Taxes Civilisation: 7th Heaven?

For two year the OECD has named and shamed tax havens. The last list included the dirty seven. It's not often that Monaco and Liechtenstein get to share an unattractive spotlight with Vanuatu and Liberia. This is an incredibly effective initiative of the OECD: the original list in 2000 contained 35 countries, but public humiliation has brought reform in most.
If the price of civilisation is taxation there was something rather vital about those Enron corporate legal proceedings that wasn't made clear in most press reports. It was the fact that among the loopholes used to reduce the Enron’s tax liability was the creation of more than 800 subsidiaries in ‘tax havens’ such as the Cayman Islands. Many are not aware that the analysis of financial documents showed that Enron paid no corporate income taxes in four of the last five years-- although the company was profitable in each of those years.

Global corporations are using a sly accounting trick called transfer pricing in 'accountant speak' to bilk the federal government out of billions annually. In the post-Enron era, this revelation may not be all that shocking, except for the fact that this tactic is also being used to launder money that's used to finance terrorism.
Between 1998 and 2001, the federal treasury lost out on more than $175 billion in tax revenue when parent companies hid profits by exaggerating the prices at which they traded goods with their foreign subsidiaries. For example, a U.S. manufacturer might export products to its subsidiary in Papua New Guinea at below-cost prices and then have the subsidiary resell the products at an exaggerated profit. The high profit made by the foreign subsidiary is then offset by the loss, thus avoiding the payment of US taxes.
· The News of the death of trust are not exaggerated [Taxpayer]

It's not our fault. Really it's not. The criticisms are unfair, unreasonable, unbalanced. No sooner had the royal commission lawyers presented their submissions about what - and who - went wrong at HIH, than the targets were returning fire. Don't blame us - or at least don't blame me. Blame, er, him, or, er, them - or just circumstances beyond anyone's control.
· HIH: Placing the Blame [SMH]

Mistrust is not bad in itself. A polity of suckers is no better than a nation of cynics. But both mistrust and trust should be thoughtful, not automatic.
· Trust [The Atlantic Monthly]

Hot Off The Press: Whistleblower demoted
A former international executive for Wyeth, the U.S. drug company, uncovered a worldwide practice of cheating governments out of taxes, only to be demoted after notifying senior executives, according to documents in a state lawsuit that he has filed against the company. The executive, Peter Rost, said that in 2000, as he worked to get the company to correct the first tax problem he learned about, in Sweden, he learned that the practices were common in Wyeth's operations worldwide.