The 'rich' do not bear their fair share of taxes; nor do many major corporations

A recent hot issue in the UK is that of tax avoidance (which legally is different from tax evasion, apparently) practised by practically anyone with a reasonable income - http://www.thetimes.co.uk/tto/money/tax/article3453189.ece - an article in London Times lists " From dentists to doctors and financiers to footballers, through lawyers, dressmakers and an award-winning baker: investors in tax-efficient schemes read like an A to Z of working Britain."

The reason most of these tax avoidance schemes work is because of complex tax legislation that from time to time favours investments in one activity or another.  Over the years these range from encouraging investments in forests (green!) to films and music (culture and arts?) and so forth.


In Hong Kong, individuals pay a standard rate with a basic allowance.  There are no special allowances. This means a reduction in the need for tax inspectors, tax accountants and the rich pay their fair share. Why can't the UK and others follow this excellent example?

A simple search on the Times website for tax avoidance found five pages of hits -  http://www.thetimes.co.uk/tto/public/sitesearch.do?querystring=tax+avoidance&p=tto&pf=all&bl=on l - and the news items cover not only the UK but other countries and continents.

Furthermore, not only individuals are avoiding taxes, but giant companies including hi-tech ones like Microsoft, Apple, Google, Facebook, rich as they are are reducing tax liabilities by forming companies in low tax regimes and pretending all their trading is done in those countries!  According to Forbes - http://www.forbes.com/sites/timworstall/2012/04/16/apple-amazon-google-ebay-and-facebook-all-accused-of-uk-tax-dodging/ - "Apple, Amazon, Google, eBay and Facebook All Accused of UK Tax Dodging"


No wonder the world's economy is in a mess.

What is wealth on a happy planet?

From New Scientist -  http://www.newscientist.com/article/mg21428694.800-us-fails-on-happy-planet-index.html :
"IT'S easy not to trash the planet - if you're dirt poor and die young. But is it possible for all of us to live long and satisfying lives without costing the Earth? That's the question behind a measure of national well-being called the Happy Planet Index (HPI). Its latest update, released this week ahead of the Rio+20 summit on sustainable development, names Costa Rica as the world's most "developed" nation and puts the US on the sick list.

To show how different the world looks when viewed according to the HPI, rather than conventional wealth, New Scientist applied distorting lenses. In the top map, countries are sized according to their GDP, and shaded by GDP per capita. As sub-Saharan Africa almost shrinks from view, western Europe, the US and Japan swell and flush a deep red.

But this wealth has fuelled massively unsustainable use of natural resources (see "Peak planet: are we starting to consume less?"). Nic Marks of the New Economics Foundation in London developed HPI as an alternative measure, "to capture the tension between good lives now and good lives in the future".

HPI measures nations' success in delivering long and contented lives, the latter determined by a survey question. These scores are then diminished according to each nation's ecological footprint: the total area needed to provide the average citizen's food and other materials, and to absorb their carbon dioxide emissions.

In the larger map, countries are shaded according to HPI scores, with deeper greens showing countries that are most efficient at converting natural resources into long and satisfying lives for their citizens. Nations are sized according to HPI multiplied by population, giving a "gross" HPI comparable to GDP. This helps reveal countries whose sustainability will most influence the planet's overall health.

There are various ways to achieve a good HPI score. Latin American nations tend to do well on life satisfaction, but Costa Rica stands out for pushing life expectancy beyond the US average and adopting strong environmental policies. Other surprising "winners" include Bangladesh, where 150 million people, crowded into an area smaller than Florida, have made impressive gains in human development despite meagre consumption.

The US provides a strong contrast. Its people live long, reasonably contented lives, but their profligate consumption explains the nation's pale and emaciated appearance on our HPI map.

The big question is whether China and India can limit their footprints and turn their already large and rapidly growing economies a deeper green. The best hope, says Saamah Abdallah, lead author of the new HPI report, is that "enlightened self-interest" will send them down a more sustainable path (see "China leads the march for the green economy"). "They're not going to enjoy what we have in the west," he says, because available resources won't allow it.

Everyone else, and especially the US and other high-consuming nations, will also have to pull their weight. Even Costa Rica's footprint is too large to be sustainable in the long run, says Mathis Wackernagel of the Global Footprint Network in Oakland, California. And if China's development continues to depend on satisfying the US's insatiable demand for consumer goods, it will be hard to chart a sustainable course.

Given the Earth's limited resources, a change of direction is badly needed for everyone's good, says Marks: "There's no Planet B.""

Turning Point?

From New Scientist - http://www.newscientist.com/article/dn21886-peak-planet-are-we-starting-to-consume-less.html 


"Some say humanity's ever-rising environmental impact is about to go into reverse. Fact or just fantasy?

HUMANITY is doomed. Or it was in 1798, when English scholar Robert Malthus published his influential An Essay on the Principle of Population. Malthus predicted that unchecked growth in human numbers would condemn our species to a "perpetual struggle for room and food" and an unbreakable cycle of squalor, famine and disease. Nearly two centuries later, biologistPaul Ehrlich was no less pessimistic. We had exceeded the planet's "carrying capacity", he declared in his 1968 bestseller The Population Bomb. "The battle to feed humanity is over. Sometime between 1970 and 1985, the world will undergo vast famines. Hundreds of millions of people are going to starve to death."

