DAVID HASLAM, chair of the recently launched Church Action for Tax Justice, explains why it’s important Christians speak up for a fair tax system…
Church Action for Tax Justice (CAT) was launched on 17th April this year. It stands for a fairer and more effective tax system, where democratic governments set taxes to reflect the Common Good, and individuals and corporations pay their share. Its supporters believe that, in the context of increasing global inequality and unprecedented environmental challenges, the tax system can play a vital role in building more just and sustainable societies.
Tax also contributes to a cohesive society, fostering good relations among individuals and groups. Tax can:
• allocate the resources towards ensuring quality public services and infrastructure for all;
• redistribute income and wealth, providing the basis for an effective social safety net, and is therefore key to tackling poverty and inequality;
• support a just and orderly transition to a low-carbon, sustainable economy and thereby combat climate change;
• ensure everyone pays their fair share, so we all have a stake in society.
The CAT was launched on 17th April at the House of Lords, at an event attended by Lords Rowan Williams and Richard Harries, Dame Margaret Hodge, Methodist Leader Revd Michaela Youngson, and Quaker Leader Paul Parker. PICTURE: Supplied.
“Tax for Christians should not be seen as a burden: it’s a way of showing love for our neighbour and creating the type of just society which we find in the teachings of Jesus and the prophets.”
Tax for Christians should not be seen as a burden: it’s a way of showing love for our neighbour and creating the type of just society which we find in the teachings of Jesus and the prophets.
CAT has grown out of the Methodist Tax Justice Network which was set up in 2012 by a number of admittedly ageing Methodist activists. Most were already active in environmental issues but also felt it was urgent to address the global financial system which although creating wealth was also contributing to increasing inequality. It received modest financial support for its first five years from the Methodist Church, but this was then ended, which may have been a message from the Holy Spirit to look more widely.
During its development, the MTJN had partnered with the international Tax Justice Network, drawing on it for research and information, and also with Christian Aid and other aid agencies who were pointing out that the aid given by the ‘developed world’ was dwarfed by the financial outflows from poorer countries – by some $US160 billion according to Christian Aid. MTJN also encouraged the setting up of TaxJustice UK, to team up with other such networks in several European countries. CAT sees TJN, TJ-UK, Christian Aid and the members of Tax Justice Europe as partners in an increasingly globalised campaign. All of us are members of the Global Alliance for Tax Justice.
CAT has also teamed up with the Fair Tax Mark campaign, which offers companies the opportunity to go through a process which, if they fulfil all the conditions, they are awarded the Fair Tax Mark. The first Fair Tax Fortnight is being held in the UK from 9th to 24th June, and CAT is seeking to encourage churches to mark it by informing their congregations and designating one of the Sundays ‘Tax Justice Sunday’. Worship materials are available on the CAT website, and also guidance on how to become a ‘Tax Justice Congregation’.
Apart from awareness-building, CAT is also urging churches as investors to take up the issue of tax with the banks and corporations in which they invest. The MTJN produced a small booklet in 2016 Investigating our Investments in which 12 major companies in which the Methodist Church (among others) invests were examined and the different ways in which they dodge tax were outlined. MTJN urged the Methodist Finance Board to take up the issue with the companies – it has resisted doing so thus far but has now produced a policy on tax available on the Methodist Central Finance Board website, so we are hoping now to see more action.
The key aim for all tax justice campaigners is transparency, we are all pressing governments, quasi-government bodies like the Organisation for Economic Co-operation and Development and the European Union, companies and investors to offer as much transparency as possible. The main attraction of the so-called ‘tax havens’, which some describe more as ‘pirates’ caves’, is they are secrecy jurisdictions. They allow private trusts and foundations to be set up by wealthy individuals which hide money on which tax should be paid. This system was outlined in the ‘Bible’ of tax campaigners – Treasure Islands, by Nicholas Shaxson. It was reading that book which so shocked me that I thought “We have to do something about this!” Campaigners are arguing for a public register of all such trusts, many located in small states such as the Cayman and the British Virgin Islands. The lid was lifted on these by the Panama and then the Paradise Papers, but earlier leaks had shown how the system worked.
For companies, the demand is for ‘country-by-country reporting’, to show what is going on in each of the countries in which they operate. The eventual aim is for a system of ‘unitary taxation’ which sees transnational corporations produce one report for all the countries in which they operate, showing for each one the number of employees, assets, sales, profits and tax paid, so it can be judged whether excessive profit is being made in low-tax jurisdictions. The argument is that this is good for business in the end, as it becomes clear who is cheating and who is not.
Christian campaigners see Tax Justice as a mission imperative. The increasing inequality in our world is surely an affront to a God who makes it clear all human beings are his children and therefore need and deserve ‘an equal sharing of the things that earth affords’, as the hymn says. Yet the gap between rich and poor grows annually. In 2017/18 the foodbank where I live increased its food parcels from 460 the previous year to 590, and its hygiene packs even more. Meanwhile the Sunday Times ‘2018 Rich List’ informs us that the wealthiest 1,000 people in the UK increased their wealth to £724 billion last year, a 10 per cent increase on the year before.
Prophets such as Jeremiah and Amos would surely be offering a vigorous critique of a society which tolerates such difference, and allows children to go hungry to school in the UK, the sixth richest country in the world. A part of the answer must be a reform of the tax system, which would enable very wealthy individuals and companies to contribute a fairer share of what they hold.
People tell us it is all too difficult to change, but there is definitely movement as a result of the last 20 years of activity. The EU has taken a number of steps to require more transparency, despite the fact that some countries like Luxembourg, the Netherlands and the UK are tax havens in themselves. Many campaigners think it is also why many Brexit supporters in the UK want to get out of the EU, to avoid the tightening tax regime. The OECD has also been persuaded things need to change; it is developing a programme around what is known as ‘Base Erosion and Profit Shifting’, which shows how poorer countries have their tax base worn away by transnational corporations who move around their profits.
Some companies like Starbucks have been shamed by being caught out paying no tax by switching their profits even in richer countries like the UK out to headquarters in the US on spurious grounds such as paying royalties for using the brand name. And in May this year the UK Government was forced to accept a cross-party amendment to an Anti-Money-Laundering Bill to require British overseas territories like the Caymans and British Virgin Islands to set up public registers of the secret trusts and foundations incorporated there. The amendment was proposed by Dame Margaret Hodge, MP, former chair of the Public Account Committee, which hauled Starbucks, Google and Amazon among others into the UK Parliament in 2016/7, and has subsequently written a book on her experiences, Called to Account.
Tax collectors have a bad press in the Bible, and perhaps that has contributed to their dislike today. But taxation in the time of Jesus was entirely different, it raised money for the occupying Romans, the corrupt Herodian Court and the Temple elite, and did nothing for the craftsmen and peasants from whom it was extracted.
Tax is the price of a civilised society, argued US Judge Oliver Wendell Holmes. It is also a seriously cohesive force in bringing societies together. Arguably, tax is God’s way of sharing the enormous wealth which has been created from this Earth He has given us. Christians should rejoice that we are able to pay our taxes and seek to ensure everyone shares in ‘the joy of tax’.
Rev David Haslam is a Methodist minister and chair of Church Action for Tax Justice.
