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(Narrator): Throughout
the world, inequality is

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soaring to new heights.

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And the wealth of nations
that once provided prosperity

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for the majority,
has gone missing.

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This is the story of powerful
forces deepening the divide

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between the few and the many.

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-Does Apple Inc. own directly
or indirectly AOI, AOE and ASI.

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-Yes, Apple Inc. owns directly
or indirectly AOI, AOE and ASI.

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-AOI is incorporated
in Ireland, is that correct?

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-Yes, Mister Chairman, it is
incorporated in Ireland.

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-And where is AOI
a tax resident?

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-It does not have
a tax residency.

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-We tend to imagine that
the fiscal state has existed

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forever. We look at a political
map in particular, we see

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those flat areas of color with
little black lines around them,

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that's Britain or that's France
and we think that's existed

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for all time. And that linked
to that territory is an economy

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and that's the fiscal state.
Within that territory,

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we raise taxes, we distribute
welfare, and we understand

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how that works. But of course it
hasn't existed for all time.

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There was a period before
we had a welfare state, we had

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the welfare state under
a certain set of conditions

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and those conditions
have changed.

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-For me, the history
of the liberal state is

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the history of the middle class.

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You see, the middle class and
those prosperous working classes

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that become this modest
middle class, they were

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the big winners. It was their
state. The elites didn't

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really need it, they needed
a bit, they used it a bit.

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This was another world then and
it was really a different epoch.

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The golden decades
of the liberal state which is

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also the welfare state, I think
they're gone, they're finished.

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This liberal state is in decay.
So here are these middle classes

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revolting. The sons and
daughters really, it's like

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a forth of fifth generation
after World War II, which

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suddenly finds the social
contract is broken.

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-Until our study in 2012,
there was no systematic

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estimate for the size and growth
of private wealth held through

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offshore havens.

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The global total was
astronomical.

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It was 21 to 32 trillion
as of year-end 2010.

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And it has continued
to grow since then.

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We are talking about 10 to 15%
of the world's financial

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wealth basically being invested
offshore, beyond the reach

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of tax authorities.

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-Tax Justice Network is,
and I mean I know the guys

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who run it, they're fascinating
people, I think they're

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misguided, but they are
fascinating and they're very

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well intentioned in terms
of they really believe

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in this stuff.

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But they're not, Tax Justice
Network, doesn't have a huge

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staff of trained economists
like the OECD or the IMF.

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-I put the question to former
deputy director of the IMF,

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just last year you've got 3000
economists between the World

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Bank and the IMF. I can't find
any literature on tax havens.

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Why is that? He said: "You know,
it's very simple. Several

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of the most important tax
havens are our members."

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-To understand the relationship
between the City of London

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and the metropolis of London,
you need to understand

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a little bit of the history.

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When William the First came
to Britain from Normandy,

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the French King, to conquer
the rest of the country,

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he stopped at the gate
of the City of London.

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He never finished the job.
The French never finished

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the job. And the city maintained
the rights and privileges

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that had existed
in King Edward's day.

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-Many of the things the Monarch
gave was protectiveness,

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so we could restrict trade
to the level we wanted to.

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I mean today, you would actually
probably be in a court defending

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it as a cartel or something,
but that was the way it was.

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We own all the bridges across
the Thames over the years

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from taking tolls over
the bridges. We've built

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quite a substantial amount
of money, which we use

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for the benefit of the nation.
But one of the primary is

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to protect, promote London's
financial services

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on a global basis.

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-The Square Mile of the City
of London retains all the

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ancient rights and privileges
and resources of the ancient

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City of London. And the people
who live outside the Square

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Mile, those 8 million of which
I am one, don't share

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in those resources, although
we are citizens of London.

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-So this is the city. We use
this for planning and showing

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and it's interactive, you can
find out where you want to be.

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We own about 25% of the city,
the corporation. But as I say,

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there's now more foreign
investors that own the city,

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than domestic.

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-And what you have today,
you have this institution

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that promotes the single
interest of finance capital.

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It's using this huge network
of resources to promote

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the single issue
of finance capital.

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It's a travesty
of its history.

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-We do produce an awful lot of
money. What's good for the city

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is good, good for the country,
providing that that money is

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earned fairly and squarely
and doesn't jeopardize

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the wealth of the nation,
which it has done. So, you know.

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(protesters)

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Nobody in my view had the right
to pitch a tent on a public

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highway and stay there and
decide and tell the authorities

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when they might wish to leave.

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I went there because at that
time, I felt there was nobody

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putting out the case.
They wanted to abolish

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the City Corporation and
everything else. I thought

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I'll go there and I'll
try and have a debate.

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The financial services industry,
it produces about 65 billion

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in taxes, 35 billion in overseas
surplus. It's been very

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successful because apart
from anything else, many

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of the other industries
of course, that used to be very

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successful in Britain have
withered away. And I don't

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make any apologies for being
successful. I don't make any

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apologies of being
number 1 in the world.

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-So far from being a success
story, I regard the City

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of London as the world's biggest
tax haven, attracting billions,

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hundreds of billions of dollars
of wealth out of Africa, out

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of Asia, out of Latin America,
out of Europe, out of Greece,

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out of Italy, to where it's
misused by the City of London.

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Stuart, I'd would welcome it
if quite a few of our bankers

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left as quickly as possible.

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(screams and applause)

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-More or less a half of
the whole global offshore

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system is in some way British,
particularly the Crown

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dependencies and overseas
territories. And these are

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in a sense fragments
of the British Empire.

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After the Second World War
particularly, you had a very

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rapid phase of decolonization.
The British Empire effectively

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collapsed. And just at that
moment, you had the birth

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of a new market in London,
the so-called Euro markets

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or Euro dollar markets, which
was essentially an unregulated

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market for dollars.

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-When the Bank of England made
a decision to allow dollars

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to be traded outside
of the Federal Reserve,

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because of a quirk of British
law, it didn't have to define

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where it was to be traded.
All that mattered was that

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it was no longer to be traded
through New York banking

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system. But not defining where
trade was to take place,

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effectively, it meant that
the trades were taking place

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depending on how you understand
it anywhere or nowhere.

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-The Bank of England basically
deemed this transaction as if

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it all takes place in London.

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It seems they don't take place
in London, then London doesn't

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regulate this transaction.

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But then nobody else can
regulate this transaction

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because they actually take
place in London.

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The result is they created
an offshore market, which is

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unregulated.

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By the 1960's, the large
American banks grasped and began

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to understand that actually
by operating through London,

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they can avoid all sorts
of regulations and the market

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exploded.

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The poor Canadian banks also
wanted to take advantage

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of London, but London's
expensive. And somebody hit

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on the idea. I don't know whom,
but somebody in the Bank

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of Nova Scotia from what
I understand, he hit on the idea

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that in fact because Cayman
Island is part of the,

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is a dependency of British
state, it's subject to the same

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law as London.

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-It has been said by an English
jurist that it's the right

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of every Englishman
to so arrange his affairs

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that the tax department doesn't
put the largest possible

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shovel into his storage.
I agree with that, and

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in Calgary, I was fortunate
enough that the income tax

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I was paying exceeded 50%, I was
working very hard, long hours,

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I wasn't seeing my family,
and I just essentially refused

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to pay more than half
of my income to government

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and so I started looking
for someplace else.

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There's nothing to my mind
improper, immoral or anything

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else about establishing a tax
haven. I don't feel any

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remorse about not paying taxes.
I think it's a marvellous

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way of life.

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-The Bahamas started life
as a UK OFC, but it became

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independent in the 1970's.
Bermuda is still an overseas

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territory, the Cayman Islands,
the British Virgin Islands,

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Jersey, the Isle
of Man, Guernsey.

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-So you had this kind
of two stage replacement

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for the Empire, the city was
suddenly reinvigorated and

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started growing very fast again.
And all these countries

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that are decolonized as well as
many others, because they still

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looked to the mother country
for sort of the rule of law

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and you know, financial trading.
The money started coming

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back through the system, through
the city, through the Euro

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markets and through the tax
havens and that mixed up

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with money from presidents and
their families and their

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cronies looting their countries
and all that money washed

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into the system and all
the players in the system very

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quickly realized that you know,
the more questions we ask

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about the origin of this money,
the less money we're going

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to get. So very quickly
this mentality developed.

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This "ask no questions"
mentality, we're just

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like the money.

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-And what that means is that
money effectively crosses

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the border in one direction
only. It leaves the country

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that issued it, the country that
guarantees it and it enters

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this global financial space,
the space of money. It isn't

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a real space, you can't visit
it, we can't get on a bus

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and go there, but your money
can. And your money can travel

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the world through these markets
without landing anywhere.

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And it can do so in perpetuity,
should you so wish.

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And so the space of money is
quite hard to conceive

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of a space of money. Imagine
it would be like cloud

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computing. We call it the cloud,
because we think of it

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as hovering above us and
carrying all our data

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in a way that's quite
comfortable, we kind of like

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the idea of the cloud.
Offshore finance created

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cloud money long before
we had cloud computing.

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Offshore is about leaving legal
space and so for that reason,

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offshore resides on the other
side of the map as it were,

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you penetrate through the map
into this rather undefined

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domain that we call offshore,
we use it's familiar

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topographical language as though
it was simply somewhere else

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on the surface of the earth. But
of course, it's somewhere else

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legally, somewhere
else fiscally.

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-When Hurricane Ivan hit
the Cayman Islands, I think

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the most noticeable thing
that happened was that a few

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light aircrafts lefts the
islands beforehand with computer

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hard drives on them.

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-So effectively, Cayman Islands
can be destroyed by a hurricane,

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in fact, Cayman Islands can
be submerged under the sea,

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and can remain the forth largest
financial centre in the world.

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-There are 1.6 trillion dollars
booked to Cayman Islands banks.

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Almost none of that is actually
in Cayman or invested in Cayman

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or in a chest on the beach.
That money flows mostly

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between banks or between major
corporations and is reinvested

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somewhere else.

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-Nothing real is really
happening in these places.

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You don't get very much real
management of, you know,

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hedge funds. The real people
who are doing real stuff are

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in New York or London
or Paris or wherever.

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-And the famous joke
in London goes as follows:

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'Those who know don't
talk about these things.

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Those who talk, don't know'.

