruel for New Zealand’s feline pets – economic viability or not. Even though being a prominent economist is not yet an elected position in New Zealand, Gareth Morgan could well kiss his future in New Zealand politics goodbye because cat lovers and cat owners in New Zealand won’t be voting him into public office anytime soon.