Just at the time when the UK Government urgently needs something to divert the public eye away from the #Brexit calamity, something bigger conveniently pops up. Although it’s never been made clear who was behind the ‘Panama Papers’ leak (was an employee of Mossack Fonseca unjustly wronged, and this leak is his or her revenge?) the fact remains that this powerful political tsunami is going to sweep into the land of the wealthy and powerful, destroying everything in its path. We at Third Millennium Man have discussed very little else just lately; here’s our take on “that whole Tax Havens thing“.
Mum’s nowhere near Iceland.
First of all, there’s the predicament of the Icelandic Prime Minister. Remember the start of the economic downturn, when so many British local authorities and companies had money stashed in Icelandic banks, earning far higher rates of interest over and above what UK banks were paying – only to lose vast chunks of it, or all of it in some cases, when the Icelandic banks went belly-up? Although there was officially a news blackout (though there was nothing about that at the time in the newspapers…) it was reported through Internet channels that the fair people of Iceland kicked off big time, almost on the verge of civil war. Bankers were imprisoned, and the Icelandic authorities just about survived intact.
Due to the news blackout the UK failed to follow suit, which is why the financial crisis in Iceland was over and done with and back into prosperity within nine months; in the UK, we’re still feeling the pinch, the Bankers are still earning million-pound bonuses, and the people haven’t reacted angrily other than the odd Facebook post or a strongly-worded letter to the paper. The UK Government (and the mayor of London) spent money on riot precautions such as Water Cannon, but nothing ever materialised. The people never rose up, the riots never came, so the austerity measures have been allowed to gradually increase.
back in Iceland though, it transpires that at the time of the economic upheaval, Prime Minister Sigmundur Gunnlaugsson had millions stashed away offshore, in a company joint-owned by his wife. That’s proved to be enough to instantly push the Icelandic people over the edge, and those people know how to protest. Mr Gunnlaugsson has resigned (in less than 24 hours after the leak) but now claims that the company is now owned outright by Mrs Gunnlaugsson, who hasn’t made an appearance in the media yet; she’s enjoying her fortune down in the Caribbean, we hope. In any event, the Icelandic Prime Minister is the first political casualty – perhaps he’s on his way to a sun lounger next to his wife as I write this.
Will there be other casualties?
Well, there are a lot of questions being made of the British Prime Minister David Cameron in relation to his late father, Ian Cameron. The Prime Minister says he “does not gain from offshore funds” ignoring the fact (which is obvious to everybody else) that Dad paid for little David’s education at Eton, a roof over the family’s head, and all the rest of it.
No doubt David’s inherited something too. Unless dear old Ian had his loot changed into Traveller’s Cheques and took it all with him. If he has inherited anything substantial, where is it? You’re probably thinking what we’re thinking…
There are also rumblings about Dave’s stepfather-in-law, who has delicate tax matters of his own to contend with. We’re clearly all in this together.
Mr Cameron has made it clear that his father’s offshore arrangements with Tax havens “are a private matter”. We however see this as payback for the awful way the comedian Jimmy Carr was treated over his tax affairs. You reap what you sow, Dave. You and Jimmy Carr, you’re both in this together.
It’s interesting to note that there’s currently far more about the Icelandic Prime Minister in the British press right now, than there is about the British Prime Minister. Strange, that….
So what is so wrong with Tax Havens?
Nothing, if you are stinking rich and you’d like to stay that way. Plenty, if you’re a greedy, money-wasting Government teetering on the brink of bankruptcy, like in the USA, Britain, and most of Europe.
We have socialists such as Labour’s Jeremy Corbyn. he says that Tax Havens in British oversea territories should face direct rule if they don’t comply with UK Tax Law. He also says that the UK Treasury loses up to £7.2Bn a year, to tax avoidance and tax evasion.
This is the bit that Third Millennium Man takes an exception to.
First, there’s that figure. Seven billion, two hundred million pounds, each year. Does that sound a bit like a made-up number to you? The fact is, nobody actually knows. It’s a made-up figure, but it sounds about right and it’s doing its job.
