Update: also see Anti-Tax, Anti-Regulation Sirens emerge after Brexit.
We have our own particular reasons for disliking Brexit – the recent decision by the UK to leave the European Union. In a pre-Brexit analysis the Tax Justice Network quoted Adam Posen, director of the Peterson Institute for International Economics, who articulated a huge generic concern:
“If you’re anti-regulation fantasists to begin with, you start going down the path, ‘Oh we can become an even more offshore center. We can become the Cayman Islands writ large, or Panama writ large.’ And this frankly is the way I think this also spills over to the rest of the world, is that the UK decides, ‘Hey, regulatory arbitrage, letting AIG financial products run in London, actually destroyed the US financial system, but didn’t hurt us – made us a lot of money. Let us continue down this path. Let us be the ‘race to the bottom’ financial center. And I think this that’s where this going, because they’re not going to have any other option. It’s not good.”
The British-based non governmental body Actionaid has for some time been at or near the forefront of efforts to lobby for progressive reforms to the international tax system for the benefit of developing countries. This week their ‘Tax Justice Policy Adviser,’ Diarmid O’Sullivan, wrote a blog entitled The UK: always the bad guy on anti-tax haven rules? which says, in the first paragraph:
“Poorer countries badly need more tax revenues to pay for public services such as schools and hospitals, but they stand to be among the losers from the UK’s insistence on protecting its “competitive” low-tax regime for companies.”
We’re really delighted to see the c-word in quote marks: it’s an important signal that the writer has seen through the nonsense of so-called ‘competitive’ nation states.