Time for a USA Uncut?

December 17th, 2010

Tax Dodger

Time for a USA Uncut?

A few weeks ago ten activists, mostly in their twenties, met in the Nag’s Head pub in North London and started to discuss protesting against severe austerity measures being implemented by Britain’s coalition govermnent. Instead of protesting simply against cuts, they thought it would be more interesting to launch a strike against tax-dodging  multinational corporations. Building on analyses of the UK’s so-called Tax Gap, a subject where the Tax Justice Network’s Senior Adviser Richard Murphy has been especially influential, the young activists could see this was a clear and coherent alternative to the government’s austerity programme.

The group called itself UK Uncut – and their idea began to spread like a virus, especially on Facebook and Twitter (#ukuncut, for the Twitterati). By December 4th the group had triggered a co-ordinated day of almost spontaneous protests across Britain, with nuclei sprouting unexpectedly and automomously in the most unexpected places. Tunbridge Wells, a byword for Middle-England conservatism, has not been spared. The protesters began targeting the UK telecoms giant Vodafone, which had recently reached a sweetheart deal with the UK’s tax inspectors to approve a multi-billion dollar transfer pricing arrangement routed through Luxembourg, and against Sir Philip Green, a retail magnate who is Britain’s ninth richest man who has routed billions through his Monaco-resident wife, avoiding a vast tax bill.

“Over 15 times more is lost to tax avoidance at the top, than is lost to benefit fraud at the bottom,” claimed its campaigns organiser, Joe Cox, highlighting a mismatch in the priorities between tackling avoidance by those at the top and the bottom of the income scale.

Although most protesters had little detailed understanding of the multinationals’ complex tax shenanigans, all grasped the basic point: that they were suffering from an outrageous – if legal – ongoing system of abuse being perpetrated against ordinary working people at a time of national hardship.

The protests were wildly successful, triggering massive media coverage in Britain. Protesters glued themselves to shop windows, raided upmarket shopping stores and got carried out by police. There were sit-ins, flashmobs and pickets. One intrepid protester carried out her own one-woman protest wave. John Christensen of the Tax Justice Network, who attended a protest on London’s Oxford Street, describes his experiences here. “What a clever, well-targeted protest,” wrote Polly Toynbee, a leading UK commentator.

Tomorrow, on Saturday, December 18th, UK Uncut plans something bigger. Dubbed “Pay Day,” one can gauge the strength of what is breaking out spontaneously in Britain from the length of the list of locations where actions are planned. Take a look at that list of towns and cities, and remember: this exploded onto the British political scene in just a few weeks, as if from nowhere.

Protesters are being urged to get creative. There will be a disruptive tour of tax dodgers in Brighton and a ‘Monaco Grand Prix’ around Topshop in Oxford. In London, hundreds of protesters will hit Oxford Street. They will stage a ‘read in’ at Vodafone’s flagship store to make the links between tax dodging and massive library cutbacks, and a ‘sports day’ inside Topshop’s flagship store, to highlight cuts to school sports. Protesters even designed an iPhone app to help people angry at the cuts to locate their local tax avoider and join their nearest protest.  Green’s £285m tax dodge could pay for two years of school sports and Vodafone’s tax dodge could pay for every single cut to local governments this year, the group says. Although TJN did not organise UK Uncut, John Christensen will be out tomorrow wearing a jacket marked “Economic Adviser” and fielding calls from journalists. Richard Murphy has been supplying additional advice. Many of our members will be involved tomorrow.

Like the fight against corruption, this is not a left-wing or a right-wing issue. The popular right-wing Daily Mail carried one of the best analyses of the phenomenon yet, firmly on the protesters’ side, and heroically and successfully explaining very succinctly phenomena such as transfer pricing and thin capitalisation, to a football-mad and celebrity-obsessed readership. Tax avoidance is as complicated as you want it to be – but at heart, it is very simple to grasp.

In an editorial entitled Tax Justice: Back on the Agenda, the left-leaning Guardian summed up one of the big reasons for UK Uncut’s success.

Quibble, if you must, with the tactics and the arguments of the protesters who besieged branches of Vodafone this weekend, and shut down the giant Topshop on London’s Oxford Street last Saturday. But give the UK Uncut demonstrators credit for this: instead of taking cheap shots at David Cameron, they are making a tricky, worthwhile argument about tax.

Could such a phenomenon break out in the United States? As a British writer who has visited the U.S. several times but never lived there, I hesitate to make any predictions. I know the political dynamics are very different, and progressive attitudes to tax face more powerful headwinds than in Britain. Timing may be an issue: Britain is just entering a period of sustained, mean-spirited austerity, while the U.S. is still in some sort of half-baked stimulus zone.

But a few things make me think this could gain traction, if not today, then in the not too distant future. First, notwithstanding the complexities, the basic issues at stake are coherent and clear. The left in the U.S. is currently rather rudderless, disappointed in Obama and casting around for alternatives. Second, there is no shortage of material to run with. Just in the last few weeks, we have seen articles on massive and accelerating tax avoidance strategies by the likes of Google, Microsoft and Cisco – to name a few. It wouldn’t take a dedicated expert too long to build an updated analysis based on the accounts of, say, News Corporation, to follow up on older investigations by the Economist, and others which found tax rates of six percent or so. And then there are the banks, the hedge funds and the private equity companies: for many of them, tax abuse is part of core corporate strategy.

Americans, like so many others around our crisis-ridden world, have recently become unusually sickened by what their leaders are doing with their country. The Tea Party is fired by massive anger against a system that is broken – and they are quite right to feel that it is broken. But only a portion of Americans support them. Tens of millions more are fired by the same anger at broken government and the capture of politics by Wall Street – but they hate the Tea Party and everything it represents. Everyone wants to protests against Wall Street – but against what, precisely? There is so much to protest about that most people find it hard to know where to start.The quiet millions are looking for a coherent shared agenda.

Could a USA Uncut, or something like it, be what they are looking for? Once people understand that tax havens and tax abuse are far more central to the problems America faces than is popularly supposed, and that so much financial abuse revolves ultimately around offshore finance, then the possibility of action becomes clearer. Given how unexpected the British protests were, and how spectacularly they have snowballed since that night in the Nag’s Head, I dare to hope that perhaps something of this kind could be something Americans will come to feel this is something worth taking to the streets for too. If not today, it could happen sooner than we think.

Written by Nicholas Shaxson

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