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I got a job working for what is
now Deloitte Touche in their

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offshore operations and the next
step was one day in my office,

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the phone went and there was
a company acting on behalf

233
00:23:39,986 --> 00:23:43,590
of the government of Jersey.
They said: You're an economist,

234
00:23:43,656 --> 00:23:45,992
and the government wants
an economic adviser. Are you

235
00:23:46,058 --> 00:23:51,430
interested in applying for
the job?' And there I was,

236
00:23:51,498 --> 00:23:58,605
an insider in a very prominent
European tax haven.

237
00:23:58,671 --> 00:24:00,607
Which meant that I have a very,
very good position to start

238
00:24:00,673 --> 00:24:04,777
finding out what the UK's
position was on its Crown

239
00:24:04,844 --> 00:24:09,448
dependencies. The British
government connived at every

240
00:24:09,516 --> 00:24:14,453
single step in supporting
its offshore tax havens like

241
00:24:14,521 --> 00:24:17,790
Jersey and the Cayman Islands
and so on. Far from wanting

242
00:24:17,857 --> 00:24:21,293
to take action. And they were
under pressure from the European

243
00:24:21,360 --> 00:24:24,964
Union or from the United States.
They would talk the talk

244
00:24:25,031 --> 00:24:29,301
about 'yeah, we do what we can'.
But they never really took any

245
00:24:29,368 --> 00:24:31,003
effective action.

246
00:24:31,070 --> 00:24:35,307
-So it allowed the enormous
growth of financial capital

247
00:24:35,374 --> 00:24:40,647
and that in the end had
the result of you know,

248
00:24:40,713 --> 00:24:42,649
you had the Americans
for example saying all

249
00:24:42,715 --> 00:24:44,817
this activity is happening
in London, there's nothing

250
00:24:44,884 --> 00:24:48,320
we can really do to stop it.
What do we do now? We're being

251
00:24:48,387 --> 00:24:50,823
undermined here, do we,
you know, if we can't beat them,

252
00:24:50,890 --> 00:24:53,660
maybe we should join them.

253
00:24:53,726 --> 00:24:55,828
Politicians felt they had
to somehow compete with

254
00:24:55,895 --> 00:25:08,340
this unregulated market by
relaxing their own regulations.

255
00:25:08,407 --> 00:25:11,678
-Politicians began to change
the discourse, the language.

256
00:25:11,744 --> 00:25:15,682
It was no longer about spiritual
growth, education and so on

257
00:25:15,748 --> 00:25:17,850
and so forth, being part
of the group, but it's about

258
00:25:17,917 --> 00:25:22,021
providing economic growth.
The role of the state became

259
00:25:22,088 --> 00:25:26,859
to become more competitive
with the world markets.

260
00:25:26,926 --> 00:25:33,032
It became the competition state.

261
00:25:33,099 --> 00:25:38,537
And so, states had to respond
by compromising with

262
00:25:38,605 --> 00:25:41,040
the corporation basically
providing them sweeteners,

263
00:25:41,107 --> 00:25:45,544
subsidies, lower taxation,
but at the same time providing

264
00:25:45,612 --> 00:25:48,715
them with highly educated
workforce with political

265
00:25:48,781 --> 00:26:16,042
stability.

266
00:26:16,108 --> 00:26:18,077
-I think the problem is
that many politicians have

267
00:26:18,144 --> 00:26:20,913
an illusion about how they
actually run their country.

268
00:26:20,980 --> 00:26:24,751
When actually they run their
country within the confines

269
00:26:24,817 --> 00:26:27,754
of what the global financial
system places on them.

270
00:26:27,820 --> 00:26:30,422
So if you want to take
action on the UK economy,

271
00:26:30,489 --> 00:26:33,760
if M Carney comes in and
he wants to spend a fortune

272
00:26:33,826 --> 00:26:36,929
of money, he'll find that
the international financiers

273
00:26:36,996 --> 00:26:39,431
will look at him and say:
'You're not'. Otherwise,

274
00:26:39,498 --> 00:27:07,126
you're going to sell all
of your government bonds.

275
00:27:07,193 --> 00:27:11,130
-For me, this so-called
competitive dynamic is

276
00:27:11,197 --> 00:27:14,133
perhaps the most important
reason why we have seen

277
00:27:14,200 --> 00:27:19,806
the dismantling of the welfare
state. Cutting taxes on the most

278
00:27:19,872 --> 00:27:23,475
mobile forms of income, which
means raising taxes on less

279
00:27:23,542 --> 00:27:26,813
mobile forms of income, which
tends to represent workers

280
00:27:26,879 --> 00:27:30,482
and poorer people. And you know,
making it much harder

281
00:27:30,549 --> 00:27:34,653
for the welfare state to
function and one of the great

282
00:27:34,721 --> 00:27:37,990
reasons for the huge rise
in inequality that we've seen

283
00:27:38,057 --> 00:27:40,492
in the world today, particularly
at the very top of the income

284
00:27:40,559 --> 00:28:59,238
scale.

285
00:28:59,305 --> 00:29:02,508
-We must alter our course,
the taxing power of government

286
00:29:02,574 --> 00:29:05,744
must be used to provide revenues
for legitimate government

287
00:29:05,812 --> 00:29:09,248
purposes, it must not be
used to regulate the economy

288
00:29:09,315 --> 00:29:11,083
or bring about social change.

289
00:29:11,150 --> 00:29:16,755
(applause)

290
00:29:16,823 --> 00:29:19,926
-It begins to happen
in the 1980's. It's that

291
00:29:19,992 --> 00:29:23,930
transformation that comes with
the globalizing, the opening up

292
00:29:23,996 --> 00:29:28,100
the possibility of offshoring.
So that instead of having

293
00:29:28,167 --> 00:29:32,604
a protected economy that allowed
all the system to work

294
00:29:32,671 --> 00:29:36,943
in a certain direction. Now,
and ironically of course,

295
00:29:37,009 --> 00:29:40,779
partly because of the victories
of syndicalism in many

296
00:29:40,847 --> 00:29:43,782
of these countries and the
claims, the successful claims

297
00:29:43,850 --> 00:29:48,620
of modest middle class people in
bureaucracies who have health

298
00:29:48,687 --> 00:29:52,124
insurance, to have retirement
funds, to have housing

299
00:29:52,191 --> 00:29:56,128
subventions, to have public
transport, public education,

300
00:29:56,195 --> 00:30:01,633
a lot of public services.
Because that succeeded so well,

301
00:30:01,700 --> 00:30:06,305
I think the onslaught that
begins in the 1980's,

302
00:30:06,372 --> 00:30:10,977
on all those costs, as they were
called, is so brutal.

303
00:30:11,043 --> 00:30:13,980
The state collaborated, the
corporate actors worked hard

304
00:30:14,046 --> 00:30:20,652
at it. So it was an actively
made destruction of those

305
00:30:20,719 --> 00:30:25,657
circuits that the state had to
use to bring back to the mass

306
00:30:25,724 --> 00:30:29,962
of the people some benefits
from the taxes that they paid.

307
00:30:30,029 --> 00:30:34,333
-We can go back to the Thatcher
era in Britain. Government

308
00:30:34,400 --> 00:30:37,336
spending grew very rapidly
in the governments before

309
00:30:37,403 --> 00:30:40,839
Mrs Thatcher from World War II
and the British economy

310
00:30:40,907 --> 00:30:43,675
stagnated and was getting
a bit...Rich were getting

311
00:30:43,742 --> 00:30:47,679
poorer and poorer.

312
00:30:47,746 --> 00:30:50,349
Mrs Thatcher understood the
problem. The same thing happened

313
00:30:50,416 --> 00:30:53,019
here in America under Ronald
Reagan, a lot of other countries

314
00:30:53,085 --> 00:30:57,189
around the world. Things were
privatized, governments were

315
00:30:57,256 --> 00:31:17,043
cut back with great results.

316
00:31:17,109 --> 00:31:20,046
-Would you say that one of
the ways companies meet their

317
00:31:20,112 --> 00:31:22,881
obligations to society is
through payment of tax,

318
00:31:22,949 --> 00:31:25,884
yes or no?
-I think payment of tax

319
00:31:25,952 --> 00:31:29,721
is an important responsability
of businesses, yes.

320
00:31:29,788 --> 00:31:32,224
-Could you tell me how many
subsidiary companies your group

321
00:31:32,291 --> 00:31:36,062
uses and has incorporated
in the Isle of Man?

322
00:31:36,128 --> 00:31:38,897
-I don't have that number with
me. I'd be happy to look into

323
00:31:38,965 --> 00:31:40,899
it and...
-Well according to the return

324
00:31:40,967 --> 00:31:43,235
that your group company put
in last year, you have 30

325
00:31:43,302 --> 00:31:46,072
subsidiaries operating in that
jurisdiction. Can you tell me

326
00:31:46,138 --> 00:31:49,741
how many subsidiary companies
you have operating in Jersey?

327
00:31:49,808 --> 00:31:51,743
-I don't have that number
with me either.

328
00:31:51,810 --> 00:31:55,247
-The number is 38. Can you tell
me how many subsidiary companies

329
00:31:55,314 --> 00:31:57,416
of your group are incorporated
and operating in the Cayman

330
00:31:57,483 --> 00:31:59,751
Islands?
-The same answer.

331
00:31:59,818 --> 00:32:03,289
-You have 181. Now of course
all of these are well-known

332
00:32:03,355 --> 00:32:07,759
tax havens, which are used
by companies and a cursory

333
00:32:07,826 --> 00:32:11,263
reading of your group returns
shows that you have over

334
00:32:11,330 --> 00:32:14,433
300 such companies operating
in tax haven jurisdictions

335
00:32:14,500 --> 00:32:18,270
around the world. You will
understand M Diamond,

336
00:32:18,337 --> 00:32:20,772
that there is obviously, I mean
if you look at the facts

337
00:32:20,839 --> 00:32:23,275
I've just presented, that would
suggest that your bank is

338
00:32:23,342 --> 00:32:26,512
engaged on tax avoidance,
on a grand scale, would you not?

339
00:32:26,578 --> 00:32:30,949
-Well I don't know what you...
I think tax evasion is a very

340
00:32:31,017 --> 00:32:33,785
clear phrase and it's
a space we would never...

341
00:32:33,852 --> 00:32:35,454
-I know. And I didn't
use the word.

