What If Everyone Could Use Big Business Tax Havens?

An article by Alba Muñoz that appeared in PlayGround examines the Troika Fiscal Disobedience Consultancy project (translation mine):

Troika Fiscal Disobedience Consultancy

A Tax Haven For All: The Decisive Rebellion?

Disobedience.eu is born, a consultancy designed to resist the Troika

An old guy on my block used to say: “If you’re going to steal, steal big. Because if you stay small, you’re just a thief, but if you steal big you’ll be a millionaire. All it takes to be rich is to skim a little from everybody.”

“You make a lot of sense!” I thought. But the old guy never stole, at least not on a grand scale, and to me, frankly, the proof is in the pudding. The world is an unfair place, sir, and what are you going to do?

He who has the most pays the least, and this, at least when it comes to taxes, goes without saying: all of the companies in the IBEX 35 — those that are publicly traded and have the most liquidity in Spain — are located in tax havens and pay miniscule amounts to the Treasury in comparison to their earnings. Citizens, small- and medium-sized businesses, aren’t so fortunate with the tax collector.

It’s unfair, but legal. They bask in the sun on a private beach, and to the rest of us they leave only a miserable puddle to splash around in. Is there really nothing that can be done?

Beyond complaining, there’s a new plan — a yet untried option: drag our towels and camping chairs onto the private beach to say, “Hello, buenos días, good morning, guten morgen, we are also in the club.”

, Disobedience.eu, the first tax rebellion consultancy meant for the common people, was launched.

It all began when the artist Núria Güell contacted Enric Duran, the activist known as the “Robin Hood of the banks” for swindling — or expropriating, you might say — some half a million euros from various financial institutions in , with the motive of finding a way to buck the Troika. From there a small tax advisor emerged, the Troika Fiscal Disobedience Consultancy.

A score of European activists, and Duran from the underground, launched what may come to be the largest hack of the financial system in Europe, at least on the part of the citizenry.

“It starts by resisting the Troika through financial strategies, by playing with the law in the same ways as the neoliberal corporations,” says Güell.

The idea is to imitate Apple, Google, and Banco Santander — not for personal gain, but “to stop paying an illegitimate debt and to start financing the common good.”

“The Troika is dedicated to commandeering and privatizing the commons, it has a colonizing nature: all the countries that are subjected to it, like Spain, Ireland, or Greece, lose their sovereignty. We must create a parallel financial system.”

Fiji, the Cayman Islands, Liechtenstein, your home

If we were to do a math problem, it might go as follows: Say that John has a balance last trimester that comes to 2,000 euros VAT. John sends an email to Disobedience.eu with the amount he wants to resist (2,000 euros) and they will supply him with an invoice for that amount.

John will pay 8% for the service: management fees (1%) and a contribution to a common fund (7%). “The rest (92%), although recorded as paid, will not actually be charged. As far as I know, to forgive a debt is not a crime,” says Güell.

So John has an invoice that states that he has made a tax payment in Spain, although in reality no such thing happened.

“In the EU there is free trade, but in practice there is no common fiscal policy, and the justice system is not coordinated. The countries as a result have trouble obtaining information from one another. The big companies benefit from this, and now the little guy can do so as well. It would be very difficult for the administration of the country where he is consulting to know who has not claimed the income.”

John has evaded taxes, mimicking the techniques of the big multinationals, but for another purpose.

“92% of the money is yours. The idea is that you can dedicate it to projects for the common good, which are increasingly privatized or abandoned by the state.” For example, a support network for refugees or school libraries.

Desobedience.eu was inspired by the Coperativa Integran Catalana and the Right of Rebellion Collective, and will be linked to the international Fair Coöp collective. For this reason, Güell expects there will be a rapid increase of clients, projects, and affinity groups: “The assignment of the funds is up to each client. Nobody will be monitoring or checking on where it is going.”

Isn’t this a do-gooder form of tax evasion? How can you prevent “dishonest” evaders from using this tool?

Activists will sift the clients: “If a capitalist business wants to use this service to evade taxes, it will be turned down. On the other hand, a group of lawyers with a social focus have already been accepted.”

Gandhi versus Starbucks

The tax disobedience initiative has sparked interest, but also an understandable fear of possible legal problems. Güell asserts that the activists involved have everything sorted out: “The only people who run a real risk are those who put in their names to form the company, but they are insolvent and that protects them.”

