Scott Robinson - A Friend to Many

In place of my weekly "Cool Things My Friends Do" blog post, this week I am remembering a friend who passed away unexpectedly.

The Austin community was shocked and saddened this week by the unexpected death of Scott Robinson.  He was 41 years old.  This father of two young children (he leaves behind a son and a daughter, twins, age 8) was a tireless supporter of the Austin Entrepreneurial Community.  

It was nearly  two and a half years ago when I first met Scott.  You could not miss him at a networking event, as he had to be 6'4 (maybe taller), and was always very well dressed.  Scott took a sincere interest in others that instantly made people feel as if they were his long lost friend.  Every time I would see Scott he would have an idea of somebody I should meet.  He was all about helping others discover the connections that could lead to mutually beneficial success.  And he was not just an idea guy, he was a doer.... as he always followed up with an email making the introductions between people.

I would run into Scott regularly around town about once a week, and we were part of an occasional business networking group that met for lunch semi-regularly.  He was always excited about a project he was working on (TEDxAustin Youth, StartUp America, RISE Austin, or helping promote The Wire) to help make Austin a better place.  His smile was contagious, and he always was supportive of the causes of those around him.

The folks at Silicon Hills News wrote a wonderful tribute to the memory of Scott Robinson (link to article http://www.siliconhillsnews.com/2013/09/04/in-memory-of-scott-robinson-a-huge-supporter-of-austins-tech-industry/).  Take a minute to read what they said, but also view the comments section, as so many people added their thoughts about this man who was a real "giver".  

Scott Robinson was one of the good guys.  He will be missed.

To honor Scott there is a scholarship set up for his children ("The James Scott Robinson Memorial Fund" through Wells Fargo Bank). 

 In addition to making a donation, I suggest those who knew him (and others) should deliberately seek out a way to help another person find success.  Make an introduction between two people, or sit down with someone to help them brainstorm their next project.  When you do that, think of Scott.... I bet he would like knowing that he inspired us all to lend a hand and be better "givers".

Have A Great Day

thom singer

OECD and G20: How Long Will it Take on Tax?

Update: the G20 statement is now available.

The OECD has reported to today’s G20 Leaders meeting in St Petersburg on its tax work. This now falls into three areas, covering two issues.

First, transparency and exchange of information on tax. We should remember that this resulted from a much earlier initiative by the then G7, when Russia was still waiting in the wings and the developing countries such as the BRICS were not even candidates to be considered leading states.

The concerns at that time about tax havens and the offshore secrecy system led the G7 to ask for an OECD initiative, and the result was its report in 1998 on Harmful Tax Competition.  This project was of course effectively derailed by a change in US policy, when the new Bush administration accepted arguments that the initiative as first formulated entailed dictating tax policy to other states. The project then refocused on obtaining information from tax havens, laboriously pursued by the OECD for nearly a decade by negotiation of bilateral tax information exchange agreements (TIEAs). Only now, after the fiscal crisis of 2007-8, has this effort for fiscal transparency produced the commitment at this year’s G8 summit meeting in Lough Erne to establish a new global standard of automatic exchange of tax information, as well as transparency of beneficial ownership. Yet this is what organisations like TJN called for from the start. Until recently, we were laughed at: now it is mainstream.

So the OECD now has two transparency projects. The first, based on bilateral agreements for exchange of information on request, is coordinated through the so-called Global Forum on Transparency and Exchange of Information for Tax Purposes, which conducts `peer reviews’ on each country. Second, the new standard which has finally been proclaimed is for multilateral automatic exchange of information. The OECD now aims to develop a model for this to be ready next year. The key is of course establishing suitable technical systems to ensure effective use can be made of such large quantities of data that will emerge from automatic information exchange. The OECD has in fact been working on this for some 30 years, largely in secret, so it will be interesting to see what they come up with.

The third area is of course "Base Erosion and Profit Shifting" (BEPS), a project looking at corporate tax avoidance which the OECD launched quietly in July 2012, and was then given a political impetus by the G8 and the G20. After a year’s work, it published an Action Plan on  July 19th 2013. This envisages a 30-month work programme on 15 Action Points, aimed essentially at trying to repair the international tax system. We gave our immediate response to the Plan at the time, regretting that the OECD had chosen to try to repair a fundamentally flawed system that cannot be effectively fixed, and rejecting the new 21st Century approach that we think is needed. In our view, the OECD has allowed the G20 leaders to kick the can down the road, proposing a plan which will face enormous obstacles, and may prove largely ineffective. We will continue to keep a close watch, and will have much more to say as the work proceeds.

What can be learned from comparing the two initiatives? Only after 15 years’ pressure from civil society has the OECD now accepted the global standard of multilateral automatic exchange of information. We hope that it will not take quite so long for it to accept that the only effective way to take transnational corporations is to treat them as unitary firms, based on Combined and Country-by-Country reporting and profit apportionment based on their real presence in each country.

