Thursday, May 3, 2012

Tax transparency, democracy and "expertise"

Transparency is being fully contested in international tax circles:
The hosts were expecting a heated but constructive debate, and for most of the nine-hour conference delegates heard in turn the impassioned arguments of campaigners for country by country reporting and the deliberations of tax professionals whose main argument centred on the complexity of international tax.
The complexity issue is that if regular, uninformed people are given all the data, they will misinterpret it and hang effigies of the innocent.  This is an unconvincing argument that the OECD tried to imply with its consideration of the matter in 2011: “the issue of whether greater transparency could aid public debate on appropriate tax policy” would be “very difficult to assess” because the political discourse would involve “differing arguments, [that] can be used more or less responsibly.”  This is an argument that tax compliance is so subjective, no one could ever make sense of it definitively, so it's best not to argue it in public.  Only experts should do so, and then only in quiet rooms.

I was happy to see Sol Picciotto mentioned in the article, he's a terrific thinker and scholar on international tax:

During a discussion on tax dispute resolution Sol Picciotto, Emeritus Professor of Law at Lancaster University, interrupted James Bullock’s defence of modest meals shared at meetings with HMRC to say that the level of transparency being proposed was ‘quite clear – that taxpayers should declare what tax they pay in each country’.
Picciotto added: ‘As regards disputes, the terms of a settlement should be public. We’re not talking about sandwiches, we’re talking about the transparency of what tax people pay where. If a dispute goes to the tribunal, it’s public. If there’s a settlement, it should be public.’
Later, Judith Freedman, University of Oxford tax prof, said that publishing details of settlements ‘would not be that helpful’ to people: ‘What are they going to make of them? I want to have a properly instituted organisation which has independent experts who can scrutinise those settlements. That’s far better than leaving it to whoever happens to be able to pick up on this, the press …’
‘That’s democracy,’ a delegate shouted from the audience. Freedman continued: ‘I believe it’s the job of properly constituted organisations, rather than the press, to examine this because that would give us integrity and confidence in the system. These are very, very difficult things to understand.’
That statement is distressing on grounds of the expertise question alone.  Who decides what constitutes "a properly constituted organisation"?  Professor Freedman?  The Oxford Center for Business Taxation?

The article closes with a mention of a twitter feed associated with the conference, in which it was tweeted ‘It has to be admitted that few tax experts have oratory skills or passion comparable to [those of] tax campaigners and politicians.’

Perhaps, but it's a matter of backing and platforms, isn't it.


  1. Allison,

    I have a friend from Boston on my behalf who is thinking about trying to get a meeting with someone named Prof Stephen E Shays or the Harvard Law School over you know what(FATCA) of which Prof Shays was a key player in at Treasury(for educational reasons not to be argumentative). I was wondering if you knew Prof Shays and whether he might be someone willing to discuss the issue with a concerned citizen from an informational perspective.

  2. Tim can you send me an email? it's achristians at wisc dot edu