The Significance of Significant

There is an excellent line in the BBC TV series, Yes Minister where the hapless Jim Hacker is being badgered by a group of eco-warriors about plans to allow development on a nature reserve.

He had announced changes to the planning laws which offer “no significant reduction in protection” for protected areas. When annoyed that he had said that there was no reduction in protection, when there would be, the suave Sir Humphrey pointed out that he had said “no significant” reduction.

As he noted, it is wise to be aware of the significance of significant.

Wise to this, I also tend to look for such key phrases in government declarations and found a good one this morning.

Last week, The Economist newspaper ran an article pointing out the hypocrisy of the USA in calling for a clamp down on tax-havens, when several US states behave as de facto tax havens themselves.

Disclosure is the key issue for the tax haven debate, so that people cannot hide their wealth from their resident country and refuse to declare how much is overseas. Generally, tax havens with banking secrecy offer to pay a “withholding tax”, which is basically “here is a cheque for x amount, but don’t expect an itemised invoice”.

As the newspaper noted “A money-laundering threat assessment in 2005 by the federal government found that corporate anonymity offered by Delaware, Nevada and Wyoming rivalled that of familiar offshore financial centres. For foreigners, America is a particularly attractive place to stash cash, because it does not tax the interest income they earn. Thus with both anonymity and no taxation, America offers them all the elements of a tax haven.”

Yesterday the G20 announced that the OECD would publish a list of tax havens, and this morning, I eagerly checked my RSS feeds, and the (pdf file) report was there for me to read.

In the list of good countries – is the USA, which seemed to contradict the facts of the matter.

But, what does the table header actually say?

Jurisdictions that have substantially implemented the internationally agreed tax standard

Ahhh, so the USA (and UK etc) can be classed as nice boys, even if they haven’t actually implimented the requirements to be classed as a good boy.

It’s a bit like giving a gold medal to someone who should have got the bronze.

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1 Comment

  1. The possibility of paying less tax always leads to hypocrisy. Look at the Government Tsar in charge of bring the banks to book over their tax avoidance; it was recently revealed in the press that he’s got about £3 million in an offshore account in Jersey.

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