Secondly, there’s the money itself. Remind me, whose money is it? It is money earned (or maybe given to) some lucky individuals. The thing is, it’s their money, and they’d like to keep it. It’s not £7.2Bn that’s been robbed from UK Government coffers, it’s £7.2Bn that the UK Government would really like to get their hands on.
So the socialist press can pretend it’s theft as much as they like; they can paint a woeful picture of greedy fatcats stealing money out of the NHS safe, or hanging up a CLOSED FOR BUSINESS sign in a school so they can gleefully run off to Panama with a wheelbarrow full of cash.
These wealthy individuals know that it’s their money. And be honest, if you were in their position, you’d want to keep as much of your own cash as you possibly could too.
(While we’re on the subject – why do politicians only ever speak of “schools and hospitals” when they talk about money? And not the billion-pound refurbishment of Westminster, or the £22Bn loss when RBS is sold to Tory backers at a discounted price? Or the two payrises MPs have received this financial year, totaling over 11%? Or the MPs who have become millionaires since taking office? Or their expenses – take a look at what your local MP claims for….)
It’s perfectly possible to obtain dual-citizenship nowadays. We know Field Service Engineers and Sales Executives who have two passports so they can work in Israel and the USA, and then Saudi Arabia and Iran (yes, we know that passports and citizenship are two different things, but the point is that anyone with the means and the patience can do it).
So if you are a citizen of two countries, where do you pay your taxes? I’d choose the country that’s the most advantageous – which in this particular instance, means the one where I’d pay the lower taxes.
Punish the millionaires Mr Corbyn, and they will disappear. And probably take their businesses, jobs and UK investments with them.
Tax Avoidance – v – Tax Evasion.
The current fashion is to demonise wealthy people, by blurring the distinction between these two notions.
Tax Evasion is deliberately NOT paying Tax. People do go to prison for it, and they go for very long periods of time. Break the law and face the consequences.
Tax Avoidance however, is LEGAL (though journalists seem to enjoy calling it ‘unethical’ and ‘immoral’! I thought highly biased reporting was immoral and unethical, myself….)
We’ve all done it in some way; anybody that’s invested money in a tax-free ISA is, by their definition, immoral and unethical. Anyone that’s deposited small, regular amounts into their kid’s Child Trust Fund deserves to be named and shamed as a tax-dodger. If you’ve ever bought Duty Free booze at the airport, then hang your head in shame. A professional gambler of our acquaintance keeps accurate records in order to minimise his tax burden, as his winnings are tax-free. What a scumbag.
“Any one may so arrange his affairs that his taxes shall be as low as possible; he is not bound to choose that pattern which will best pay the Treasury; there is not even a patriotic duty to increase one’s taxes.”
Judge Learned Hand, Helvering v. Gregory, 69 F.2d 809, 810-11 (2d Cir. 1934).
There is NO OBLIGATION – legal, moral, ethical or otherwise – to pay as much Tax as you possibly can.
If you take nothing else away from reading this article, then please re-read that sentence and absorb it. Bear it in mind the next time you watch or listen to the News, and you’ll see just how deceptive these biased reports are.
The other benefits of Tax Havens.
Okay, there’s one obvious one. If you have billions – okay then, maybe just millions – salted away in one of those Tax Havens that’s also a beautiful and exotic holiday destination, then so much the better. You can go and visit your money once or twice a year. And, if things get a little too uncomfortable at home (as it will surely do for some over the coming weeks and months) then you can always stay there permanently. You’ve got enough there to keep you in island luxury for the rest of your days.
The other main benefit? Money held in a Bank Account in another country is a pretty good Get Out Of Jail Free card.
When the banks of Iceland went belly-up, Sigmundur Gunnlaugsson wasn’t too worried. As Prime Minister, he knew it was on the cards, and made sure his assets were where the Icelandic authorities couldn’t touch them. And until just a short time ago, he was still getting away with it.
When the banks of Cyrus imposed Capital Controls, such as being able to withdraw a maximum of €60 per day (in a country that uses cash a lot more than it uses debit cards) it only affected people with Cypriot Bank Accounts. Tourists with German Bank Accounts were able to withdraw as much as they needed, up to the normal €500 limit.