In 2012, our mood has hardly improved. The focus has shifted from how to feed ourselves to our rapacious appetite for energy and raw materials, and the greenhouse gases we pump into the atmosphere to satisfy it. Sooner or later, the argument goes, we must send our planet's climate and ourselves past the point of no return - if we haven't done so already.

Might these reports of our imminent demise also be exaggerated? That is the reasoning of those who see a pattern in recent statistics from the industrialised world. People in the US are driving less. Europeans are using less energy. Water use is down in countries such as the US and UK; so is calorie consumption in the UK.

The talk is of "peak stuff": that beyond a certain level of economic development, people simply stop consuming so much. Technology and the course of economic evolution allow prosperity to keep rising without a linked increase in our use of energy and materials. Our demands on planetary resources stabilise - and ultimately begin to fall.

Others are unconvinced, seeing in peak stuff a dangerous myth and a thinly veiled excuse to abandon efforts to limit our planetary impact. Without large-scale intervention to curb our excesses now, they argue, peak stuff, if it exists, will be too little, too late. So who is right? Is humanity really about to lose its appetite for stuff - and if so, will it help?

Predictions such as those of Malthus and Ehrlich fell down on a simple point: they failed to see what came next. Malthus missed the industrial revolution and its ways of mass production, which ultimately allowed more people to live longer and more comfortably. Ehrlich failed to factor in the "green revolution", the widespread use of more productive crop strains and chemical fertilisers and pesticides that has kept food production ahead of the population curve since the 1960s. Perhaps we are missing a similar trend now.

Although Ehrlich arrived at the wrong conclusion, his analysis provides a useful framework for assessing arguments about peak stuff. Ehrlich described our planetary footprint as the product of three factors: how many of us there are, how much each of us consumes and how we produce what we consume - that is, the prevailing technology.

 ... 

Will we grasp the nettle? The Danish agricultural economist Ester Boserup argued that throughout history, population growth and the pressure of shortages have been necessary spurs to technological developments, which seem to arrive just in time to avert the sort of disasters that exercised the likes of Malthus and Ehrlich. The signs are that we already have the know-how to live long and prosper without demanding ever more from a finite planet. The question is whether we will make the decisions to realise that promise before "just in time" becomes "just too late"."

Let’s get together to solve this crisis

By Julie Meyer, CEO of Ariadne Capital at The Times CEO Summit - http://www.thetimes.co.uk/tto/public/ceo-summit/article3442352.ece

“The Eurozone Crisis Is The biggest challenge that we all face. It is the thing that we have to fix, to sort out, to help restore growth right across the world economy,” David Cameron said last week in Oslo.

“Speed is of the essence.”

The British public, sick of being trapped in the longest economic downturn for a century and dizzy from the constant euro bickering, is waiting for the Prime Minister or European leaders in Brussels to swoop in, Superman-style, and “fix” the problems. Consider how many times you hear someone say: “What should the Government do?”

Sorry folks, it’s not going to happen. Waiting for our politicians to kick-start growth, to create jobs, to stem the euro rupture is like waiting for Greece to announce that it has paid off its debt. The game is up. Government has been found wanting in its role as leader of our financial assets and of civic society.

Trust the people instead.

Youth unemployment? Eminently solvable. There are 4.8 million small and medium-sized enterprises (SMEs) in the country and one million young people out of work: that means that only 20 per cent of SMEs need to hire one of these young people to fix that “problem”. Can we not come up with an incentive of lower tax or local award or benefit to encourage 20 per cent of the most durable firms in the country to take on a young person? People in their twenties are digital natives and therefore have a natural advantage in business. They instinctively understand the future because of how they engage with the world through their smartphones, social networks and digital games.

These SMEs subsidise big business today. Yes, you read that correctly: SMEs fund the big boys. SMEs are forced to pay on time. Routinely big business will give its suppliers 90 to 120-day payment terms. And it was reported earlier this year that Vodafone and Goldman Sachs did “special deals” with HMRC to reduce their tax. No SME can do that.

They pay tax where they operate; they can’t “arrange” their affairs to lower tax or channel it through another jurisdiction.

Why aren’t UK plcs — which are sitting on £64 billion of excess working capital — being given the incentive to invest in the country’s SMEs? Why aren’t there more innovative partnerships, such as British Gas and AlertMe, Visa and Monitise, or Yell and TrustedPlaces? If the “Goliaths” don’t embrace the “Davids”, they will be run over by them and then slowly drift into insignificance. Just look at what happened to Polaroid, a pioneer of photography, which had two near-death experiences over the past decade because it failed to embrace digital. 

Or Kodak, the 133-year-old inventor of the hand-held camera, which struggled to keep up with competitors who were quicker to adapt to the digital era, and filed for bankruptcy protection earlier this year. How different things could have been if either company had beaten Facebook to the punch and invited Instagram, a social photo-sharing application with huge momentum, to hop on its back. Instagram was in the same markets as Kodak and Polaroid, and yet there wasn’t any dialogue, much less a partnership. One of the chief assets that large businesses have is their distribution, and yet many don’t leverage that asset for the young digital businesses coming through who need precisely that: reach and scale.

As I argue in my new book, Welcome to Entrepreneur Country, David and Goliath must dance. The establishment and the challengers need each other to catapult new technologies into the heart of existing industry. That is how high-growth business will re-emerge to drive the economic engine.

Society is undergoing a structural change akin to the shift from horses to cars. Entrepreneurs are building the cars, but they need the corporate highways to gain speed. Those who get to the other side first are the winners. Throughout history, those who embrace change reap the benefits.