European Countries accept to offer tax-exemptions that benefits Europe while stifling the rest, report claims!

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“Considering the strong democratic traditions in Europe, and the fact that taxation is considered an issue of great importance to national sovereignty, it seems rather odd that the EU has taken such a negative approach to the inclusion of developing countries in the setting of global tax standards” (Eurodad, P: 33, 2016)

There are in this world, lots of greedy people and states that want to earn on their own benefit and get the little extra without the second party. That is why the European States do what they can to keep as much benefit of businesses inside their own dominion, even as the businesses are earning their profits in developing countries, this is happening with sophisticated business transactions, sweetheart-deals, letter-box companies and stashing profits into tax-havens.

The ones that doesn’t this tactic, this way of earning higher profits and getting better rates on the production; the reality is that European States has worked coherent to avoid their thieving of funds as the taxation deals and openings of the multi-national companies in Europe. So with these possibilities, there comes also the reasoning that the companies do what they can to stifle the European states in their own scheme to keep them. Certainly the countries getting a point on the dollar instead of multiple points on it; they could get a fair trade out of, but when they are tricking the businesses there, the businesses will do what they can to trick out of them too. The Businesses are not in the country out of love, they are there to earn profits and doesn’t’ care how as long as they get. So long the States are having the set-up to be used, they will use them and the citizens will wonder why the sophisticated businesses pay so little why earning fortunes, while the citizens are paying fairly high tax on the dollar.

Just take a look!

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Letter box companies:

“The setting up of letterbox companies is one of the practices used by multinational corporations to avoid paying taxes in countries where their economic activity takes place” (…) “Looking at global investment flows, it is clear that several European countries are major centres providing attractive tax regimes for letterbox companies and thus functioning as conduits for multinationals’ investments. By comparing the statistics of foreign direct investments (FDI), Dutch organisation SOMO shows that the Netherlands is by far the largest exporter of FDI in the world, ahead of much bigger economies such as the United States and China” (Eurodad, P:17, 2016).

Sweetheart deals:

“In November 2014, the LuxLeaks revelations exposed the secret world of Advance Pricing Agreements (APAs) – also known as sweetheart deals – which benefited multinational corporations, in some cases with tax rates lower than 1 per cent.89” (…) “Public insight into these kinds of deals is very rare indeed, since they are kept highly confidential. In fact, the LuxLeaks revelations were followed by legal charges against the two whistleblowers, as well as one of the key journalists, who brought the story to the public. The case is still ongoing in Luxembourg (see ‘Lack of whistleblower protection’)” (…) “Other examples of problematic APAs have been highlighted by the European Commission’s state aid cases. For example, APAs played a central role in the tax arrangements between Luxembourg and Fiat, the Netherlands and Starbucks, and Apple and Ireland. In these cases, the European Commission found the tax advantages given to the multinational corporations, through APAs, to be a violation of the EU’s State Aid rules” (Eurodad, P: 19, 2016).

Tax Treaties:

“Another key concern related to tax treaties is that they often include provisions to lower – or remove – withholding taxes on cross-boundary financial flows, and thus can lead to lower tax income in the countries signing on to such treaties, including developing countries. For example, research by ActionAid shows that a tax treaty between Uganda and the Netherlands, signed in 2004, completely takes away Uganda’s right to tax certain earnings paid to owners of Ugandan companies if the owners are resident in the Netherlands” (…) “The underlying problem in the international tax system today is that multinational companies are treated as a collection of ‘separate entities’ even though in reality they function as unified firms, with subsidiaries under the central control of the parent company. In today’s system, subsidiaries of the same company are expected to trade with each other ‘at arm’s length’, as if they did not have any connection to each other” (Eurodad, P: 21-24, 2016).

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Bank Secrecy:

“In order to deal with the tax evasion and avoidance risks related to banking secrecy, some developed countries, such as the EU Member States, have agreed to start exchanging information on financial accounts automatically amongst each other” (…) “This means that, for example, the Belgian tax authorities will, automatically and on a periodic basis, receive information on any bank accounts or assets held by Belgians in other EU Member States. The aim of this automatic information exchange is to improve the efficiency of tax collection and prevent taxpayers from hiding capital or assets abroad” (Eurodad, P: 27, 2016).

Interesting findings from European Countries:

“The Austrian government is against full public country by country reporting, and even the European Commission’s proposal for partially public country by country reporting” (Eurodad, P: 41, 2016).

“Belgium generally has a relatively high number of tax treaties with developing countries, but the average reduction in developing country tax rates through these treaties is low. However, that the average does not show is that several of Belgium’s tax treaties with developing countries are ‘very restrictive’. There are also clear indications that Belgium’s tax treaties have significant negative impacts on the developing countries that sign them. A conservative estimate puts the fiscal cost to 28 developing countries at €35 million in 2012”(Eurodad, P: 41 , 2016). “The Belgian tax treaty system is also an issue of concern. A conservative estimate suggests that 28 developing countries lost €35 million in 2012 due to tax treaties with Belgium” (Eurodad, P: 57, 2016).

“The position of the Czech government on the issue of ownership transparency is ambiguous. On the one hand, the new Czech law is very restrictive in terms of access to information in the Czech beneficial ownership register (in fact, it seems that the definition of the “legitimate interest” is so narrow that in practice it will be inaccessible for the public, no matter if they have a legitimate interest or not)” (Eurodad, P: 42, 2016).

The Danish government does not support full public country by country reporting. Instead, Denmark supports the proposal from the European Commission, which would only allow the public to get a partial picture of the activities and tax payments of multinational corporations” (Eurodad, P: 42 , 2016).