342
00:32:35,521 --> 00:32:38,457
-And I chose the word tax
efficiency which is our

343
00:32:38,524 --> 00:32:41,293
obligation. And it's something
that is in line with government

344
00:32:41,360 --> 00:32:42,961
policy.
-Your efficiency may be

345
00:32:43,029 --> 00:32:47,966
our avoidance.

346
00:32:48,034 --> 00:32:50,269
Those corporations have
brilliant lawyers, brilliant

347
00:32:50,336 --> 00:32:54,806
accountants why bother with
being illegal, like your average

348
00:32:54,873 --> 00:32:57,309
little household might be
illegally avoiding paying

349
00:32:57,376 --> 00:33:00,479
certain tax. Why bother with
illegality? You can navigate

350
00:33:00,546 --> 00:33:06,152
that regulatory fracture as I
call it, that space in between

351
00:33:06,218 --> 00:34:15,053
legal and illegal.

352
00:34:15,121 --> 00:34:19,225
-Here's the situation: you've
got an agreement which shifts

353
00:34:19,291 --> 00:34:25,063
the economic rights into
the most valuable thing

354
00:34:25,131 --> 00:34:30,202
you have to 3 Irish companies
that pay no taxes, you point

355
00:34:30,269 --> 00:34:36,074
out and accurately so, Mr Cook,
that 95% of the creativity

356
00:34:36,142 --> 00:34:40,078
that goes into those products is
in California. But two thirds

357
00:34:40,146 --> 00:34:43,582
of the profits are in Ireland
and you've made a decision

358
00:34:43,649 --> 00:34:48,920
which you have a right to do,
not to bring that money home.

359
00:34:48,987 --> 00:34:51,590
-Senator, we're proud that all
of our R and D or the vast

360
00:34:51,657 --> 00:34:53,259
majority of it is
in the United States.

361
00:34:53,325 --> 00:34:56,928
-I know, but about 70%
of the profits worldwide now

362
00:34:56,995 --> 00:35:01,400
end up with those three Irish
corporations. That's the facts.

363
00:35:01,467 --> 00:35:04,102
-The sort of headline that
Ireland has got this 12.5%

364
00:35:04,170 --> 00:35:07,439
tax rate, but that's not really
where the offshore action is.

365
00:35:07,506 --> 00:35:10,276
I mean that's significant for
sure, but what Ireland does

366
00:35:10,342 --> 00:35:15,614
is it allows multinationals,
it deems only a very small

367
00:35:15,681 --> 00:35:24,290
amount of the profits that
they make there to be taxable.

368
00:35:24,356 --> 00:35:27,293
The Double Irish is part
of the whole transfer pricing

369
00:35:27,359 --> 00:35:31,129
game. It is a way of, one
of the names given to one

370
00:35:31,197 --> 00:35:34,966
of the techniques for
disregarding large amounts

371
00:35:35,033 --> 00:35:44,009
of income and only taxing
small proportion of that.

372
00:35:44,075 --> 00:35:46,144
-That's my take on the Double
Irish here. I might do something

373
00:35:46,212 --> 00:35:51,049
like mix a Guinness
with a champagne.

374
00:35:51,116 --> 00:35:53,485
-Half shot of Baileys,
half shot of whiskey.

375
00:35:53,552 --> 00:35:58,324
This is possibly a drink
that may curdle, that's why

376
00:35:58,390 --> 00:36:03,128
you have to drink it fast.

377
00:36:03,195 --> 00:36:12,504
-A shot of Malibu followed
by a shot of Jameson...

378
00:36:12,571 --> 00:36:14,340
-There's your Double Irish.

379
00:36:14,406 --> 00:36:16,675
-A shot of Malibu, a shot of
Jameson, all the way down

380
00:36:16,742 --> 00:36:18,677
to the Caribbean and back to
Dublin. That's a Double Irish

381
00:36:18,744 --> 00:36:21,347
for you.
-So I taste it to see what it's

382
00:36:21,413 --> 00:36:32,023
like.

383
00:36:32,090 --> 00:36:36,362
Tastes like a gone-off Guinness.

384
00:36:36,428 --> 00:36:39,197
-So the likes of Microsoft,
Google and these other big

385
00:36:39,265 --> 00:36:41,700
companies, corporate companies,
I believe they do pay taxes.

386
00:36:41,767 --> 00:36:44,536
They pay taxes through their
employees. So their employees

387
00:36:44,603 --> 00:36:46,705
are paying taxes into
the country. And it's also

388
00:36:46,772 --> 00:36:50,376
on a positive note, it's keeping
people upbeat, it's keeping

389
00:36:50,442 --> 00:36:54,380
people in work and it's saving
a lot of people from being

390
00:36:54,446 --> 00:36:56,081
on the social welfare.

391
00:36:56,147 --> 00:36:58,550
-It's a double-edged sword,
like for the people that I know

392
00:36:58,617 --> 00:37:00,552
that work for them, they're
providing them with employment

393
00:37:00,619 --> 00:37:05,557
so it comes to whether you're
thinking of, you know,

394
00:37:05,624 --> 00:37:09,728
you and your little unit are
the greater consciousness

395
00:37:09,795 --> 00:37:15,401
of people out there. If
the option is be a part of it,

396
00:37:15,467 --> 00:37:21,239
and feed your kids and you know
pay your mortgage or you know,

397
00:37:21,307 --> 00:37:25,411
take the moral high ground.
I don't know too many people

398
00:37:25,477 --> 00:37:31,249
who can afford to take
the moral high ground.

399
00:37:31,317 --> 00:37:34,252
-I think the corporations come
into Ireland to avoid paying

400
00:37:34,320 --> 00:37:39,090
massive taxes just kind of
a showcase of how short-sighted

401
00:37:39,157 --> 00:37:44,530
government is here.

402
00:37:44,596 --> 00:37:47,599
Everything has been just like
make money now, don't think

403
00:37:47,666 --> 00:37:49,601
about the future. And that's
been the scenario even through

404
00:37:49,668 --> 00:37:52,771
the Celtic Tiger in Ireland when
it was doing really well,

405
00:37:52,838 --> 00:37:56,274
people didn't invest money in
services. I mean you look at

406
00:37:56,342 --> 00:37:58,276
the state of the roads here,
the most basic thing and there's

407
00:37:58,344 --> 00:38:01,347
potholes everywhere and you can
just tell that there's been

408
00:38:01,413 --> 00:38:03,449
so much corruption with how
the money's being spent and

409
00:38:03,515 --> 00:38:05,651
people pay really high taxes
here. Personally, like

410
00:38:05,717 --> 00:38:09,120
property taxes are introducing
water tax, all these new taxes,

411
00:38:09,187 --> 00:38:10,789
personal taxes.

412
00:38:10,856 --> 00:38:12,624
-You can probably see why
maybe the bigger companies are

413
00:38:12,691 --> 00:38:16,127
coming to this country because
the tax for them isn't as high,

414
00:38:16,194 --> 00:38:19,130
so our multi million dollar
companies that are making

415
00:38:19,197 --> 00:38:22,468
millions aren't getting taxed as
much whereas the kind of people

416
00:38:22,534 --> 00:38:24,470
that have the lower income
or the average income are just,

417
00:38:24,536 --> 00:38:26,472
taxes have gone
through the roof.

418
00:38:26,538 --> 00:38:29,307
-These companies as soon
as a tax is introduced,

419
00:38:29,375 --> 00:38:31,477
like they're not committed
to Ireland, they'll be gone.

420
00:38:31,543 --> 00:38:34,145
And the politicians know that
and they're playing that gamble

421
00:38:34,212 --> 00:38:37,649
but it's really destroying
the economy here I think.

422
00:38:37,716 --> 00:38:40,486
And it's setting a really
bad example to people that

423
00:38:40,552 --> 00:38:43,489
you know, oh if you provide
jobs, you can just get away

424
00:38:43,555 --> 00:38:47,826
with whatever you want. So...

425
00:38:47,893 --> 00:38:51,329
-Many studies have shown
that when countries offer

426
00:38:51,397 --> 00:38:56,835
tax competition as a way
to attract jobs, companies will

427
00:38:56,902 --> 00:39:00,171
take advantage of the subsidies
that the countries provide.

428
00:39:00,238 --> 00:39:03,341
And when another country offers
a different subsidy, they will

429
00:39:03,409 --> 00:39:14,386
pack up and move
to those countries.

430
00:39:14,453 --> 00:39:17,523
The real jobs that this tax
competition creates in my view,

431
00:39:17,589 --> 00:39:27,365
are jobs for tax lawyers
and tax accountants.

432
00:39:27,433 --> 00:39:30,201
When multinational companies
have subsidiaries in many

433
00:39:30,268 --> 00:39:34,205
different countries in all
the world, as you know, anything

434
00:39:34,272 --> 00:39:43,248
that can be priced can
also be mispriced.

435
00:39:43,314 --> 00:39:45,884
But let's take agriculture
as an example. Let's say

436
00:39:45,951 --> 00:39:50,889
bananas. Now many of the
plantations in Guatemala are

437
00:39:50,956 --> 00:39:55,393
owned by the big fruit companies
in the world, Del Monte

438
00:39:55,461 --> 00:39:59,397
and Chiquita, they have
plantations in Guatemala,

439
00:39:59,465 --> 00:40:03,735
it's sold at a very low price to
a company in the Cayman Islands.

440
00:40:03,802 --> 00:40:08,239
So what happens is the plant is
grown, the fruit is grown

441
00:40:08,306 --> 00:40:11,276
in Guatemala, the revenue
that the government of Guatemala

442
00:40:11,342 --> 00:40:16,247
collects is minimal. The actual
profit sits when the fruit is

443
00:40:16,314 --> 00:40:19,918
sold to Cayman Islands
from where it is resold

444
00:40:19,985 --> 00:40:32,263
to Europe and the United States.

445
00:40:32,330 --> 00:40:34,600
In the course of our study
in Guatemala, we found that

446
00:40:34,666 --> 00:40:38,937
as a result of this trade
mispricing, Guatemala was losing

447
00:40:39,004 --> 00:40:44,610
about 500 million dollars a year
through this underpricing

448
00:40:44,676 --> 00:40:48,614
of a exports and over pricing
of imports, 500 million dollars

449
00:40:48,680 --> 00:40:53,451
a year in a country that is
still poor. And as we got into

450
00:40:53,519 --> 00:40:56,287
more studies in this area,
we calculated that developing

451
00:40:56,354 --> 00:40:59,625
countries as a whole were losing
about 200 billion dollars

452
00:40:59,691 --> 00:41:12,303
a year.

