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British Uprising: #ukcut

Protests aren’t just for Egyptians. The British people are under assault from their recently installed conservative government through a program of bitter austerity. In October 2010, British Prime Minister David Cameron announced cuts to every public service, enormous increases in fees and tuition, and an increase in the VAT tax from 17.5% to 20%. The goal is to reduce Britain’s public debt from 11% of gross domestic product to 2% by 2015. British Prime Minister David Cameron justifies his harsh actions by the Household Theory Of Government Finances, a theory with as much connection to reality as Trickle-Down Economics. In the US, economically ignorant politicians of both parties have adopted this rhetoric, and are working towards the same ends.

In Britain, a small group of people in a bar noticed that the cuts to housing subsidies and other programs directly damaging the lives of the poor totaled about £7 billion. Private charity isn’t going to make that up, especially when average Britons are facing a big tax increase.

The small group knew about Vodafone, a giant cellphone firm, with a tax bill of £6 billion pounds. Vodafone refused to pay, claiming that it was actually doing business at a post office box in Luxembourg. The Conservative Government settled the claim for £1 billion. If Vodafone had paid, it would have covered most of the bill for the cuts to programs for the poor for a year.

This small group got a few liberal journalists to announce a protest:

People were urged to gather at 9:30 am on a Wednesday morning outside the Ritz hotel in central London and look for an orange umbrella. More than sixty people arrived, and they went to one of the busiest Vodafone stores—on Oxford Street, the city’s biggest shopping area—and sat down in front of it so nobody could get in.

It worked. Passers-by were outraged. But it got no press. Then the next day three other Vodafone stores were shut down in Leeds, in an action not set up by the organizers of the London protest. The small group realized they could replicate their action. Check out this website for the rest of the story. Follow the Twitter feed #ukuncut. Read the blog posts. Suddenly, it has dawned on average Britons that the reason their society is crumbling is that the rich aren’t paying their fair share. And notice that this is a leaderless group for real, like the Egyptians, and totally unlike US astroturf parties.

Many giant US corporations pay tiny tax bills here, claiming that the profits are earned in low-tax islands in the Caribbean. Many of these schemes require the companies to keep the money overseas, because returning it to the US will force the payment of taxes. One of the requests of giant American companies when their CFOs had a private meeting with the President, was for another of those “tax holidays”, allowing them to repatriate their overseas money from tax havens by paying 5% income taxes instead of the 35% required by what we laughingly refer to as our corporate tax laws. Bloomberg recently reported on the ways these giants bring money back without paying taxes already, giving an estimate that they avoid payment of some $25 billion each year on repatriated money.

The primary beneficiaries of the failure to tax corporations are the very wealthy. In Britain, one man, Sir Phillip Green, owns several retail chain stores.

In 2005 the BBC calculated that he earned £1.2 billion and paid nothing in taxes—dodging more than £300 million in taxes.

That’s real money. The same thing happens here. In 2007, the richest 1% of Americans owned 49.3% (.pdf) of stocks and mutual funds. If corporations aren’t paying taxes, the benefits flow to these people as individuals.

You pay your taxes. The rich have a phalanx of bright young associates at law firms and CPA firms picking away at specific words and punctuation in the tax code for ways to game the system, and losing their souls in the process. As the Republican party moves towards an austerity mimicking the British, we can look to #ukuncut for a model of action.

Update:  To clarify, British “public debt” as used in the first paragraph refers to what we would call a budget deficit. The total British public debt is about £953 billion, about 64.6% of annual GDP.

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