“Although the French tax treaties with developing countries on average reduce the tax rates less than most other countries covered in this report, France has eight ‘very restrictive’ tax treaties with developing countries. In total, France also has the highest number of treaties with developing countries among all countries covered by this report” (Eurodad, P: 43, 2016).

The German government has previously worked very actively against the adoption of full public country by country reporting at EU level. Germany remains very sceptical, even towards the proposal from the European Commission, which would only introduce partially public country by country reporting” (…) “Germany’s tax treaties with developing countries are a cause of concern due to the high number of very restrictive treaties. Also of concern is the fact that Germany’s total number of treaties with developing countries is significantly above average” (Eurodad, P: 44, 2016).

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“Of all the countries covered by this report, the Irish tax treaties with developing countries introduce the highest average reductions on the tax rates of their developing country treaty partners. Among the Irish tax treaties with developing countries are three ’very restrictive’ treaties” (Eurodad, P: 44, 2016).

“Although the Italian tax treaties with developing countries on average reduce the tax rates less than most other countries covered in this report, Italy and the UK are the countries that have the highest number of ’very restrictive’ tax treaties with developing countries” (Eurodad, P: 45, 2016). “An Italian investigation is also ongoing into Credit Suisse Ag. The Switzerland-based group’s parent company is charged with systematically having helped 13,000 Italian clients to hide their assets of more than €14 billion abroad” (Eurodad, P: 73, 2016).

“According to the Financial Secrecy Index, Luxembourg has the highest level of financial secrecy of all the countries covered by this report (and ranks at number 6 at the global level). The government’s position on the issue of public registers of beneficial owners is unclear” (Eurodad, P: 46, 2016). “In spite of the LuxLeaks scandal, Luxembourg has continued to issue a very high number of advance pricing agreements (or ‘sweetheart deals’) to multinational corporations – with a 50 per cent increase during the year following the scandal. This, as well as the fact that Luxembourg generally has a significant amount of indicators of aggressive tax planning, is highly concerning. Also, on the issue of financial secrecy, Luxembourg remains a high concern – currently placed as number 6 at the list of the world’s most secretive countries” (Eurodad, P: 79, 2016).

“Netherlands currently has some extremely restrictive tax treaties with developing countries, which make it difficult for those developing countries to collect taxes. Netherlands generally also has more tax treaties with developing countries, and is more aggressive in negotiating the lowering of tax rates in developing countries, than the average among the countries covered in this report. In addition, the government does not levy withholding taxes on outgoing payments to tax havens, which would be an effective anti-abuse measure that would not require lengthy treaty renegotiations” (Eurodad, P: 46, 2016). “Leaked EU documents show that the Netherlands is attempting to undermine EU plans to tackle harmful tax practices by introducing a minimum tax rate of 10 per cent for royalties and interest payments. They reveal that the Netherlands has proposed exceptions in the plans for its patent box provision, which can reduce taxation on revenues resulting from research and development to 5 per cent. This provision, which is a key component of the Dutch tax system, would be threatened by a 10 per cent minimum rate” (Eurodad, P: 82, 2016).

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“Norway has a high number of ‘very restrictive’ tax treaties with developing countries” (Eurodad, P: 47, 2016). “Norway’s tax treaty with Benin completely prevents Benin from taxing royalty payments to Norway. This is problematic since multinational corporations can use royalty payments between subsidiaries to minimize their profits and thereby avoid taxes in the countries where they have business activities” (…) “Norway does not have a patent box. It does however have a very favourable tax regime for shipping companies, albeit in line with EU countries’ legislation. Shipping income is tax-exempt and qualifying companies instead pay a small tax based on the tonnage of its vessels” (Eurodad, P: 84, 2016).

“Poland has a significant number of ‘very restrictive’ tax treaties with developing countries” (Eurodad, P: 47, 2016).

“Spain has on average been the second most aggressive negotiator when it comes to lowering developing country tax rates through tax treaties. Spain also has a relatively high number of tax treaties with developing countries, which gives even more reason for concern” (Eurodad, P: 48, 2016). “Wealthy Spanish people have doubled their money stashed in Luxembourg (more than €13 billion) – afraid of uncertainty and looking for lower tax rates” (…) “Inside Spain, the Canary Islands (located close to the African Atlantic coast) have a special economic and tax regime that make them “one of the most profitable tax regimes in Europe”, according to PwC. A tax rate of 4 per cent for companies located there is one of the several tax benefits. Special incentives also are applied in Ceuta and Melill” (Eurodad, P: 90-91, 2016).

“Sweden has four ‘very restrictive’ tax treaties with developing countries” (Eurodad, P: 49, 2016).

“Together with Italy, the UK has the highest number of ‘very restrictive’ tax treaties with developing countries. On average, the UK’s tax treaties with developing countries contain relatively high reductions in developing country tax rates. The fact that the UK at the same time has the second highest number of treaties with developing countries gives even more reason for concern” (Eurodad, P: 49, 2016).

If this isn’t eye-opening, than I don’t know, but it shows the systematic state of easy taxation to benefit big-business, the multi-national companies, so they can set-up show and get grander profits, while the states works the perks between them to settle score. The negotiations and the tax-havens gives more space for the companies to fuel money out of Europe and of the Developing Countries, which hurts all sort of government operations as the end-game is that the government doesn’t get the supposed tax-base as that flee to offshore or overseas where the taxations is lax or non-compliance with the place the business actually operates. We all should get our MPs, Senators, MEPs, Governors and all other Elected Representatives, to take action against this sophisticated thieving from the Multi-National Companies and the Representatives who opens the gates for this activity. Peace.