453
00:41:12,370 --> 00:41:14,806
You know the comment that was
made by Joseph Andrews

454
00:41:14,873 --> 00:41:19,344
who is the head of the transfer
pricing of the OECD, he made

455
00:41:19,410 --> 00:41:21,980
a very interesting, very
revealing comment in February

456
00:41:22,047 --> 00:41:25,817
when he said that there's
something wrong with the global

457
00:41:25,884 --> 00:41:30,455
trading system if 75% of
the profits of multinational

458
00:41:30,522 --> 00:41:36,327
companies are deemed to be
earned in 4 tax haven

459
00:41:36,394 --> 00:41:43,001
countries: Switzerland,
Singapore, Bermuda

460
00:41:43,068 --> 00:41:51,677
and Cayman Islands.

461
00:41:51,743 --> 00:41:58,850
-Now Amazon... I buy a book from
you, I do it actually online.

462
00:41:58,917 --> 00:42:02,020
I'm a regular buyer and when
I buy a book, what I do is

463
00:42:02,087 --> 00:42:10,696
I get Amzon.co.uk. That's what
I'm told. Is that correct?

464
00:42:10,762 --> 00:42:15,033
I mean I can show you plenty...
In fact I think you write to me

465
00:42:15,100 --> 00:42:19,104
everyday with new offers.
(laughs)

466
00:42:19,170 --> 00:42:22,373
But it's a UK company
that I'm buying from?

467
00:42:22,440 --> 00:42:25,711
-No you're purchasing from
a single European company.

468
00:42:25,777 --> 00:42:29,047
We operate a single European...
-I'm buying...It says to me,

469
00:42:29,114 --> 00:42:34,720
I'll show it to you, it says
Amazon.co.uk. Is that actually

470
00:42:34,786 --> 00:42:38,757
to lie to me about
the origins of your company?

471
00:42:38,824 --> 00:42:42,393
-Now we're running a single
European business.

472
00:42:42,460 --> 00:42:46,531
-That comes with a UK. I believe
I'm dealing with a UK company.

473
00:42:46,598 --> 00:42:50,568
When did any book that I ever
purchased ever get

474
00:42:50,636 --> 00:42:52,738
to Luxemburg?

475
00:42:52,804 --> 00:42:55,406
-So we do not have a...

476
00:42:55,473 --> 00:42:57,075
-Have you got folks
in Luxemburg?

477
00:42:57,142 --> 00:42:59,077
-We do not have a performance
center in Luxemburg.

478
00:42:59,144 --> 00:43:02,413
We have a European
headquarters in Luxemburg.

479
00:43:02,480 --> 00:43:04,549
-When Chair buys her book,
the money comes to Luxemburg

480
00:43:04,616 --> 00:43:08,586
and you just essentially pay
a small amount back to the UK

481
00:43:08,654 --> 00:43:10,421
to have it delivered.
Is that so?

482
00:43:10,488 --> 00:43:13,424
-Service such as operating
the fulfilment centers,

483
00:43:13,491 --> 00:43:17,595
which is going to be receiving
inventory, picking, packing,

484
00:43:17,663 --> 00:43:20,098
and then passing
on those products.

485
00:43:20,165 --> 00:43:25,103
-How much of your Luxemburg
business is sales into the UK?

486
00:43:25,170 --> 00:43:30,776
-Fortunately, we've never broken
out figures, revenue figures,

487
00:43:30,842 --> 00:43:32,778
on a country website basis.

488
00:43:32,844 --> 00:43:34,780
-You've got to be joking.
-I, I give...

489
00:43:34,846 --> 00:43:36,614
-You can't be serious.

490
00:43:36,682 --> 00:43:39,450
-We operate a pan-European
business. Those are the only,

491
00:43:39,517 --> 00:43:41,787
only figures we have ever
broken out with...

492
00:43:41,853 --> 00:43:43,955
-I used to be a finance director
of a pan-European business

493
00:43:44,022 --> 00:43:46,958
and if somebody told me what,
or asked me, what do you sell

494
00:43:47,025 --> 00:43:49,795
in each country? I'd be fired
immediately if I didn't have

495
00:43:49,861 --> 00:43:52,731
the answer to that question.
That's ridiculous!

496
00:43:52,798 --> 00:43:56,968
-The numbers that we've
never disclosed publicly.

497
00:43:57,035 --> 00:43:58,970
-Will you disclose
them privately?

498
00:43:59,037 --> 00:44:01,472
-I am very happy, should
the committee wish,

499
00:44:01,539 --> 00:44:04,142
to come back and see whether
it's possible to disclose

500
00:44:04,209 --> 00:47:36,087
them privately to the committee.

501
00:47:36,154 --> 00:47:37,855
-Like any company, we're
required to do two things:

502
00:47:37,923 --> 00:47:40,858
one, to play by the rules and
when you set up internationally

503
00:47:40,926 --> 00:47:42,693
you need to make decisions
about how to protect your

504
00:47:42,760 --> 00:47:45,363
international property and how
to organize. And secondly,

505
00:47:45,430 --> 00:47:48,199
to manage our cost efficiently
in order to satisfy our

506
00:47:48,266 --> 00:47:50,201
shareholders and our goal
as a company is to...

507
00:47:50,268 --> 00:47:51,903
-So you're minimizing your
tax even though it's unfair

508
00:47:51,970 --> 00:47:54,005
to British taxpayers?

509
00:47:54,072 --> 00:47:55,706
-It's not unfair to British
taxpayers. We pay all the tax

510
00:47:55,773 --> 00:47:59,277
you require us to pay in the UK.
We paid 6 million of tax last...

511
00:47:59,344 --> 00:48:01,379
-Yeah, maybe. But we're not
accusing you of being illegal,

512
00:48:01,446 --> 00:48:05,050
we are accusing you
of being immoral.

513
00:48:05,116 --> 00:48:08,053
-The fair share argument I think
is a really, really difficult

514
00:48:08,119 --> 00:48:11,056
one to run particularly
for someone from a legal

515
00:48:11,122 --> 00:48:14,392
background and it's sort of the
buzzword. Apple isn't paying

516
00:48:14,459 --> 00:48:17,228
its fair share, or Starbucks
isn't paying its fair share.

517
00:48:17,295 --> 00:48:23,234
And OFC's are not the villains
in that debate. The debate is

518
00:48:23,301 --> 00:48:28,073
if you think the domestic US tax
structure is wrong, and that

519
00:48:28,139 --> 00:48:32,077
Apple should be paying US tax
on the 150 billion it has

520
00:48:32,143 --> 00:49:03,708
outside the US, change domestic
US tax laws to have that happen.

521
00:49:03,774 --> 00:49:06,944
-Unless we deal with the global
as such, we're not going

522
00:49:07,012 --> 00:49:12,117
to really address this problem
anywhere nearly as effectively

523
00:49:12,183 --> 00:49:15,453
as we need to and all the
players in this industry are

524
00:49:15,520 --> 00:49:18,956
basically organized across
boarders. If you look at Apple,

525
00:49:19,024 --> 00:49:22,460
and Google and Microsoft and
Facebook and big pharmaceutical

526
00:49:22,527 --> 00:49:26,464
companies, the multinationals,
the grain companies that are

527
00:49:26,531 --> 00:49:31,802
using their tax lawyers
and their accounting firms,

528
00:49:31,869 --> 00:49:37,308
to park assets and low tax
jurisdictions. You know they're

529
00:49:37,375 --> 00:49:40,145
playing this game across
boarders. I think we have

530
00:49:40,211 --> 00:49:42,813
to organize effectively around
these global industries

531
00:49:42,880 --> 00:50:30,027
the same way.

532
00:50:30,095 --> 00:50:32,863
-The offshore world is full
of vibrant, intelligent

533
00:50:32,930 --> 00:50:37,202
and creative people. They are
used to adapting to thrive

534
00:50:37,268 --> 00:50:45,042
and survive. And they will
continue to do that.

535
00:50:45,110 --> 00:50:49,880
There is no doom or gloom
Conversely, everybody I've met

536
00:50:49,947 --> 00:50:53,050
appears to be optimistic.

537
00:50:53,118 --> 00:50:58,223
-If we are now talking about
tax avoidance being bad,

538
00:50:58,289 --> 00:51:03,161
that is a significant shift
in the nature of the playing

539
00:51:03,228 --> 00:51:10,235
field.

540
00:51:10,301 --> 00:51:14,905
The particularly active players
are of course the OECD in terms

541
00:51:14,972 --> 00:51:20,245
of the tax field and the current
head of the tax division who's

542
00:51:20,311 --> 00:51:24,915
a Frenchman, needless to say,
called Pascal Saint-Amans,

543
00:51:24,982 --> 00:51:27,918
who by the way doesn't pay
any tax on his OECD salary.

544
00:51:27,985 --> 00:51:30,921
But people get tired
of me saying that. He gave

545
00:51:30,988 --> 00:51:34,525
a fascinating speech at
the site, Oxford University

546
00:51:34,592 --> 00:51:38,929
business School in the middle
of April, in wonderful Gallic

547
00:51:38,996 --> 00:51:41,599
fashion, he had three, three
days of beard and it was

548
00:51:41,666 --> 00:52:09,694
wonderful, a silver fox.

549
00:52:09,760 --> 00:52:12,463
-And he basically said: yeah,
we recognize this is

550
00:52:12,530 --> 00:52:16,634
an opportunity for the OECD
to take back control of global

551
00:52:16,701 --> 00:52:37,655
tax policy.

552
00:52:37,722 --> 00:52:40,491
-And in today's commercial
world, the way that's

553
00:52:40,558 --> 00:52:45,496
accomplished is by creating
intellectual property, this is

554
00:52:45,563 --> 00:52:49,667
patents and copyrights and the
like, and then placing those

555
00:52:49,734 --> 00:52:54,339
pieces of intellectual property
in the offshore world and

556
00:52:54,405 --> 00:52:58,008
then billing the onshore
companies for the use

557
00:52:58,075 --> 00:53:05,450
of what has been patented
or copyrighted.