See also this policy briefing, co-signed by the Tax Justice Network and 33 other organisations, focusing on the BEPS initiative.

Two new tax haven items in UK parliament, pushing transparency

First, an Early Day Motion, from Wednesday:

"That this House notes with concern that one in five tax havens worldwide are under UK jurisdiction; further notes that although all the British Overseas Territories have committed to joining the Convention on Mutual Administrative Assistance in Tax Matters, none have actually done so and no time-frame has been set in which they will do so; further notes that the island of Sark, where income tax is set at zero per cent will not come under the new agreement signed by Guernsey so will be exempt from oversight on beneficial ownership; believes that clarification on when the register of beneficial ownership will come into force, which British Overseas Territories will sign up to the Register and whether it will be publicly accessible is required as a matter of urgency; observes that while the automatic sharing of tax information will aid transparency, it will not in itself alter the tax regimes which made these territories attractive to companies and individuals aiming to minimise their taxes; and calls on the Government to take action both domestically and internationally to tackle the use of tax havens by multinational companies and individuals operating in the UK or in territories under its jurisdiction."

We would support that.

We would also like to draw attention to this important parliamentary bill on corporate transparency; United Kingdom Corporate and Individual Tax and Financial Transparency Bill, which

"aims to tackle the opacity that exists in the affairs of multinational corporations"

and, more specifically,

"any UK multinational corporation must publish the accounts of all its subsidiaries on public record, and if nowhere else that must be on its own web site."

and something else of significance:

"the Bill tackles the opacity in the tax affairs of both large companies and wealthy individuals in the UK by requiring that the tax returns of the top 250 in each group should be put on public record.
. . .
Most of the rest of the Bill focuses on ensuring that the beneficial ownership of companies and trusts is placed on public record when the public interest requires it."

See this letter from UK MP Michael Meacher, the bill's sponsor, here. With a summary overview of the issues at Tax Research, here.

Timeless US tax reform comic book from 1977, now available online

From our friends at Citizens for Tax Justice in the United States:

While most comic books deal with spandex-suited superheroes saving the day,  the protagonists in New York Public Interest Research Group's (NYPIRG) "Blood from a Stone: A Cartoon Guide to Tax Reform," published in 1977, are the everyday taxpayers who are getting shafted by a tax code increasingly riddled with loopholes that directly benefit the rich. The only full-fledged, full-length comic book we know of that’s dedicated to the issue of tax reform, "Blood from a Stone” offers a concise and witty introduction to the history of taxation and the need for progressive tax reform in the United States.

While the comic is now over 36 years old, it remains strikingly prescient considering that tax reform has once again become one of the dominant topics of debate in Washington. In fact, many of the specific tax breaks called out as in need of reform in the comic, such as the preferential rate for capital gains or accelerated depreciation, are on the top of the list of the breaks that still need to go!

We are proud to pluck this comic from its obscurity and to post, for the first time since its original release, a digitized copy of this fascinating comic in its entirety.  We do so with gratitude and permission from the comic's original authors Larry Gonick and Steve Atlas.  Enjoy!

The complete comic is available here, or you can download more bite-sized sections from CTJ directly. The panel below (click to enlarge) provides a good defence of the principle of progressive taxation.

The Missouri-Kansas border war and the disaster of tax "competition"

We have for many years explained how engaging in tax "competition" is a disastrous economic strategy for any jurisdiction, and an even greater collective disaster for the world. Tax "competition" bears no economic relation to healthy market competition; on the contrary, it distorts markets; increases complexity, steepens inequality and deepens poverty, and erodes countries' sovereign powers to create the tax systems that voters want.

Tax competition is economic warfare and has no redeeming features of any kind. Any politician or economist who favours it has fallen prey to economic fallacies - or is a shill for vested interests. See their arguments derobed here.

One of the hotspots of the tax wars inside the United States is State Line Road, the dividing line between Kansas and Missouri. These states have been aggressively using their state tax codes to try and poach businesses from each other, to the collective detriment of both.

Now, courtesy of KCTV5 News in Kansas City, we learn that a coalition is coming together to try and put a stop to the nonsense, which has been going on for years but seems to have become sharper recently:

"Kansas Gov. Sam Brownback had embarked on an aggressive tax-cutting policy which sweetened the pot by offering incentives to businesses willing to relocate. Missouri passed a similar tax measure, which Gov. Jay Nixon recently vetoed."

The KCTV5 reporter correctly calls this "the border war." But there are voices of sanity out there, calling for a truce in this border war:

"Critics and some economists say tax incentives prevent revenue from going into schools and local roads which ends up hurting both states in the long term. That was the focus of a recent University of Missouri-Kansas City forum.