Reference:

EURODAD – ‘Survival of the Richest – Europe’s role in supporting an unjust global tax system 2016’ (15.11.2016).

Brexit: Davis Davis proposition today not such an exit after all; pre-Brexit has proven implications for Central Bank of Ireland and Ofcom!

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I am sure today that Yes Minister is fitting as the quotes in Parliament and the previous uttering words of Boris Johnson about free-movement that counter all the work of the Brexiteers during campaigning for the cause. The work that we’re to pretend that the separation from the continent would be peaceful and jolly; but the Brexiteers didn’t know and the Tories still doesn’t know.

Therefore I begin with this a re-cap of TV in 1981:

“Sir Humphrey Appleby: Well, Minister, I’m afraid that is the penalty we have to pay for trying to pretend that we’re Europeans. Believe me, I fully understand your hostility to Europe.

James Hacker: I’m not like you, Humphrey. I’m pro-Europe, I’m just anti-Brussels. I sometimes think you’re anti-Europe and pro-Brussels” (Yes Minister – ‘The Devil You Know (#2.5)” (1981).

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Today the Brexit-Minister Hon. Davis Davis uttered these wonderful words in Parliament:

“The simple answer we have given to this before is, and it’s very important because there is a distinction between picking off an individual policy and setting out a major criteria, and the major criteria here is that we get the best possible access for goods and services to the European market. If that is included in what you are talking about then of course we would consider it.” (Watts, 2016).

So the ones leaving is now changing terms, they want to set standards that opens the market. While still being outside the Union, so the Brexiteers wants now to get the full benefit while being outside. This doesn’t fit with the hazardous statements from Martin Schulz and Jean-Claude Juncker who has said their peace about an easy transition!

Certainly the European Union wants to make an example of the United Kingdom and their markets; they have to pay dearly to be part of it, while wanting to secure their borders and movement. Now, the Davis Davis wants its simplified.

bank-of-ireland

Irish Central Bank sees this already:

“He said the Central Bank’s workforce planning for next year reflects the additional resource needed to deal with applications and contingency has been built in as it is expected that the financial sector will grow materially” (…) “Mr Roux told reporters after the Dublin event today that the Central Bank was seeing applications for new business and the licensing of firms who are not present here” (…) “He also said it was seeing very significant indications from “regulated firms that are small today but want to be big tomorrow” (…) “We see the whole gamut of firms enquiring for establishing or growing in Ireland, it is MIFID (markets in financial instruments directive) firms, insurance companies, CSDs (central securities depositories) and payments institutions,” he added” (Rte, 2016).

So when businesses are looking towards Dublin, which is in EU and already part of the European Single Market; the London based firms might move to Dublin to secure their profit-lines and such. Even the Central Bank of Ireland is seeing this. This must really hurt the Brexiteers who fought well, but didn’t think of the implications. Davis Davis sees this now and wants to be able to go out of being EU Member State, but still being part of EU Single Market.

That is really the Norwegian EFTA model, but they will have hard time and pay lots of funds to get what they have now and would also betray the democratic values of majority vote that wanted a true separation, which this isn’t. Then the Tories will do the same trick as the Norwegian Government did to their public, when they signed the EFTA and made agreements to join the EU Single Market, but not having the EU Member State privileges. Something the United Kingdom is losing with triggering the Article 50 of the Lisbon Treaty.

This is so special and so weird. That Hon. Davis Davis are acting and flip-flopping like this. Surely the warning from Ofcom must say something as well:

mou-scotland-ofcom

“Chief executive Sharon White said that the industries her organisation oversees are “inextricably European” and could be badly hit if they are not taken into consideration when arranging the UK’s exit for the EU” (…) “Making Brexit a success matters for communications – because these services are fundamental to our lives,” she told the Institute for Government in London” (…) “She said: “The country of origin rule is a good example of an EU law that benefits member states and supports broadcasters – providing a mass audience, and promoting cultural exchange by transcending borders” (…) “But keeping this principle after Brexit will demand constructive discussions with European neighbours. Country of origin cannot endure merely by virtue of existing in UK law.” (Sky News, 2016).

So with this the broadcasters like Ofcom and Central Bank of Ireland sees the implications of the Brexit with their bare eyes. The indications are not put in light of joy and positive future, as the Irish might get more business, this means that corporations moving to Dublin instead London, because of the safety of EU Single Market that the Hon. Davis Davis wish to keep and pay Brussels, but if the EU will accept it is mere speculation.

The Tories government has decides as the Prime Minister Theresa May has to make decisions that makes the Brexit successful. But early November 2016 a leaked memo showed that the government hadn’t done due diligence or check and balance for the industries. Which is evident with the corporations planning to move and Ofcom are sceptic to the Brexit itself.

Therefore the reactions to the Brexit will continue to come for businesses and for the Parliament; the House of Commons would surely be a bit shocked by the proposition from the Brexit Minister. We all are, not like Irish paying for Welsh roads, but still spectacular thinking about how the Brexit Campaign celebrated the idea of total freedom from EU. Now they want the perks, as long as the EU accepts the fixed payments for the entry to the Single Market. Peace.