558
00:53:05,516 --> 00:53:09,687
So for example, the name
Starbucks might be a copyrighted

559
00:53:09,754 --> 00:53:14,359
and a trademarked and now,
the trademark is sold to some

560
00:53:14,425 --> 00:53:18,363
offshore shell company, and
everywhere in the world, there's

561
00:53:18,429 --> 00:53:21,366
a Starbucks, they'll pay
for the use of the name.

562
00:53:21,432 --> 00:53:38,048
But that moves the profit to
a place where there's no tax.

563
00:53:38,115 --> 00:53:40,718
-Are we helping developed
nations or are we helping

564
00:53:40,785 --> 00:53:46,724
emerging nations and attempting
to reduce or alleviate

565
00:53:46,791 --> 00:53:50,395
poverty? Or are we actually
maintaining financial

566
00:53:50,461 --> 00:53:56,066
imperialism? And I'm afraid,
I tend to the former,

567
00:53:56,133 --> 00:54:02,072
not the latter.

568
00:54:02,139 --> 00:54:04,409
-Within the OECD membership,
there are going to be some

569
00:54:04,475 --> 00:54:06,744
countries that will do
everything possible

570
00:54:06,811 --> 00:54:11,582
to prevent them moving forward
to what should be the logical

571
00:54:11,649 --> 00:54:14,752
outcome, which is to move
towards taxing companies,

572
00:54:14,819 --> 00:54:17,755
not on the basis of the legal
fictions they create

573
00:54:17,822 --> 00:54:20,491
in the Cayman Islands and
the Channel Islands, but

574
00:54:20,558 --> 00:54:24,261
on the basis of where their
genuine economic activity

575
00:54:24,329 --> 00:54:29,099
takes place.

576
00:54:29,166 --> 00:54:32,102
-Do you tax corporations
as if they were a collection

577
00:54:32,169 --> 00:54:35,606
of separate entities and loosely
interacting with each other?

578
00:54:35,673 --> 00:54:38,108
And you know, when they put
those entities in different

579
00:54:38,175 --> 00:54:41,446
tax havens and jurisdictions
around the world, do you accept

580
00:54:41,512 --> 00:54:45,282
those, the legal form of
the corporation as the basis

581
00:54:45,350 --> 00:54:49,620
for taxing them. Or do you
take a completely different

582
00:54:49,687 --> 00:54:52,289
philosophical view of what
multinational corporation is

583
00:54:52,357 --> 00:54:55,460
and treated as a single global
unit and then you decide where

584
00:54:55,526 --> 00:54:59,129
it's doing business, where its
real businesses is, its sales,

585
00:54:59,196 --> 00:55:02,800
its payroll and so on. Where is
the real business of that

586
00:55:02,867 --> 00:55:05,636
corporation and then you
allocate its global profits

587
00:55:05,703 --> 00:55:08,473
to each jurisdiction you divide
it up to each jurisdiction,

588
00:55:08,539 --> 00:55:11,308
according to the real economic
substance of what they're doing.

589
00:55:11,376 --> 00:55:13,478
If you do it that way, then
you can completely ignore

590
00:55:13,544 --> 00:55:15,480
what the tax havens are doing.
They can do whatever they like

591
00:55:15,546 --> 00:55:18,483
in tax havens, but if there's
no real economic activity,

592
00:55:18,549 --> 00:55:21,819
they will get allocated a tiny
proportion of the global income.

593
00:55:21,886 --> 00:55:24,355
It doesn't matter
if they tax that at 0%.

594
00:55:24,422 --> 00:55:26,156
-What's different about Google
versus the other businesses

595
00:55:26,223 --> 00:55:27,825
you've been talking about were
not selling books,

596
00:55:27,892 --> 00:55:30,495
and were not making coffee...
-Just setting out the choices.

597
00:55:30,561 --> 00:55:32,663
-Well the services we provide
to consumers are based

598
00:55:32,730 --> 00:55:34,732
on the computer science.
That is what creates

599
00:55:34,799 --> 00:57:00,317
the economic value for people.
-What does Bermuda create?

600
00:57:00,384 --> 00:57:02,252
-What's happening with the
internet, the basic internet

601
00:57:02,319 --> 00:57:04,922
was like that, but what's
happens with it recently,

602
00:57:04,989 --> 00:57:08,292
with the event of
the advertising business model

603
00:57:08,358 --> 00:57:10,928
and cloud computing and the way
that everybody gives their data

604
00:57:10,995 --> 00:57:16,601
over to remote companies,
it's as if you got your truck

605
00:57:16,667 --> 00:57:19,604
on the freeway and then
the freeway supplied people

606
00:57:19,670 --> 00:57:22,607
who would recommend the route
and would decide which trucks

607
00:57:22,673 --> 00:57:27,778
stop you would be aware of.

608
00:57:27,845 --> 00:57:31,782
The highway system is generous.
Obviously we pay for it

609
00:57:31,849 --> 00:57:34,451
with our taxes, but once we use
it, it doesn't try to manipulate

610
00:57:34,519 --> 00:57:37,955
us. The internet has been very
different. The internet has

611
00:57:38,022 --> 00:57:41,626
asked us to give all of our
information to it in order

612
00:57:41,692 --> 00:57:45,462
to do anything and this is
a terrible idea because

613
00:57:45,530 --> 00:57:55,305
the information is the power.

614
00:57:55,372 --> 00:57:57,675
So people have to understand
when they get these sort

615
00:57:57,742 --> 00:57:59,476
of free services like free
searcher, free social

616
00:57:59,544 --> 00:58:01,979
networking, what they are
really doing is giving over

617
00:58:02,046 --> 00:58:05,315
the true value which is the data
about themselves and their

618
00:58:05,382 --> 00:58:07,985
friends that can be used
to drive these behavioural

619
00:58:08,052 --> 00:58:10,487
models that then can be used
to concentrate fortunes.

620
00:58:10,555 --> 00:58:12,990
They're giving away the stuff
that's really valuable

621
00:58:13,057 --> 00:58:16,493
and what they're getting is
trinkets. They're putting

622
00:58:16,561 --> 00:58:19,830
themselves in the position
of lesser citizens who can't

623
00:58:19,897 --> 00:58:22,499
really bargain, can't really
have first class status

624
00:58:22,567 --> 00:59:17,888
in the economy anymore.

625
00:59:17,955 --> 00:59:21,391
-I'm a satisfied customer.
And I love the service

626
00:59:21,458 --> 00:59:25,062
you provide. And when you write
to me and say, having bought

627
00:59:25,129 --> 00:59:28,733
this biography of John Major,
you may be interested also

628
00:59:28,799 --> 00:59:31,001
in Fifty Shades of Grey.

629
00:59:31,068 --> 00:59:36,573
(laughs)

630
00:59:36,641 --> 00:59:44,081
But like the Chair, I'm
interested in why you pay

631
00:59:44,148 --> 00:59:48,452
so little tax, corporation tax
particularly, in this country,

632
00:59:48,518 --> 00:59:51,789
so that we can pay some kind of
benefit to all the booksellers

633
00:59:51,856 --> 00:59:54,925
you've put out of business,
because undoubtedly, you've put

634
00:59:54,992 --> 00:59:58,428
a large number of booksellers
some of them local, in my case,

635
00:59:58,495 --> 01:00:02,432
out of business. And I don't
get, frankly, from all

636
01:00:02,499 --> 01:00:07,104
this interview, why Luxemburg is
so lucky? I mean, the books are

637
01:00:07,171 --> 01:00:09,774
here, the warehouses are here,
the billing is here,

638
01:00:09,840 --> 01:00:12,843
the business is here,
the customers are here...

639
01:00:12,910 --> 01:00:16,613
-We've paid in excess
of 100 million in payroll

640
01:00:16,681 --> 01:00:20,951
taxes in the fast, last five
years. We've paid tens

641
01:00:21,018 --> 01:00:23,788
of millions in business rates,
in the past five years...

642
01:00:23,854 --> 01:00:26,791
-I've heard this argument, so
let me just kill this argument,

643
01:00:26,857 --> 01:00:29,126
because it really makes me
cross. On the one hand,

644
01:00:29,193 --> 01:00:32,462
so does every other business,
so the community-based

645
01:00:32,529 --> 01:00:36,967
bookshop that you're putting out
of business also pays business

646
01:00:37,034 --> 01:00:41,806
rates, also pays its PAYE, also
pays the, actually probably pays

647
01:00:41,872 --> 01:00:46,476
VAT in a way that you don't.
And you in the same way

648
01:00:46,543 --> 01:00:48,813
and you're making it
uncompetitive and the other

649
01:00:48,879 --> 01:00:51,982
thing is you depend on
the services that come out

650
01:00:52,049 --> 01:00:55,485
of the tax you pay. So you know,
you depend on the ability

651
01:00:55,552 --> 01:00:59,156
of your, of getting your goods
around so you've got to get

652
01:00:59,223 --> 01:01:01,491
the truck, you've got the roads
in place, you depend on all

653
01:01:01,558 --> 01:01:05,495
those things and probably worse
of all, both you and M. Alstead

654
01:01:05,562 --> 01:01:08,999
employ people on probably
minimum wage if we're lucky,

655
01:01:09,066 --> 01:01:12,169
and then we the taxpayers,
pick up the tax credit bill

656
01:01:12,236 --> 01:01:14,839
for that too. So we're putting
a lot of money back into

657
01:01:14,905 --> 01:01:18,008
the people you put, and you're
not putting enough tax

658
01:01:18,075 --> 01:01:20,845
into our economy. That's
what's riling us all.

659
01:01:20,911 --> 01:02:40,090
-I don't...

660
01:02:40,157 --> 01:02:42,592
-Buggy whips were huge
in Rochester, New York.

661
01:02:42,659 --> 01:02:46,096
And indeed when automobiles
took over the buggy whip

662
01:02:46,163 --> 01:02:50,267
manufacturers closed shop.
But what took over instead

663
01:02:50,334 --> 01:02:54,604
in Rochester was cameras, Kodak
and Polaroid were headquartered

664
01:02:54,671 --> 01:02:56,773
there and then there was
this whole new world. Now,

665
01:02:56,841 --> 01:03:01,611
Kodak had hundreds of thousands
of employees, really good solid

666
01:03:01,678 --> 01:03:07,317
middle class jobs. Kodak and
Polaroid both went bankrupt.

