Power Dynamics

Italians and Greeks don’t pay taxes

The title is ironic and may be partly true of course as many oft-repeated statements are. The most obvious riposte in defence of small-time Italian and Greek entrepreneurs is neither do large multinationals and awareness-raising charities, pay very much tax, more on that later. The accusation serves a simple purpose, to justify the huge cutbacks in public expenditure enforced by the newly appointed governments of Italy, Greece and, to a lesser extent, Spain, while the UK continues to bankroll one of the world's most generous, intrusive and life-altering welfare bureaucracies. If we believe the neoliberal intelligentsia, Greece, Spain and Italy need to urgently balance their books while their citizens should embrace the opportunities created by deregulated labour markets and start paying taxes. By contrast, the same economists support the injection of huge sums of virtual cash into the economies of countries like the UK and US and urge the government to refrain from reducing social welfare for fear of triggering a much maligned recession (would that be a bad thing in a country notorious for frivolous consumerism) in an economy almost entirely reliant providing services to international trade.One of the most obvious differences between Southern and Northern Europe, until recently, has been the strength of small independent businesses relative to that of large conglomerates. On paper countries like the UK have plenty of small businesses, but most are contractors, often sole traders who merely set up a limited company to pay less tax, but in reality work exclusively for, and very often on the premises of, large multinationals or smaller firms, who in turn provide services to large multinationals. Very few British small business are active in the primary or secondary sectors and those that either occupy a niche enabling to sell their merchandise at a premium or resell their products to larger companies. Smallholders in Wales, Northern England and Scotland have one of the highest suicide rates in the UK. Most successful small businesses provide services or sell repackaged or assembled products. As a result, most UK residents work either directly or indirectly for large corporations and their taxes are managed either by their employer or accountants. Even a small café owner relies on corporate largesse with the autonomy of a modern shoeshine boy.
Yet much of the wealth entering the UK is generated from the exploitation of foreign resources, whether human, edible or inanimate. Multinationals can shift production from one region to another or just subcontract to suppliers, to take advantage of the most competitive labour forces and lower rates of corporate tax. They merely need to pay tax of revenue generated directly in the UK, a small percentage of their global operations. International gangsters like Abramavich pay zero tax as Non Doms, while trillions of untaxed pounds are traded on the London Stock Exchange. So when the BBC claims Southern Europeans don't pay taxes, they mean they cannot have submitted themselves to the control of large multinationals. To illustrate my point,, Britain's biggest online retailer, generated sales of more than £3.3bn in the country last year but paid no corporation tax on any of the profits from that income. They can afford the very best corporate tax lawyers, yet small businesses cannot.
Another classic way of dodging taxes is to set up a not-for-profit foundation, e.g. in the tax year 2010-2011 former Prime Minister, Tony Blair, paid just over £350,000 tax on £12 million earnings. Even your average modern school student can work out that's just 3%. Many charities are little more than lobbies for various socio-political agendas, whose main beneficiaries are power-hungry multinationals. This is particularly evident in health, as pharmaceutical and healthcare organisations seek to expand markets for their products and services by raising awareness of perceived conditions. A charity for attention deficit with hyperactivity disorder may sound innocent enough purporting to represent parents concerned about their children's behaviour, but by medicalising their condition, they promote pharmaceutical solutions or generate demand for other interventions. As such organisations occupy plush buildings in city centres and spend millions on marketing, one wonders if they derive their funds from street fundraisers or sponsored activities. The records of many such charities reveal huge contributions from spurious trust funds, apparently independent, supported by parastate entities, i.e. big business. Yet they enjoy almost complete tax exemption.
As Italian, Greek and Spanish small business people go bankrupt and resort to drastic measures like suicide, multinationals evade billions.