Reference:

Rte – ‘Central Bank not seeking to dissuade UK financial firms from moving to Ireland – Roux’ (01.12.2016) link: http://www.rte.ie/news/business/2016/1201/835805-central-bank-says-not-dissuading-brexit-moves/

Sky News – ‘Ofcom boss warns of Brexit impact on UK communications sector’ (01.12.2016) link: http://news.sky.com/story/ofcom-boss-warns-of-brexit-impact-on-uk-communications-sector-10679371

Watts, Joe – ‘Brexit: David Davis says UK Government could pay money to EU for single market access’ (01.12.2016) link: http://www.independent.co.uk/news/uk/politics/brexit-single-market-access-david-davis-eu-money-uk-a7449416.html

Bank of England Statement on Polymer Banknotes (30.11.2016)

bank-of-enland-polymer-banknotes

Welsh politician: ‘Could Ireland use EU funds to pay for our motorway improvements?’ (Youtube-Clip)

“Ukip has asked the Welsh government to seek EU funding from the Irish government to help upgrade a motorway between London and south Wales. The M4 motorway is the main artery between the main cities of Wales and the rest of the UK – but it also carries a large amount of Irish goods exported and sold there. Ukip assembly member David Rowlands made the appeal to the Welsh National Assembly this afternoon. He says that Irish exporters also rely on the M4 to transport goods to other EU countries on the continent – and told TheJournal.ie that it is “quite a reasonable idea to explore”: http://jrnl.ie/3109404” (TheJournal.ie, 2016)

Britain won’t turn its back on Africa following Brexit (29.11.2016)

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There is clearly a need in the aftermath of Brexit for there to be a degree of reassurance given to Africa that Brexit doesn’t mean that the United Kingdom is going to turn its back on Africa.

ADDIS ABABA, Ethiopia, November 29, 2016 -Brexit does not mean that the British government will turn its back on Africa, Lord Paul Boateng, a Member of the United Kingdom’s House of Lords said Monday.

Speaking at the first ever Africa Trade Forum which is being hosted by the Economic Commission for Africa and the African Union, Mr. Boateng said Brexit presents Africa and the UK with an opportunity to “put development at the heart of our trading relationship with Africa in a way frankly that it has not always been in relation to the EPAs, let’s be frank about it”.

“The UK recognizes that and we will seek every opportunity to minimize the disruption in our trading relationship and take every opportunity to seize this chance to re-fashion the relationship between the UK and Africa in terms of trade so intra-African trade becomes an opportunity which we can seize together,” he said.

Contributing to debate on Africa-E.U. Economic and Trade Cooperation and Brexit implications for Africa, Mr. Boateng assured participants, including African Ministers of Trade, Finance and Transportation as well as senior government officials, heads of Regional Economic Communities (RECs), African CEOs and executives, representatives of international development agencies, civil society and others, that trade relations between the UK and Africa will not be affected following Brexit.

“There is clearly a need in the aftermath of Brexit for there to be a degree of reassurance given to Africa that Brexit doesn’t mean that the United Kingdom is going to turn its back on Africa and I’m able to assure you that right across the political divide in the UK, in both Houses, Africa and the UK’s historic link with Africa remains central to our thinking,” he said.

“Yes there’s uncertainty at this time, that is inevitable, when such a momentous decision is made,” SAID Mr. Boateng.

“Yes there is a hazard always when you think about the scale of the task that lies ahead in terms of mapping out the future of the trading relationship between the UK and Africa but I think I can give the absolute assurance that we see this in the UK as an opportunity to be seized.”

He said he was concerned by the issue of infrastructure in most African countries. Mr. Boateng was born and brought up in the Gold Coast in Ghana.

“I am the grandson of cocoa and cassava farmers. My grandmother grew cassava, my grandfather grew cocoa and when I look at our village in Tafo in the eastern region of Ghana, two things strike me, first of all, that in the 1950s there was a direct rail link between Tafo, a heart of cocoa growing region and Takoradi, which at that time was our main port,” he told participants.

“That rail link no longer exists and that has had a damaging effect on agriculture in Ghana but Ghana is not alone in seeing the deterioration of its infrastructure so the United Kingdom recognizes the importance of infrastructure in terms of promoting intra-African trade.”

“The second matter which I can’t but help notice, he said, is that right next door to my grandmother’s farm was a West African Cocoa Research Institute and that was a major resource for West Africa in terms of agricultural support and extension and research at the highest level so it produced every year a handful of PhDs now sadly due to decades of neglect and the impact of the structural adjustment of the 70s and the 80s, that emphasis on higher education and the link between higher education, science, technology and innovation and agriculture simply went now we are seeking to revisit that but I would argue that that too is a very important part of our struggle in order to increase agricultural productivity of Africa.” 

“Without that we are going to be in difficulties but the good news is it seems to me that is changing and the UK and our department of international development is making its contribution to that,” Mr. Boateng said.

Participants will be in Addis Ababa for the week attending the first ever Africa Trade Week, a multi-stakeholder platform for the advancement of the Continental Free Trade Area (CFTA). And intra-African Trade.

Brexit: Labour has plans to counter the non-existence “Moving-On” plans of the Tories!

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Its days after and just two weeks after leaked Memo that said how little plans the Conservative Party or Tories Government had. So this report is a answer to that. Like the certain quote of the memo:

“The divisions within the Cabinet are between the three Brexiteers on one side and Philip Hammond/Greg Clark on the other side. The Prime Minister is rapidly acquiring the reputation of drawing in decisions and details to settle matters herself – which is unlikely to be sustainable. Overall, it appears best to judge who is winning the debate by assuming that the noisiest individuals have lost the intra-Government debate and are stirring up external supporters” (Sky News, 2016).

When the matter comes into the light like this; it’s fruitful to see that the major Opposition Party have now showed alternative path or at-least thought things through where they have propositions to a counter-party that doesn’t care for fulfilling their mandate and exercising the vote of the people.