667
01:03:07,384 --> 01:03:12,289
The new world of photography is
Instagram which had 13 employees

668
01:03:12,356 --> 01:03:16,626
and sold for a billion dollars
to Facebook, Facebook is a giant

669
01:03:16,693 --> 01:03:19,964
public company controlled by one
person. So what we are seeing

670
01:03:20,030 --> 01:03:23,800
is the use of digital networks
to create intense, unbelievable

671
01:03:23,868 --> 01:03:27,972
and precedented concentrations
of wealth within the market

672
01:03:28,038 --> 01:03:30,640
system, which is no longer
the market system at all.

673
01:03:30,707 --> 01:03:32,977
It's something entirely
different. It's a feudal system

674
01:03:33,043 --> 01:03:37,314
and this is a great example
of it. Buggy whips, cameras,

675
01:03:37,381 --> 01:03:45,322
Instagram. Employees,
employees, no employees.

676
01:03:45,389 --> 01:03:48,325
We've created this engine
of almost guaranteed

677
01:03:48,392 --> 01:03:50,995
concentration of wealth
and power for whoever has

678
01:03:51,061 --> 01:03:53,663
the biggest computers, whoever
has the most central position

679
01:03:53,730 --> 01:04:08,678
on networks. It's not a playing
field, it's a funnel.

680
01:04:08,745 --> 01:04:10,847
-And I think that what is
happening is not simply

681
01:04:10,915 --> 01:04:17,021
more poverty, more inequality,
more lack of opportunity.

682
01:04:17,087 --> 01:04:21,358
No, we are dealing with
expulsions. At some point,

683
01:04:21,425 --> 01:04:25,195
more inequality is not simply
more inequality. We need,

684
01:04:25,262 --> 01:04:28,198
it needs another name.
People are being expelled

685
01:04:28,265 --> 01:05:55,119
from livelihoods.

686
01:05:55,185 --> 01:05:58,122
-Finance is basically a utility.
Finance does not manufacture

687
01:05:58,188 --> 01:05:59,789
anything you can touch or feel,
it doesn't market anything

688
01:05:59,856 --> 01:06:01,458
you can see. None of those are
its products. It's a utility

689
01:06:01,525 --> 01:06:11,368
that is supposed to serve
the rest of the economy.

690
01:06:11,435 --> 01:06:13,803
What we've done and certainly
what financial leaders want

691
01:06:13,870 --> 01:06:16,906
to do is almost turn that on
its head and make the economy

692
01:06:16,973 --> 01:06:24,181
be driven by finance.

693
01:06:24,248 --> 01:06:27,151
If the financial sector were
really providing value

694
01:06:27,217 --> 01:06:30,487
to the rest of the economy,
the financial sector may get

695
01:06:30,554 --> 01:06:34,158
wealthier, but the rest of
the economy should grow too.

696
01:06:34,224 --> 01:06:44,134
Their share of the pie
should be the same.

697
01:06:44,201 --> 01:06:47,337
But what's happened is their
share of the pie has doubled

698
01:06:47,404 --> 01:06:51,508
to levels that are just almost
unprecedented historically.

699
01:06:51,575 --> 01:06:54,178
One of the changes that
certainly occurred is that

700
01:06:54,244 --> 01:06:58,348
at the end of the Second World
War, the average time

701
01:06:58,415 --> 01:07:05,855
an investor held on to a share
of stock was measured in years.

702
01:07:05,922 --> 01:07:12,028
And what's happened is that
as technology has advanced,

703
01:07:12,096 --> 01:07:16,233
and practices have advanced,
the average time of holding

704
01:07:16,300 --> 01:07:21,205
on to shares of stock first fell
to an hour, than minutes.

705
01:07:21,271 --> 01:07:26,210
And more recently, it's been
measured as the average holding

706
01:07:26,276 --> 01:07:35,885
period is 22 seconds.

707
01:07:35,952 --> 01:07:37,387
Many of the holding periods
aren't measured in seconds

708
01:07:37,454 --> 01:07:40,390
at all. They're measured
in thousandths of a second,

709
01:07:40,457 --> 01:07:42,559
or millionths of a second
or a billionths of a second.

710
01:07:42,626 --> 01:07:48,898
And the turn is just like
completely instantaneous.

711
01:07:48,965 --> 01:07:56,406
That activity is activity
that has nothing to do with

712
01:07:56,473 --> 01:08:02,912
creating jobs for anybody
other than the people who work

713
01:08:02,979 --> 01:08:04,914
not too far from where
we're speaking right now

714
01:08:04,981 --> 01:08:06,583
on Wall Street.

715
01:08:06,650 --> 01:08:08,585
-We now have this extraordinary
phenomenon called

716
01:08:08,652 --> 01:08:17,394
high frequency trading.

717
01:08:17,461 --> 01:08:19,929
People who do high frequency
trading have to get their

718
01:08:19,996 --> 01:08:25,101
computers so close to
the computers of the Central

719
01:08:25,169 --> 01:08:29,173
Stock Exchange or whatever is
the exchange, that the fiber

720
01:08:29,239 --> 01:08:33,109
optics that they connect them
will be able to buy and sell

721
01:08:33,177 --> 01:08:35,945
something in way less than
a second, less than a tenth

722
01:08:36,012 --> 01:08:38,615
of a second. And of course
at that level, they can't

723
01:08:38,682 --> 01:08:42,952
possibly be making an informed
judgement about what

724
01:08:43,019 --> 01:08:46,956
that equity is worth. They are
simply switching on computers

725
01:08:47,023 --> 01:08:49,426
that have what are called
algorithms, rules of the game

726
01:08:49,493 --> 01:08:52,462
written to each other. And these
are computers just chasing each

727
01:08:52,529 --> 01:08:54,964
other round and round
in circles. Now, I think

728
01:08:55,031 --> 01:08:56,966
there's a debate as to whether
or not that does harm,

729
01:08:57,033 --> 01:08:59,969
but I think it's certainly
useless. I don't think there's

730
01:09:00,036 --> 01:09:05,074
any social value. This is not
making the allocation of capital

731
01:09:05,141 --> 01:09:08,312
more efficient. It's not
usefully determining whether

732
01:09:08,378 --> 01:09:13,149
the savers of a pension fund
give their money to this company

733
01:09:13,217 --> 01:09:18,154
or that company according to its
products or its entrepreneurial

734
01:09:18,222 --> 01:09:23,159
capabilities. That's the useful
activity, but we often go

735
01:09:23,227 --> 01:09:25,995
beyond that to levels of
activity which don't serve

736
01:09:26,062 --> 01:10:05,369
a useful purpose.

737
01:10:05,435 --> 01:10:10,206
-70% of financial trading
happens, and I'm quoting:

738
01:10:10,274 --> 01:10:14,210
'In black pools'. Now you might
think that black pools is

739
01:10:14,278 --> 01:10:16,713
a language of, you know,
those of us who do work on

740
01:10:16,780 --> 01:10:20,550
the informal economy,
on illegality, etc. No.

741
01:10:20,617 --> 01:10:23,720
That was Bernanke, the head
of the Federal Reserve Bank

742
01:10:23,787 --> 01:10:27,391
of the United States. That means
that the Federal Reserve is

743
01:10:27,457 --> 01:10:32,462
unable to really understand what
exactly is happening there.

744
01:10:32,529 --> 01:10:35,064
-What's really happening in
the dark pools is people are

745
01:10:35,131 --> 01:10:39,068
trying to escape detection
by some of these computers,

746
01:10:39,135 --> 01:10:42,506
these robots that are trying
to detect behaviour before

747
01:10:42,572 --> 01:10:56,252
it actually occurs.

748
01:10:56,320 --> 01:11:00,590
So, so many things get affected,
not just the securities markets

749
01:11:00,657 --> 01:11:04,528
but fuel prices for people
who heat their homes and fill

750
01:11:04,594 --> 01:11:08,598
their cars. Food prices
for people in developing

751
01:11:08,665 --> 01:11:12,436
countries. All of these things
get affected and that's

752
01:11:12,502 --> 01:12:40,356
really problematic.

753
01:12:40,424 --> 01:12:45,194
-Finance is supposed to spread
risk, manage risk, but instead

754
01:12:45,261 --> 01:12:48,698
finances become the great source
of risk. The financial sector

755
01:12:48,765 --> 01:12:52,536
has expanded boundlessly
both in its size and its

756
01:12:52,602 --> 01:12:55,705
profitability while at the same
time destroying the world's

757
01:12:55,772 --> 01:13:00,544
finances. I mean it's absolutely
absurd and yet we're all

758
01:13:00,610 --> 01:13:03,379
civilized, we're all nice
as we should be, we respect

759
01:13:03,447 --> 01:13:08,552
the system we've all agreed
to and we accept the benefits

760
01:13:08,618 --> 01:13:11,387
that have occurred to people
who have participated in

761
01:13:11,455 --> 01:13:15,559
schemes that are mathematically
absurd, just pure nonsense.

762
01:13:15,625 --> 01:13:19,228
But we cannot sustain it,
it's simply impossible.

763
01:13:19,295 --> 01:13:27,403
We cannot continue.

764
01:13:27,471 --> 01:13:30,239
-When we talk about Robin Hood
taxes of financial transaction

765
01:13:30,306 --> 01:13:33,409
taxes, we're talking about
imposing the tax on only one

766
01:13:33,477 --> 01:13:36,412
small part of what the finance
sector actually does.

767
01:13:36,480 --> 01:13:40,750
We're saying that trading, that
is trading assets back and forth

768
01:13:40,817 --> 01:13:44,420
should be taxed. If you are
an investor and buy some stocks

769
01:13:44,488 --> 01:13:47,423
today and hold them for 2 years,
5 years, 10 years, whatever,

770
01:13:47,491 --> 01:13:51,595
you would pay a small fee going
in and small fee going out.

771
01:13:51,661 --> 01:13:58,768
But that would be
trivial to you.

772
01:13:58,835 --> 01:14:04,373
-To tax every financial
transaction, that has a single

773
01:14:04,440 --> 01:14:10,947
nice simple aim, a bit of
redistribution. It doesn't kill

774
01:14:11,014 --> 01:14:14,283
the monster. But it does,
you must know, every time

775
01:14:14,350 --> 01:14:16,786
you do one of your monstrous
activities no matter how

776
01:14:16,853 --> 01:14:49,485
tiny, you redistribute a bit.