Throughout history there are numerous examples of economic disobedience. “From the Boston Tea Party in to the Salt March of Mahatma Gandhi in .” Though there are also much more recent examples:

In the residents of Crickhowell, a town in Wales, grew tired of paying much more in taxes than Starbucks and decided to declare themselves a tax-free town and to create a company in the Cayman Islands: “They initiated a collective action of tax resistance, and since then the State has not done anything.”

With the activists of Disobedience.eu there is more resolution to attack the core of the system than fear of the possible repercussions. Furthermore, for Güell, economic disobedience is better politics than voting in democratic elections.

“If we do not have autonomy with respect to the Troika and the markets, there is no way to advance the many initiatives that we put forward. They are the obstacle, because they are above democracy. The dictator is only a dictator if he has subjects; disobedience is the only way remaining to us. Furthermore, disobedience is intrinsic to democracy.”

The real hurdle is to go beyond the environmental activists and the more politicized minorities and to extend the initiative across the whole population.

“Workplace exploitation; inability to make ends meet; a rainbow assortment of pills for depression; daily suicides from eviction, foreclosure, or meaninglessness; and murderous barbed-wire over some fictitious dividing lines. Why dedicate your life to feed this machinery that only benefits a minority?” asks Güell.

“You just need to open your eyes to notice that Europe is at a dead-end, caught between the technocrats of the Troika and the anti-immigration nationalists. The European Union is no more than a financial plan for plundering social wealth and impoverishing the workers, a set of legalized financial crimes that act to transfer the income of citizens to the banks and large corporations.” And as such, the response should be collective and in the financial sphere.

As Aristotle told us, politics does not manage the public sphere, rather our everyday actions are what create policy.

The actual mechanism by which the tax evasion happens is left a little obscure by this article, but as best I can gather it’s something like this:

In Europe there is a value-added tax, which is something like a sales tax. It is added to the price of the good as it increases in value during its manufacturing stages, but intermediate goods that are sold to other sellers (for instance, goods purchased by merchants for resale) do not have more tax added to them.

If you’re buying something for resale, rather than paying the tax at the time you buy it, you indicate to the seller that you’ll be adding the tax to the price of the goods at the time you resell it, and then whoever sells the goods to you sells you the goods tax-free. An exchange of invoices allows the tax agencies, in theory, to follow the supply chain to whoever is responsible for collecting and remitting the tax.

But this process is frequently gamed. For instance, if the final seller is a sort of Potemkin business that vanishes before taxes are due, then the taxes never have to get paid. Or, apparently, if that seller is officially domiciled outside the European Union — say, in the Cayman Islands or something.

So what the Consultancy seems to be doing is to be providing invoices saying that they’re responsible for paying any value-added tax that ordinarily would be paid by a resisting small business. They charge the business for the cost of the goods, but they don’t bother to collect most of the money. So the business is off the hook for the tax, the Consultancy doesn’t generate any income that might make it liable, and everyone walks away a little happier.

Something like that, anyway.

They also seem to be doing some of their transactions (the percent of the invoice they do intend to collect, for instance) in “FairCoin” — a bitcoin-like currency. I’m not sure what advantages if any this gives to the Consultancy or the businesses that use it, but it seems like something that could boost the value of FairCoin as a currency, and maybe that’s the point.


I have a single article in my sample of articles from concerning the tax resistance campaign against elements of the Education Act. This, from the Northampton Mercury, concerned an auction of goods seized from tax resisters in which, somewhat bizarrely, one of the resisters was also the auctioneer. Excerpts:

Passive Resistance in Northampton.

The first sale of the distrained goods of Passive Resisters in the Borough of Northampton took place at the Auction Mart, Abington-square Cafe, Northampton, on . About 90 Passive Resisters who conscientiously objected to contribute to the rates that proportion of the amount which would be devoted to the support of sectarian teaching, were summoned at the Northampton Borough Police Court on . The distress warrants were issued in due course, and they were executed, generally by the assistant overseers of the several parishes, about ten days or a fortnight ago. Mr. G.W. Beattie, one of the resisters, proffered his services as auctioneer free of charge, and needless to say the offer was gratefully accepted. The sale tok place in Mr. Beattie’s auction mart, where he had stored the goods free of charge from the date of their seizure. There were in all 87 lots, including two from the village of Duston. The auctioneer himself had his goods seized on three distress warrants — one for his residence, the second for his office in College-street, and the third for his auction mart. One or two other resisters were summoned for two rates. A complete list of the resisters, the goods seized, and the amounts required by each warrant, appeared in ’s Northampton Daily Reporter.