Theresa May, was voted into the Parliament to be MP and not a PM. Therefore she might forget how to get the popular vote and get consensus. Here is one set of ideas and suggestions to how to make amends of the Brexit. This is worth listening to and also reading to get ideas of how to fix the problems of the European Union and the United Kingdom. Take a look!

Infrastructure Policy:

“So what should be done? Brexit offers British policy-makers the opportunity to step back and examine the future direction of infrastructure and housing policy. The Autumn Statement should be used signal a change in direction towards an economic strategy which uses infrastructure and housing policy as a tool to boost growth and productivity in regions that have suffered a lack of investment” (Moving On, P: 12, 2016). “Ignore this problem and it is clear that unity in our divided country will be even further away. Accept the challenge, take steps to rebalance investment, and the United Kingdom has half a chance at sticking together“ (Moving On, P: 14, 2016).

Working Policy:

“First, he should do all that he can to stimulate investment in innovation. Coming up with new ideas, products and services which the rest of the world wants to buy is the best way we can remain internationally competitive post Brexit without seeking to pursue an alternative strategy, advocated by those on the Right, of making our labour markets ever more flexible and embarking on a race to the bottom on people’s terms and conditions of work. Innovation will also help improve UK productivity which is 18% below the G7 average, the largest gap since 1991 when the ONS started collecting such data” (Moving On, P: 19, 2016). “Limited digital connectivity is one of the biggest barriers to business and Ofcom estimates that 1 in 5 small business premises will still not be able to access superfast broadband without further action from government. The Universal Service Obligation – which sets a target of all homes having 10MB per second speeds by 2020 is nowhere near ambitious enough – a more ambitious target and timeframe for delivery should be set if Britain is to be at the forefront of the fourth industrial revolution” (Moving on, P: 22, 2016). “The biggest boost he could provide is by declaring that the Government’s goal during the Brexit negotiations is to continue with the UK’s membership – not just access to – the European Single Market, as I set out in my speech to the Centre for Progressive Capitalism last month” (Moving on, P: 24, 2016).

Skills/Education:

“The National Audit Office for instance has recommended that the Department of Education should set out the planned overall impact of its apprenticeships policy on productivity and growth, along with short-term key performance indicators to measure the programme’s success. The Government must also adequately fund welfare-to-work in the Autumn Statement, get a grip on inclusive regional growth and ensure that welfare-to-work helps those in areas with high unemployment and not just those who find it easiest to get back into work. As the Science and Technology Select Committee has said, the Government should now publish its Digital Strategy policy without further delay and include goals for developing better basic digital skills and increasing digital apprenticeships as well as providing a framework through which the private sector can more readily collaborate with communities and local authorities to raise digital skills in local SMEs” (Moving On, P: 30, 2016).

Welfare:

“The ‘digital skills gap’ meanwhile has been estimated as costing the economy £63 billion a year in lost additional GDP. Also holding us back from the high tech economy of the future is the lack of new engineering and technology recruits meeting employers’ expectations. We are also facing an engineering ‘retirement cliff’ with the average engineer currently in their fifties.18 According to the Engineering UK 2016 report, engineering employers have the potential to generate an additional £27 billion per year from 2022 but only if we can meet the forecasted demand for 257 000 new engineering vacancies.19 And these are exactly the type of professions we need to build our industries and export to the world after we leave the European Union” (Moving On, P: 28, 2016).

Welfare II:

“Firstly, he must reverse cuts to Universal Credit (UC) and restore confidence after the programme’s chaotic introduction so it genuinely provides an incentive to work. Secondly, the Chancellor has to do more to help parents join or re-join the workforce and give every child the best start in life. We should move towards a system of universal free childcare for all working parents of pre-school children, starting with free childcare for all two year olds” (…) “There is also a worrying picture on pay progression too. Universal Credit was intended to help workers move onto higher pay levels, as well as get a job in the first place. But as the Resolution Foundation has said “implementation realities scuppered the ambition of the design”. The likely result is that UC will leave an increasing number of workers stuck on the minimum wage when they should be looking to earn more” (Moving On, P: 32-34, 2016).

Championing Key Sector:

Because Brexit austerity could last beyond a conventional economic cycle, it will require fundamental policy change and supply-side efforts to counteract. Take, for example, the risks now hanging over the financial services sector – which represents 12% of our economic output, nearly two million jobs in the UK and which generates £67billion of revenues for the public purse. It’s not simply a case of having an ‘industrial strategy’ to play to this core comparative advantage for the UK. We will need to negotiate long term access to EU markets where a whole series of product lines face the prospect of being banned and outlawed. Should this turn out to be the case, and the cluster of specialisms in UK financial centres erode with core competences like clearing relocating to Frankfurt or to New York, then we lose a vital skills infrastructure as well as year by year corporation and income tax revenues” (Moving On, P: 38, 2016).

“So we should test the Autumn Statement for whether it counteracts the looming Brexit austerity and whether it can deliver access and opportunities for sectors under threat, like financial services. Yes, there are reforms still needed to many of the tax regimes in which the financial services sector operate. Some lucrative practices need loopholes closing – for instance in the taxation of financial spread betting or old Osborne legacies such as the wasteful ‘shares for rights’ dodge that is rife for abuse” (Moving On, P: 2016).

This here shows the proofs that the Labour Party can have things that works for the nation, if they get people to believe it, but the simplistic dogma of the Tories is sold to the commoners like coke and cheddar cheese, while the Labour Party message is a rock to hit your head instead of being served feasible to the public. Therefore the Labour has to change their ways of sending their message and make sense to the ones blinded by the PM May and her deceptive tone of arrogance from White Hall. Peace.