777
01:14:49,553 --> 01:14:52,989
Those transactions, because
of the tax, will have to pay

778
01:14:53,056 --> 01:14:57,827
the tax and so they won't be
as profitable. You'll cut back

779
01:14:57,894 --> 01:15:01,665
on those kinds of transactions,
so the financial transaction

780
01:15:01,731 --> 01:15:05,669
tax will actually reduce risk
in the economy and risk

781
01:15:05,735 --> 01:15:13,843
to the system to try
to avoid another crash.

782
01:15:13,910 --> 01:15:17,681
By the way, I'm really scared.
Another much bigger one

783
01:15:17,747 --> 01:15:35,865
that can't be stopped.

784
01:15:35,932 --> 01:15:38,702
-The officer, Captain
Herbie Johnson had his people

785
01:15:38,768 --> 01:15:41,871
up there and the fire got really
nasty really quick and

786
01:15:41,938 --> 01:15:44,708
there was a flashover. And
Herbie and one of his people

787
01:15:44,774 --> 01:15:50,046
were caught on the second floor
and Herbie suffered some

788
01:15:50,113 --> 01:15:59,723
pretty bad injuries and
he didn't make it, so...

789
01:15:59,789 --> 01:16:02,892
Shortly after that, we got
a visit on my shift from

790
01:16:02,959 --> 01:16:07,063
the mayor. And Mayor Emmanuel
came in. So he offered his

791
01:16:07,130 --> 01:16:10,900
condolences and he also said
that he had just come from

792
01:16:10,967 --> 01:16:14,070
speaking to Herbie Johnson's
family again and to see how

793
01:16:14,137 --> 01:16:16,072
they were doing. To check in
on them, see if they needed

794
01:16:16,139 --> 01:16:19,075
anything. And I'm thinking you
know, maybe it was the mayor's

795
01:16:19,142 --> 01:16:22,078
thing to do. For him to come
to us and do that, I thought

796
01:16:22,145 --> 01:16:24,914
it was a really classy gesture.
Then he goes with that same

797
01:16:24,981 --> 01:16:27,583
demeanour and says: 'now, I want
to talk about your pensions.'

798
01:16:27,651 --> 01:16:31,587
So right away, the alarm bells
are going off in my head,

799
01:16:31,655 --> 01:16:34,590
because he used to come, he was
coming around to the firehouses

800
01:16:34,658 --> 01:16:36,760
before he got elected, when
he was campaigning, talking

801
01:16:36,826 --> 01:16:40,596
about the same issue. And what
he would tell us is there's

802
01:16:40,664 --> 01:16:44,433
no easy choices, your pension
is badly underfunded.

803
01:16:44,500 --> 01:16:46,102
If you guys want to have
something going forward,

804
01:16:46,169 --> 01:16:47,771
we're going to have to make some
tough choices to make sure

805
01:16:47,837 --> 01:16:49,673
that you do.

806
01:16:49,739 --> 01:16:51,941
-If we don't take care
of the inherited past,

807
01:16:52,008 --> 01:16:55,945
be honest with our employees,
be honest with our taxpayers,

808
01:16:56,012 --> 01:16:57,947
we're going to be stealing from
our future and that's just

809
01:16:58,014 --> 01:16:59,983
the wrong course to do.

810
01:17:00,049 --> 01:17:04,553
-So I don't know what possessed
me, I guess I'm sometimes

811
01:17:04,620 --> 01:17:06,956
a troublemaker once in a while.
So I sort of raised my hand

812
01:17:07,023 --> 01:17:10,626
and I said: 'You know, I've got
an idea, while our pension fund

813
01:17:10,694 --> 01:17:14,798
has been suffering, and people
have been losing their homes,

814
01:17:14,864 --> 01:17:18,968
we know there's one sector
of our economy that's doing

815
01:17:19,035 --> 01:17:22,638
pretty well. Because we bailed
them out, it's the banks,

816
01:17:22,706 --> 01:17:26,642
it's the investors. If we were
to institute a tiny financial

817
01:17:26,710 --> 01:17:30,479
transaction tax on the Board
of Trade, and the Mercantile

818
01:17:30,546 --> 01:17:34,984
Exchange, we could recoup some
of these losses and we'll be

819
01:17:35,051 --> 01:17:37,486
getting it back from the people
who squandered it in the first

820
01:17:37,553 --> 01:17:40,990
place. They won't notice it's
missing, it could just be

821
01:17:41,057 --> 01:17:43,159
a tiny tax and you could just
bring in tremendous amounts

822
01:17:43,226 --> 01:17:46,495
of revenue and solve some
of these budget crises.'

823
01:17:46,562 --> 01:17:49,999
And he said: 'I don't support
that. If you go down

824
01:17:50,066 --> 01:17:54,170
to Springfield, the state
capitol, you won't find any

825
01:17:54,237 --> 01:17:56,672
legislators who support that.
If you think it's a good idea,

826
01:17:56,740 --> 01:18:01,677
you should run for office.'

827
01:18:01,745 --> 01:18:06,182
The important thing I think were
the financial transaction tax

828
01:18:06,249 --> 01:18:09,518
to me is not just practical,
it's also symbolic.

829
01:18:09,585 --> 01:18:16,525
It's saying look, we are not
going to let you investors,

830
01:18:16,592 --> 01:18:19,863
bankers, do whatever you want
and cause all this damage

831
01:18:19,929 --> 01:18:23,867
to all these people who you see
as beneath you or not as

832
01:18:23,933 --> 01:18:27,036
important. If there's some value
in what you do, you'll do it

833
01:18:27,103 --> 01:18:30,039
with a smaller profit margin.
You'll do it and pay more

834
01:18:30,106 --> 01:18:33,042
taxes. And if there's no value
in what you do, you know what,

835
01:18:33,109 --> 01:18:36,045
we are going to make it illegal.
But until we figure that out,

836
01:18:36,112 --> 01:18:40,716
you're going to pay whatever
we decide you're going to pay

837
01:18:40,784 --> 01:18:43,887
to help recoup some of this loss
that you've created, to help

838
01:18:43,953 --> 01:18:46,555
repair some of this damage
that you've caused. But I think

839
01:18:46,622 --> 01:18:49,725
if we, but we have to change
our thinking though

840
01:18:49,793 --> 01:18:58,734
as a society in general.

841
01:18:58,802 --> 01:19:00,904
Do you want to put another coat
of paint on the bond trader's

842
01:19:00,970 --> 01:19:03,572
boat or do you want to make sure
your firefighter has a pension

843
01:19:03,639 --> 01:19:07,076
to go to when he retires? Take
your pick. It's an easy choice

844
01:19:07,143 --> 01:19:10,914
as far as I'm concerned.

845
01:19:10,980 --> 01:19:13,749
-The financial transaction tax
at a time where we're struggling

846
01:19:13,817 --> 01:19:17,286
to get our economies growing,
is quite simply madness.

847
01:19:17,353 --> 01:19:19,923
That is why Britain's been
arguing for a pro business

848
01:19:19,989 --> 01:19:25,594
agenda in Europe.

849
01:19:25,661 --> 01:19:31,100
-The Griffin, it's present as a
symbol of the city at the gates

850
01:19:31,167 --> 01:19:34,270
of the city so you can see it
all around the Square Mile.

851
01:19:34,337 --> 01:19:39,108
But it's more than simply a
symbol. It seems to in my mind

852
01:19:39,175 --> 01:19:44,613
express something of
the spirit of the city.

853
01:19:44,680 --> 01:19:51,955
And I experience that spirit as
demonic because it's the only

854
01:19:52,021 --> 01:19:56,125
way that I can understand
how the system works because

855
01:19:56,192 --> 01:19:59,128
individually the people
in the city are good people.

856
01:19:59,195 --> 01:20:10,639
They're not bad people.

857
01:20:10,706 --> 01:20:14,643
But there is within this system
something at work that causes

858
01:20:14,710 --> 01:20:20,149
us to exploit the world's
resources that is causing us

859
01:20:20,216 --> 01:20:25,989
to act against
our own interests.

860
01:20:26,055 --> 01:20:28,324
-Now of course it is right that
the financial sector should pay

861
01:20:28,391 --> 01:20:31,327
their share, but if you look
at the European commission's,

862
01:20:31,394 --> 01:20:34,998
own original analysis,
that showed that a financial

863
01:20:35,064 --> 01:20:39,168
transactions tax could cost
the GDP of the European Union

864
01:20:39,235 --> 01:20:43,839
and could reduce it
by 200 billion Euros.

865
01:20:43,907 --> 01:20:48,077
It could cost almost
500 000 jobs.

866
01:20:48,144 --> 01:20:52,181
-I could imagine that if
it produces some or less

867
01:20:52,248 --> 01:20:54,683
financial activity, there might
be at the end of the day

868
01:20:54,750 --> 01:20:57,020
somewhat less people employed in
the financial services industry

869
01:20:57,086 --> 01:20:59,855
across the world. But I'm
a sufficient believer

870
01:20:59,923 --> 01:21:02,691
in the dynamism of capitalism
that they find other jobs

871
01:21:02,758 --> 01:21:06,029
to do and actually think
that we are overproducing

872
01:21:06,095 --> 01:21:09,198
financial services and we'd
probably find better jobs

873
01:21:09,265 --> 01:21:14,703
for them to do.

874
01:21:14,770 --> 01:21:17,373
-I mean again it comes back
to the French attitude,

875
01:21:17,440 --> 01:21:20,876
if you charge people 75% rate
of income tax, aren't we going

876
01:21:20,944 --> 01:21:25,881
to have a lot more money? No.
Because people will stop paying

877
01:21:25,949 --> 01:21:28,884
it because they'll either move
away from it or they'll devise

878
01:21:28,952 --> 01:21:34,390
ways of avoiding it. And
of course it is only in the west

879
01:21:34,457 --> 01:21:37,393
so most of the trade will move
to Asia with no intention,

880
01:21:37,460 --> 01:21:40,796
I can tell you, of putting
on any form of transaction tax.