"In terms of the message to economic students, lowering taxes: it is which taxes and at what expense. It is questionable in terms of where our revenue is going to come from," said Annie McKay with the Kansas Center for Economic Growth.

Quite so. A recent study that we cited in April found that Kansas and Missouri alone had spent at least $192 million in tax subsidies to poach jobs from one another despite an 'anti-poaching' agreement; the net result appears to have been only a tiny net jobs migration of a few hundred jobs (in favour of Kansas) but at very, very high overall cost to both states. The latest efforts are nothing new.

But perhaps there is new political will in the air. As KCTV5 reports:

"We shouldn't have some sort of race to the bottom to create jobs that don't create any kind of quality of life," said state Sen. Paul LeVota in Missouri's 11th District.

If that sounds like sour grapes from a Missouri politician, consider that his colleague across the state line agrees.

"Our local business leaders from both sides of the state line needs to step up and say, 'it is time to stop and re-evaluate,' because at the end of the day, we're not doing any favors for anybody here," said state Sen. Tom Holland in Kansas' 3rd District.

These politicians have avoided the economic fallacies and have clearly understood what is happening here. This is economic warfare, from which the only winners are the wealthy owners of the corporations that gain the tax benefits: for it is on the owners of capital, not the ordinary workers, upon which the tax charge falls.

So tax "competition" creates, as tax writer David Cay Johnston once put it, "not trickle-down, but Niagara up."

For more on this general subject, see our briefing on tax competition here, with further stories here.

Note to journalists: when writing about this subject, it helps to put the word 'competition' inside quote marks, as a marker to show understanding of the economic issues involved. 

What does the 3News #Labour'sGotTalent poll mean?

3News has been polling for #Labour'sGotTalent. And the results are interesting; very interesting indeed; check this out:

This is really interesting in many ways. Firstly, no candidate has an outright majority, so the next few days are going to see some horse-trading going on. But secondly, and perhaps more importantly, David Cunliffe may not actually be as popular as he thinks he is.

We're really surprised to see Cunliffe at less than 40% support. And when that support is drilled down just to Labour supporters, he only reaches 45.6%.

Earlier this afternoon, but presumably with knowledge of the poll results (he's been dropping hints all day) Patrick Gower posted this on the 3News website:

Shane Jones may be the outsider in Labour's leadership race - but he is also set to be the kingmaker.

The voting system the Labour Party is using for the leadership means Jones will likely end up with the casting vote.

Jones may well decide whether the leader is David Cunliffe or Grant Robertson.

This is the big development in the race right now.

I have new information about what's happening in the behind the scenes machinations.

I have spoken to the key MPs and party hacks "doing the numbers" in all three camps and they all say: "This is all about the 'Jones second preference'."

These people are some of the craftiest and hard-headed political operatives New Zealand has ever seen and they have all zoned in on the "Jones second preference"

But we reckon that all bets might be off now, with Grant Robertson relegated to third place; how does a Jones/Robertson (in that order) ticket sound?

There's one common denominator here; those supporting Shane Jones and those supporting Grant Robertson are united in not wanting David Cunliffe to lead the Labour Party. So what have they got to lose by voting for Jones? If he can steal next year's election, he will be a hero. If not, Grant Robertson can succeed him then.

The loser in all of this tonight is David Cunliffe. If he doesn't lead Labour after #Labour'sGotTalent, he never will. And that is starting to look like a distinct possibility. Mr Cunliffe may even decide that he has bigger fish to fry.

Tonight's poll has really set the cat amongst the pigeons. The ramifications are going to be fascinating.

Gladwell on PEDs

Malcolm Gladwell has a piece in The New Yorker (which he defends on this podcast) that basically lays out in detail an argument I've made previously--there is no good reason that performance-enhancing drugs are outlawed when performance-enhancing medical procedures (e.g., Tommy John surgery or eye surgery to improve vision) are permitted and that people with random genetic benefits (for example, an Olympic cross-country skier with a genetic mutation that over-produces red blood cells, which provides a tremendous advantage in endurance sports) are allowed to benefit from them. It is definitely worth a read, as is the new book The Sports Gene by journalist David Epstein, which Gladwell is reviewing in this piece.

People (particularly present and former players, who should know better) often criticize PEDs as short-cuts and PED users as lazy; the player used drugs instead of putting in the hard work of making himself a great player. In fact, many PEDs actually are all about hard work; the reason cyclists blood dope is so their bodies can work harder for longer and the benefit of steroids is to allow players to work-out longer and become stronger. When Lance Armstrong insisted "I am on my bike busting my ass six hours a day", he was telling the truth; the doping was what made it humanly possible for him to do that much work.  On the other hand, we don't think of genetic advantages (say, especially good eyesight for a Major League hitter) as a short-cut, but as a natural tool that the player then must maximize through hard work. The point of PEDs is to level that genetic advantage, which he then maximizes through hard work. What's wrong with that?