Reference:

Alison McGovern MP, Chuka Umunna MP, Shabana Mahmood MP, Rachel Reeves MP & Chris Leslie MP – ‘Moving on – A Labour approach to the post-Brexit economy’ (November 2016)

Sky News – ‘Leaked memo shows Government’s lack of Brexit plans’ (15.11.2016) link: http://news.sky.com/story/leaked-memo-shows-governments-lack-of-brexit-plans-10658063/revision/1479197701

Jon Stewart on President-elect Trump, hypocrisy in America (Youtube-Clip)

Opinion: Leaked Memo shows that PM May and her Cabinet has a true disregard for the Brexit!

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There are some days that just have to grow upon you, as the news we’re coming on the matter, Davis Davis, the Member of Parliament who was named and appointed to be the Brexit Minister of Davis Michael Davis. As long as you have loudmouth Foreign Secretary for the United Kingdom Boris Johnson, another Brexiteer who hasn’t delivered anything that matter on the Article 50 of the Lisbon Treaty or anything else.

So the Conservative Party under Prime Minister Theresa May has a Cabinet that doesn’t even consider the Brexit vote and the public wish to leave the European Union. Something the backbenchers of the Conservative Party didn’t fight for anyway. Except for the ones who renegaded against the than PM David Cameron.

So the months has gone, and September there we’re even reports that Brexit Minister Davis Davis we’re living the life of lavish MP, but not acting upon the election that offered him the job in the government.

So he has been a ghost and undetermined person. As shown with the words of the leaked memo yesterday: “The divisions within the Cabinet are between the three Brexiteers on one side and Philip Hammond/Greg Clark on the other side. The Prime Minister is rapidly acquiring the reputation of drawing in decisions and details to settle matters herself – which is unlikely to be sustainable. Overall, it appears best to judge who is winning the debate by assuming that the noisiest individuals have lost the intra-Government debate and are stirring up external supporters” (SkyNews, 2016).

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The PM May has to sort out her house and make sure the dishes is washed inside the kitchen before the food is served. Brexiteers hasn’t seemed to pushed hard if the dishes are just staying dirty and not worked on. And the PM May doesn’t seem interested in change the state of affairs, because she want to steer the ship herself without listening to the cabinet, that will be a good leader, but a selfish one it seem.

“Individual Departments have been busily developing their projects to implement Brexit, resulting in well over 500 projects, which are beyond the capacity and capability of Government to execute quickly. One Department estimates that it needs a 40% increase in staff to cope with its Brexit projects. In other words, every Department has developed a “bottom up” plan of what the impact of Brexit could be – and its plan to cope with the “worst case”. Although necessary, this falls considerably short of having a “Government plan for Brexit” because it has no prioritisation and no link to the overall negotiation strategy” (SkyNews, 2016).

So there is no distinctive negotiation strategy for the Brexit, as the Prime Minister Theresa May already proven to be selfish and wanting to take the decisions on her own, instead of listening to the ones she has appointed for her cabinet. This proves the little value the PM has in her own as she doesn’t care for listening to Secretary for Brexit Davis or anybody else.

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Departments are struggling to come up to speed on the potential Brexit effects on industry. This is due to starting from a relatively low base of insight and also due to fragmentation – Treasury “owning” financial services, DH-BEIS both covering life sciences, DCMS for telecoms, BEIS most other industries, DIT building parallel capability focused on trade etc” (SkyNews, 2016).

Another one of the nonsense that the Departments are not focused or working together to know the effects of an actual leaves the European Union and the trading with the Member States of the EU. How the Departments are effected by Brexit that should be checked and made sure by the Ministers and through the back-channels to make sure the Industry are getting a good as possible place with their trade. Instead of finding out the real potential of the industrial production and the needed changes that might be there after the actual Brexit.

“Industry has two unpleasant realisations – first, that the Government’s priority remains its political survival, not the economy – second, that there will be no clear economic-Brexit strategy any time soon because it is being developed on a case-by-case basis as specific decisions are forced on Government” (SkyNews, 2016).

So another statement showing the disgraceful attempt of silencing internal movement of the Brexit; they didn’t show any clear economic-Brexit strategy, but the decisions are not made as there is apparently no will for the Cabinet and Conservative Party Government and the PM May. That shows the disrespect the Government that been made after the PM David Cameron showed grace and stepped down. Because he had no real plan to leave the Union he had cooperated so well with during his years in Cabinet and in Parliament.

Peace.

Reference:

Sky News – ‘Leaked memo shows Government’s lack of Brexit plans’ (15.11.2016) link: http://news.sky.com/story/leaked-memo-shows-governments-lack-of-brexit-plans-10658063/revision/1479197701

Footage: Ill Doctrine – What Happens Now?

FYI: President Trump will create a Banana Republic out of the US!

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Well, ladies and gentleman the super-power called the United States of America, is a dying dinosaur that Michael Moore or even Jay-Z doesn’t have the power to change. Today was a shock for many, even for me as the American Electorate decided to elect a Demagogue of ill-rhetoric towards certain ethnic groups like the Latin-American, Women and so-on. Donald Trump in his power and commander-in-chief will remarkably create havoc.

All of this is well known, but what the United States’ citizens didn’t think about when they voted against the establishment on protest against the D.C. power-structure they voted for a man with certain traits that can put certain pieces of the Government into shambles. So before I start; for those of you who don’t know, here is the definition of a banana republic!