881
01:21:40,863 --> 01:21:43,732
-There's a couple of problems
with that. One, South Korea has

882
01:21:43,799 --> 01:21:45,901
a financial transaction tax.
Taiwan has a financial

883
01:21:45,969 --> 01:21:48,404
transaction tax. Singuapore has
a financial transaction tax,

884
01:21:48,471 --> 01:21:50,106
as do several
of the smaller markets.

885
01:21:50,173 --> 01:21:52,241
-Those who are against it,
who just don't like it,

886
01:21:52,308 --> 01:21:55,244
what they do is they try
to persuade enough countries

887
01:21:55,311 --> 01:21:57,746
to be against it that they can
than say, oh well there's

888
01:21:57,813 --> 01:22:00,083
no point in the rest having it
because it will move to those

889
01:22:00,149 --> 01:22:01,917
against it.

890
01:22:01,985 --> 01:22:04,753
-The City of London guards
its freedom to do exactly

891
01:22:04,820 --> 01:22:09,425
as it wants jealously. It's not
going to sign up to anything,

892
01:22:09,492 --> 01:22:14,263
that's going to impose a tax
however small on the vast

893
01:22:14,330 --> 01:22:17,933
volume of money that passes
through the city every day.

894
01:22:18,001 --> 01:22:22,438
It's not so much because
they would lose huge amounts

895
01:22:22,505 --> 01:22:25,108
of money, there's so much money
in the system. I doubt

896
01:22:25,174 --> 01:22:28,111
they would even notice it.
I think the resistance is

897
01:22:28,177 --> 01:22:32,781
more because it's smacks of
the beginning of the possibility

898
01:22:32,848 --> 01:22:39,288
of a global tax regime.

899
01:22:39,355 --> 01:22:44,293
-We're celebrating the spirit
of the Occupy movement and

900
01:22:44,360 --> 01:22:50,466
the nurses globally from 16
countries are bringing the same

901
01:22:50,533 --> 01:22:54,970
message to their governments
that we want to end austerity

902
01:22:55,038 --> 01:22:58,474
measures and pass
the Robin Hood tax.

903
01:22:58,541 --> 01:23:04,580
-Chanting: Banks got bailed out,
we got sold out!

904
01:23:04,647 --> 01:23:06,982
-People used to in their
positions use that money

905
01:23:07,050 --> 01:23:09,818
to invest. To invest in our
country, to invest in people

906
01:23:09,885 --> 01:23:12,155
and they're not doing it
anymore. We saw that with

907
01:23:12,221 --> 01:23:15,158
the banks, they're just hoarding
it. And as a nurse, I would

908
01:23:15,224 --> 01:23:17,493
say, they're probably a little
bit mentally ill. It's not

909
01:23:17,560 --> 01:23:19,995
normal to want to hoard all
that money, it's more than

910
01:23:20,063 --> 01:23:22,165
you could use in a lifetime.
And the people in this country

911
01:23:22,231 --> 01:23:24,333
need it. They are on
a planet with other people,

912
01:23:24,400 --> 01:23:26,835
they are in a country with other
people and that money needs

913
01:23:26,902 --> 01:23:29,838
to be put to good use. We pay
sales tax on everything

914
01:23:29,905 --> 01:23:33,008
we buy, we are used to doing it.
And if we have to pay sales

915
01:23:33,076 --> 01:23:36,179
tax on food and items
of clothing and the things

916
01:23:36,245 --> 01:23:38,347
that we use everyday,
they should be paying a sales

917
01:23:38,414 --> 01:23:41,184
tax too. And that's
what we're asking.

918
01:23:41,250 --> 01:23:45,020
-And this is revenue that would
come in each year from

919
01:23:45,088 --> 01:23:47,190
the private sector into
the public sector

920
01:23:47,256 --> 01:23:50,359
and the impact that it actually
will have on our economy is

921
01:23:50,426 --> 01:23:55,198
enormous. So that's one of
the reasons why people like

922
01:23:55,264 --> 01:23:58,534
Bill Gates, Warren Buffet,
George Soros, all of whom

923
01:23:58,601 --> 01:24:02,371
are certainly known you know,
left-wing liberal have all

924
01:24:02,438 --> 01:24:16,219
supported the Robin Hood tax.

925
01:24:16,285 --> 01:24:19,054
-I grew up in the segregated
South of the 1950's.

926
01:24:19,122 --> 01:24:21,224
And I saw the kinds
of inequalities there.

927
01:24:21,290 --> 01:24:24,393
And that angered me and now when
I look at what's happened,

928
01:24:24,460 --> 01:24:27,396
not just in the US, but in
a lot of wealthy countries,

929
01:24:27,463 --> 01:24:31,234
over the last 30 to 35 years
you see the huge shift

930
01:24:31,300 --> 01:24:35,238
of income upwards to mostly 1%
of the population in which

931
01:24:35,304 --> 01:24:38,073
by the way financial employees
are over represented in that

932
01:24:38,141 --> 01:24:41,910
1%. Very significantly, when
I see that, I think that level

933
01:24:41,977 --> 01:24:45,248
of inequality is not justified
but it also doesn't build

934
01:24:45,314 --> 01:24:47,583
the economy over the long run
for the rest of us.

935
01:24:47,650 --> 01:24:50,085
And so this is a tax that as
we'd lime to say in

936
01:24:50,153 --> 01:24:52,588
the Robin Hood Tax Movement,
is not a tax on the people,

937
01:24:52,655 --> 01:24:54,390
it's a tax for the people.

938
01:24:54,457 --> 01:24:56,592
-There's not a problem
with coming up with technical

939
01:24:56,659 --> 01:25:00,429
solutions to these problems
that we've identifies. It's

940
01:25:00,496 --> 01:25:03,432
a political problem, it's
an organizing problem.

941
01:25:03,499 --> 01:25:07,102
It's a problem with major,
parties have been captured

942
01:25:07,170 --> 01:25:11,106
by this global haven industry
and the multi national

943
01:25:11,174 --> 01:25:16,111
companies that... It represents
in the wealthy individuals

944
01:25:16,179 --> 01:25:19,448
that it represents. And
left to their own devices,

945
01:25:19,515 --> 01:25:24,119
those parties will not
step forward and advocate

946
01:25:24,187 --> 01:26:05,494
these kinds of reforms. We need
to put pressure on them.

947
01:26:05,561 --> 01:26:08,664
-So arguably, although
the foundations of the fiscal

948
01:26:08,731 --> 01:26:13,035
state have certainly been eroded
by offshore finance, the fact

949
01:26:13,101 --> 01:26:16,171
that we now know about it
means that perhaps we have

950
01:26:16,239 --> 01:26:19,342
the possibility of a greater
democratic handle on it.

951
01:26:19,408 --> 01:26:22,678
This is something that
now affects individuals.

952
01:26:22,745 --> 01:26:26,349
Until 2008, perhaps we didn't
see it so clearly.

953
01:26:26,415 --> 01:26:29,452
What the bankers do has
direct consequences for every

954
01:26:29,518 --> 01:26:41,196
individual and we can
now see that.

955
01:26:41,264 --> 01:26:46,201
-The reason in fact that the tax
justice movement in general

956
01:26:46,269 --> 01:26:51,540
are growing as a worldwide
phenomenon because, precisely

957
01:26:51,607 --> 01:26:55,711
because the experiment we ran
with liberalization

958
01:26:55,778 --> 01:26:59,214
of markets didn't work.

959
01:26:59,282 --> 01:27:03,719
We don't have a welfare state
anymore. We've had 30 years

960
01:27:03,786 --> 01:27:58,607
of dismantling it.

961
01:27:58,674 --> 01:28:01,610
-And in Europe we can talk
about, you know, the corporate

962
01:28:01,677 --> 01:28:04,279
state, and it has another name
and that is fascism.

963
01:28:04,347 --> 01:28:06,782
And fascism is stalking
the streets of Europe once

964
01:28:06,849 --> 01:28:10,619
again, you can see it on
the streets now in countries

965
01:28:10,686 --> 01:28:13,556
which are failing. And in many
cases they're failing because

966
01:28:13,622 --> 01:28:16,825
the governments like the Greek,
government of Greece, was

967
01:28:16,892 --> 01:28:21,630
incapable of taxing effectively.

968
01:28:21,697 --> 01:28:26,635
And in an era of globalized
capital markets, you can't

969
01:28:26,702 --> 01:28:29,137
preserve national sovereignty
without a framework for

970
01:28:29,204 --> 01:28:31,440
international corporations.

971
01:28:31,507 --> 01:28:33,642
-International law has to change
and these companies need to be

972
01:28:33,709 --> 01:28:36,812
held accountable for tax law,
tax evasion no matter what

973
01:28:36,879 --> 01:28:40,315
country they're in. And I think
it's just like other things

974
01:28:40,383 --> 01:28:44,319
like human rights abuses,
like work standards worldwide.

975
01:28:44,387 --> 01:28:46,822
This stuff need to become
globalized. It's a joke to think

976
01:28:46,889 --> 01:28:49,157
that these countries are
going to be held accountable

977
01:28:49,224 --> 01:28:52,661
by one certain nation's laws
on tax. It has to be a global

978
01:28:52,728 --> 01:29:21,189
thing. And it really has to
evolve to that point I think.

979
01:29:21,256 --> 01:29:26,529
-In case of political power,
we not only see this enormous

980
01:29:26,595 --> 01:29:29,865
concentration of wealth beyond
the realm of taxation.

981
01:29:29,932 --> 01:29:33,536
But the reverse side of that is
increased representation

982
01:29:33,602 --> 01:29:36,371
without taxation
for those interests.

983
01:29:36,439 --> 01:29:39,708
And so they have the best
of both worlds. Citizens

984
01:29:39,775 --> 01:29:43,712
of nowhere for tax purposes
and super representation

985
01:29:43,779 --> 01:29:50,619
without taxation. And that's
just not a solution we can live
with.

986
01:29:50,686 --> 01:29:52,888
-At the end of the day, this is
the tax haven, the offshore

987
01:29:52,955 --> 01:29:56,725
system is a project
of the world's wealthiest

988
01:29:56,792 --> 01:29:59,895
and most powerful people.
And they will always be pushing

989
01:29:59,962 --> 01:30:03,899
for this system to exist
and the challenges to get

990
01:30:03,966 --> 01:30:06,735
the people to sort of push back
against that and to understand