Much has been made of Economic Migrants traveling across Europe in search of a land of milk and honey, and free houses and benefits. Nothing at all has been made of the guys who flew over First Class, welcomed into Europe as they already have money and property there. If war broke out in the country you currently live in, think how much easier it would be to start a new life abroad if you already held assets there.
Seen the film Gone With The Wind? Rhett Butler, anticipating the Civil War, had already taken his assets overseas. Which is why he makes only the occasional appearance throughout the three-hour film, and speaks frequently of his trips to London and Paris. Neither side in the civil war could seize his assets, unlike so many poor victims of that terrible time. Bet you didn’t already know that.
We hear a lot of stories and anecdotal evidence of Investors and Moneymen who believe that the finances of the country they live in are about to take a turn for the worst. American debt (well over $19Tn by their own figures) is unsustainable, and the economies of the UK and mainland Europe are not far behind (which probably explains why all this fuss over Tax Havens and revenues is being made in the first place).
Your money in a UK Bank is only protected up to £75,000 per account holder, per institution. That sounds like a lot, but not if you run a cash-rich business or if you’ve just sold property and you’re waiting for the conveyancing to finish so you can reinvest. If the Banks invoke Capital Controls at an awkward time, then you’re up the proverbial creek without a paddle.
It is far better to keep your assets beyond the reach of those who might seek to steal them. Keep your biscuit tin where the kids can’t reach it, keep your valuables in a safe where burglars can’t get them, and keep at least a portion of your assets overseas, preferably in Tax Havens with an agreeable climate. Your Government is not your friend.
We know of people who have broken the Law. Two individuals come to mind, who we know were innocent. The first was held and convicted on Drugs charges, and his assets were seized under the Proceeds Of Crime Act 2002. He was released on appeal but, nearly twelve years later, he is still awaiting compensation for his assets. Apparently he’s supposed to ask for them in court, with no money after the courts confiscated it all, and no entitlement to Legal Aid. How different things would have been had he saved a portion of the generous assets he had accumulated though his legitimate, profitable business, and stored them beyond the reach of the UK Authorities. YES you can do this legally, but afterwards is always too late. The second individual faced similar treatment, but on different charges.
Tax Law is incredibly complex. Thousands and thousands of pages of new Tax legislation are produced by Governments, almost daily. Which says to us at Third Millennium Man that the Laws are not there for you to obey. They are there to trip you up, so your assets can be stolen from you, under the terms of that Proceeds Of Crime Act 2002. Can they do that? They certainly can. Your Government is not your friend. But they can’t do that, if your assets are beyond their grasp.
Hence, the witch-hunt for those who store assets overseas in Tax Havens. They want your assets where they can steal them. Not that there’s anything unethical or immoral about that.
This news story is going to run and run. We at Third Millennium Man have nothing to worry about; we wish that we did, because that would suggest that we are all millionaires. As Tax Havens are only really of benefit to those with several millions in the Bank, we can’t see it being a problem any time soon. If only it was…
We do however note one thing that the Media at large has missed. We think it’s been missed on purpose, because it hits right at the very heart of corrupt Governments and the wickedness of the people involved.
Watch and read the News carefully. You will find much outrage is still to come, when Officials are seen to be embezzling funds from Government departments, companies, and storing the money overseas in Tax Havens, in the mistaken belief that they will never get caught. What I would like to know is this. How can someone who is so greedy and corrupt obtain, and is then be allowed to remain in, such a position?
Get rid of the greedy people! If we really are “all in this together” then we the public need to see for ourselves that this is actually happening. Stop wasting billions on hunting down overseas millions, and stop the real criminals.
At the start of the economic downturn, the UK Government introduced some hefty ‘austerity measures’ designed to bring in more, spend less, and reduce the UK national debt. In the meantime, everything that isn’t nailed to the floor has been sold off and privatised. However in the last Budget, it was announced that the debt has risen, and even harsher austerity measures are to be introduced. Quite why NOBODY seems to be asking the Government what have you done with all our money is, quite frankly, a mystery. Perhaps it has been siphoned off – and is already spread around different Tax havens all over the World. There’s still a lot more to come out of the ‘Panama Papers, so stay tuned for more revelations.
There’s a lot here about Tax Havens to discuss! Use the Comments box to tell us what you think.
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