“It was coined in a 1904 book of fiction by O. Henry, an American writer. Henry (whose real name was William Sydney Porter) was on the run from Texan authorities, who had charged him with embezzlement” (…) “His phrase neatly conjures up the image of a tropical, agrarian country. But its real meaning is sharper: it refers to the fruit companies from the United States that came to exert extraordinary influence over the politics of Honduras and its neighbours. By the end of the 19th century, Americans had grown sick of trying to grow fruit in their own chilly country. It was sweeter and cheaper by far to import it instead from the warmer climes of Central America, where bananas and other fruit grow quickly. Giants such as the United Fruit Company—an ancestor of Chiquita—moved in and built roads, ports and railways in return for land. In 1911 the Cuyamel Fruit Company, another American firm (which was later bought by United), supplied the weapons for a coup against the government of Honduras, and prospered under the newly installed president. In 1954 America’s Central Intelligence Agency (CIA) backed a coup against the government of Guatemala, which had threatened the interests of United. (Historians still debate whether the CIA’s motive was to protect United or, as many now believe, to nip Communism in the bud.) Hence the real meaning of a “banana republic”: a country in which foreign enterprises push the government around” (The Economist, 2013).

Why do I believe this, it’s because of all his sort-of promises over the months. There is all kind of activities that proves the clear indications of a Banana Republic on the rise. The Americans might think otherwise, that is because there are blind on how the state really is.

The United States recorded a Government Debt to GDP of 104.17 percent of the country’s Gross Domestic Product in 2015. Government Debt to GDP in the United States averaged 61.94 percent from 1940 until 2015, reaching an all time high of 121.70 percent in 1946 and a record low of 31.70 percent in 1974. Government Debt to GDP in the United States is reported by the U.S. Bureau of Public Debt” (Trading Economics).

So the average debt level or ratio is staggering already. This is not tackled because the creditors accept the debt levels are raising, just as seen with the numbers from Trading Economics are showing during 30 years the percentage has gone up over 70 %, which should be frightening to any economy. When you have that level of debt, you should be able to have a heavy tax-base to collect and pay the debt.

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Taxing under Trump:

“US taxes are low relative to those in other developed countries. In 2012, US taxes at all levels of government represented 24 percent of GDP, compared with an average of 34 percent of GDP for the 34 member countries of the Organisation for Economic Co-operation and Development (OECD)” (…) “The United States collects relatively less revenue dedicated to retirement, disability, and other social security programs—22 percent of total tax revenue—than the 26 percent OECD average” (…) “Property taxes provided more than twice as large a share of US tax revenue—12 percent in 2012—than the OECD average of 5 percent. Almost all revenue from taxes on property in the United States is collected by state and local governments” (…) “The United States relies less on taxes on goods and services (including both general consumption taxes and taxes on specific goods and services) than any other OECD country, collecting 18 percent of tax revenue this way compared with 33 percent for the OECD. The value-added tax (VAT)—a type of general consumption tax collected in stages—is the main source of consumption tax revenue, employed worldwide in 160 countries including all 34 OECD member countries except the United States. Most consumption tax revenue in the United States is collected by state and local governments” (Hoo & Toder, 2006).

So when the Federal and Republic itself has such a giant debt ratio, the taxes should be high and should be to the levels of actually having the ability to pay it back. As they do not even have VAT on goods that is very normal world-wide, but apparently isn’t a thing in the United States. This proves the mismanagement of potential tax-base that the Government need to succeed to pay their debt. This is before the Election yesterday.

This is the taxes planned under Trump: “According to the Tax Foundation’s Taxes and Growth Model, the plan would reduce federal revenue by between $4.4 trillion and $5.9 trillion on a static basis. The amount depends on the nature of a key business policy provision” (…) “After accounting for the larger economy and the broader tax base, the plan would reduce revenues by between $2.6 trillion and $3.9 trillion after accounting for the larger economy, depending on the nature of a key policy provision” (…) “On a static basis, the Trump tax plan would increase the after-tax incomes of taxpayers in every income group. The bottom 80 percent of taxpayers (those in the bottom four quintiles) would see an increase in after-tax income between 0.8 percent and 1.9 percent, under both policy assumptions.  Taxpayers in the top quintile would see a 4.4 percent increase in after-tax income under the higher-rate assumption, or 8.7 percent under the lower-rate assumption. Those in the top decile would see a 5.4 percent increase in after-tax income under the higher-rate assumption, or 9.3 percent under the lower-rate assumption. Finally, taxpayers in the top 1 percent would see the largest increase in after-tax income on a static basis, driven by both the lower top marginal tax rate and the lower corporate income tax. Under the higher-rate assumption this increase would be 10.2 percent, and under the lower-rate assumption this increase would be 16.0 percent” (Cole, 2016).

So when the government are axing it income, while the economy running on a deficit your making no-sense. Your continue to spend on deficit while cutting taxes; the taxed ones are the ones who voted for Trump, the bottom 80% will get higher taxes, while corporations and 1% riches will get less. So the richer will get richer. A real proof of a Banana Republic where the solidarity towards the ones who needs so. They who voted for him is the ones that will pay on his tax-plan, which is ironic.

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This is on the direct economic sense, now on health care. Here he proves again he will hurt the ones who voted for him, the poor and what is left of the working-class:

“The policies would cause almost 21 million people to lose their insurance coverage, as the replacement health care policies would only cover 5 percent of the 22 million individuals who would lose coverage upon the repeal of Obamacare. This would almost double the number of Americans without health insurance” (…) “The largest component of this estimate comes from the “repeal.” The campaign website proposes to “completely repeal Obamacare,” which we assume to mean repealing the Affordable Care Act’s regulations, subsidies, Medicaid expansion, Medicare savings, and tax increases. Although repealing the coverage provisions would save about $1.1 trillion, based on Congressional Budget Office (CBO) estimates (adjusted for recent legislation and changes in the budget window), repealing the legislation’s tax increases and Medicare cuts would cost a combined $1.6 trillion. In total, this means repeal would cost $480 billion – or $260 billion including the economic benefits of repeal” (Committee for a responsible Federal Budget, 2016).