At , when the sale commenced, the room was full, quite 250 persons being present, the resisters being well in evidence. Mr. Beattie was greeted with hearty applause when he took his stand at the table. In opening the proceedings he said that if he had not been a passive resister and in full and hearty sympathy with the movement nothing possible could have induced him to take that position that evening (hear, hear, and applause), for it was at once an unpleasant and unpopular duty. (Hear, hear.) To the greater part of that audience he knew that he need make no apology. (Hear, hear.) He thanked the overseers for allowing him to act as auctioneer at that sale. (Hear, hear, and applause.) The conditions of the sale were: Cash upon delivery and before removal. (Laughter.) He had arranged with the Rev. J.F. Nodder, the secretary of the Citizens’ League, that Mr. Nodder should start bidding for those resisters who desired their goods to be bought in. Mr. Nodder would in such cases name the sum required by the warrant, plus the expenses, and if there were no further bids the goods would be at once knocked down to Mr. Nodder.

The sale then commenced. The proceedings were most orderly and good humoured. In nearly every case the goods were bought in by Mr. Nodder or by the owner personally. Once or twice some would-be humourist bid 2d. or 3d. for a ten-shilling article before Mr. Nodder could bid the amount required, and now and again there was a little competitive bidding, but in hardly any case was there any serious attempt to purchase the articles. Of the 87 lots about 70 were knocked down to Mr. Nodder’s first bid without any attempt at competition. In half a dozen cases where the bidding did not equal the amount required by the overseers the auctioneer announced that the articles were by arrangement bought in by the assistant overseers concerned.

The names of one or two prominent ministers and citizens who are well known in the movement were received with hearty applause as soon as their goods were offered…

…Mr. Frank Bates put into the sale a framed portrait of the Rev. Dr. Clifford, and, needless to say, the portrait of the apostle of passive resistance, who is such a favourite in Northampton, quite brought down the house…

Mr. Beattie [said]… he was only sorry that in Northampton, known throughout the world, and certainly throughout the length and breadth of this kingdom, as a town which stood for religious freedom, that there were only 90 resisters. (Hear, hear.) They had not reached the end of the struggle yet by a very long way. There were some in connection with the League who, if he had judged them aright, intended to show their resistance in a very different form ere long if the occasion demanded it. (Applause.)

The sale occupied barely an hour.

A protest meeting was held shortly after. Hymns were sung, a letter from John Clifford was read, and the usual speeches were given. One of these was by Rev. Arthur Morgan, who said in part:

He was beginning to think that instead of a Passive Resistance Brigade, they would have to have a Prison Brigade. (Applause.) They knew the inconvenience of having their goods sold, and some of them knew what it was to have to pay more than they could afford for the rights of conscience, but when they saw men sneering and laughing at their action they were beginning to wonder whether they should not rise to a higher level and say to their critics, “If you think this is a joke, if you think this is a mere trick on our part to overthrow the Government, you have sadly mistaken us, and sadly mistaken our action. (Applause.) We are prepared to go to prison for the Right (applause), and I for one,” added Mr. Morgan, “am prepared to step across the dividing line from being a Passive Resister into becoming a member of the Prison Brigade.” (Cheers.) The Education Act must be killed, and if the only way to destroy it was through the prison, then, God help them to put upon themselves the brand of the prison, the stain of the prison house, for they must kill it. (Loud applause.)

I also found an early mention of suffragette Dora Montefiore’s tax resistance, in which it is suggested that she learned the tactic from the anti-Education Act campaign. This comes from the Leamington Spa Courier and Warwickshire Standard:

Dora the Determined.

“Evil communications corrupt good manners.” So wrote Tertullian, so quoted Paul, so it has happened in the case of Mrs Dora B. Montefiore, of Hammersmith. The lady being undboutedly of Hebrew origin, we cannot suppose that she has much sympathy with Dr. Clifford, the apostle of passive resistance. But that she has been studying Dr. Clifford’s methods is evident. She has not only studied them, but has resolved to put them into practice. Not indeed so far as the education rate is concerned, but with respect to a rate of much more importance, the Income Tax to wit. Upon what grounds? Non-representation. She holds strong views on the subject of female suffrage, and she has informed the Daily News that she has resisted the claim for Income Tax because she is refused a voice in the spending of the taxes, and “taxation without representation is tyranny.” Her goods have been seized, and will be sold on . There is, of course, no reason why “passive resistance” should not be adopted by the whole army of faddists; but what becomes of civilised and constitutional government in the meantime?

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