“It has taken me a long time to understand that there is a connection between colonial powers and corruption. “The United Kingdom has maintained its privileges by allowing British companies to operate from their own tax havens. The expansion in the use of these jurisdictions has a link to decolonisation. It is a modern form of colonialism,” she says adding that many of the big tax havens in the world are under British control.
Eva Joly, the Norwegian-born investigating magistrate who broke open the “Elf Affair” in Paris, regarded as Europe’s largest fraud investigation since the Second World War. From an interview in Development Today.
I find it more than a little ironic that Bob Geldof is claiming non-dom status in the UK to reduce his reportedly substantial earnings within the British Realm. According to Nick Shaxson in Treasure Islands the ‘non-domiciled ’ status is a legacy of Britain’s colonial era, where a British subject while performing his duties as an administrator in India for example, would be considered to be ‘resident’ in India but domiciled in his ‘home’, the land of his birth. A change in the law in 1911 however, allowed those who were originally from outside of the UK to avoid tax on the international earnings even though they would be resident in Britain. It is exploited by Greek shipping magnets, Russian oligarchs, Arab Sheiks and Irish media moguls/poverty peddlers.
“The very existence of the resident but non-dom category is an outrageous sop to a small number of highly vocal and well-connected rich folk and their lobbyists. The unequal treatment of equals introduced by the creation of the non-dom (resident but non-domiciled for the purpose of income tax and inheritance tax) category undermines respect for the law among the tax paying public at large. . . Every UK resident should pay UK income taxes on his/her worldwide income. End of story.
Willem Buiter, Financial Times, February 2008
Still, not too surprising, I guess, given that Geldof is a product of that hothouse of the Irish catholic bourgeoisie, Blackrock College.
And I can’t help but laugh when I hear that he gets very annoyed when his hypocrisy is highlighted.
BOB GELDOF lashed out at a reporter this week after he was asked about his tax arrangements, bizarrely demanding to know how many irrigation ditches her salary had built.
Geldof, who was in the Ethiopian capital Addis Ababa for the World Economic Forum, was interviewed by Times journalist Lucy Bannerman. Their encounter appeared to go very well at first, with Geldof talking about the huge changes that have taken place in Africa since Live Aid in 1985.
Then Bannerman asked him about his tax status. After confirming that he is a non-dom and can legally avoid income and capital gains tax on international earnings, Geldof laughed off the Sunday Times Rich List estimate of his worth (£32 million).
When pressed on how much tax he actually paid – the justification for the question being because his big idea, aid, can come from taxes – Geldof exploded.
“I pay all my taxes,” he shouted. “My time? Is that not a tax? I employ 500 people. I have created business for the UK government. I have given my ideas. I have given half my life to this.”
In a bizarre, heated exchange Geldof jabbed his finger repeatedly at Bannerman and demanded to know how many irrigation ditches she had built with her salary.
The tirade ended with Geldof yelling: “How dare you lecture me about morals”, before being led away by his entourage.
I was reading this morning in David Harvey’s A Companion to Marx’s Capital’ about how poverty is an essential part of the process of capital accumulation. Advances in technology to not increase the rate of profit by themselves. Rather they increase the availability of surplus labour – that famous “reserve army of the unemployed”. The reserve army of course is useful in ensuring that wages are moderated and labour market flexibility allows for expansion and contraction of the business cycle while maintain profitability. It also leads to a deskilling of the workforce and poorer quality jobs and encourage those who have jobs to work longer hours for the same pay because they are ‘lucky’ to have a job.