So the Trump Administration are planning to hurt their own, the ones that has gotten through the Obamacare gotten some sorts of subsidized medical insurance, something he wants to repeal and will even make sure to cost the state more. So the educated minds will know that people has to carry insurance on their own while the state pays more to abolish the Obamacare. The 21 million individuals will regret questioning the medical treatment through Obamacare, as the Federal State will add more money. So the people are getting higher tax for the same 80% who losing their health insurance. Do the American citizens prefer punishing themselves?

As with the true implications of NAFTA:

“Customs duties reductions led to increases in trade with the other two countries of 11% in Canada, 41% in the United States, and 118% in Mexico, for the period between 1993 and 2011.5 In terms of value, American trade with Canada and Mexico increased from US$481 billion in 1993 to US$1.1 trillion in 2015. While Donald Trump claims that Americans “don’t make anything anymore,” implying that NAFTA is to blame, the American manufacturing sector has increased production by 58% since the deal came into effect” (Bedard, 2016).

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So the results of NAFTA are apparently different in reality than what comes across when coming to Trump, so the reality hasn’t mattered. He wants to dissolve or change the rules and regulations, this will make it harder to export and import products between Canada and Mexico into the United States. The United States need free-movement of products and industrial products to be able to have the Corporate Capitalism that drives the USA.

So with lower taxes in general, a higher cost of health-care without concern for the 21 million without health insurance. They now are getting more problems with exporting and importing the needed products and raw-material has been possible and even at longest part of the NAFTA agreement has been positive to the US. So the regulation and cooperation with neighbours will be harder because of barriers that will be created with abolishing the NAFTA.

This is still all economic implications… then you have the gun-control, the war-lord aspects and the other social policies mixed with the economic aspect that turns the ones giant and great nation into tatters, if the President Donald Trump gets to do as he pleases without questions.

We should consider it with the implication on the policies and the foreign affairs. The US Government would lose with their plans on playing hardball with NATO and others. With the Muslims ban and deportation, also the Latin-American population that has been singled out; these groups can hurt the economy and also the basic workforce who does the needed services needed in society. That these will be sent out because of their ethnicity and faith will also prove that the United States isn’t the leaders of free-world, but another tyranny under President Trump. The fear and loathing of the Republican President Trump! That will do like the Americans did during Second World-War when Japanese for being so we’re detained into camps, or if he pleases send them packing.

This racial laws and deportations will hurt the economy and make sure the state becomes a Banana Republic; What is special is that the United States will have a free-flow of guns, ammunition, but will make it harder to import goods and also export goods with worse deals, have lesser taxes, still high debt yield and add expenses on health-care while the citizens has to cover themselves. This while the US President hasn’t a plan to help lower-classes as the minimum-pay or salaries increase for the 80% who still get added tax, also pay more for health care. The US Electorate got all reasons for feeling foolish if they even read this.

Bananas and Banana Company we’re President William Howard Taft did what he could to save the companies. Now the new President might try to replicate this, but he forgets the needed international community and production as the needed bolts, tools and manufacturing are inter-connected. That is something that the modern day President Trump needs.

Side Note – International Partnerships:     

So if he builds walls, gets into whiny bitch mode and becomes a fully-blown attack paranoid mode, than the international partners will not accept being constantly bullied. I am sure that Philippines C-I-C President Rodigro Duterte will be tossed around for another power or human being. Neither will Russian President Vladimir Putin and even German Chancellor Angela Merkel will not accept it. So the price of him being brash and irresponsible thin-skinned versus the ones that questions his actions or words, isn’t really suitable with the trading partners and allies that the U.S. still needs. The US doesn’t live in a vacuum and not the only one with a giant defence and has much money to spend like on AGOA and others.

So congratulation on becoming a Banana-Republic, ready to become muffled with after playing king-pin… for decades; as your economic prospects under the Trump Administration and regime doesn’t look healthy. Peace.

Reference:

Bedard, Mathieu – ‘NAFTA: DONALD TRUMP’S CRITICISMS ARE UNFOUNDED’ (07.2016) link: http://www.iedm.org/files/lepoint1016_en.pdf

Committee for a responsible Federal Budget – ‘Analysis of Donald Trump’s Health Care Plan’ (09.05.2016) link: http://crfb.org/blogs/analysis-donald-trumps-health-care-plan

Cole, Alan – ‘Details and Analysis of the Donald Trump Tax Reform Plan, September 2016’ (19.09.2016) link: http://taxfoundation.org/article/details-and-analysis-donald-trump-tax-reform-plan-september-2016

Hoo, Sonya & Toder, Eric – ‘The U.S. Tax Burden Is Low Relative to Other OECD Countries’ (08.05. 2006) link: http://www.taxpolicycenter.org/publications/us-tax-burden-low-relative-other-oecd-countries

The Economist – ‘Where did banana republics get their name?’ (21.11.2013) link: http://www.economist.com/blogs/economist-explains/2013/11/economist-explains-16

Trading Economics – ‘United States Government Debt to GDP  1940-2016 | Data | Chart | Calendar’ link: http://www.tradingeconomics.com/united-states/government-debt-to-gdp