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Kai Ryssdal: The political costs of all the economic austerity happening in Europe became a bit more clear over the weekend. Governments in Ireland and Portugal felt the wrath of voters and their coalition partners in government. In Britain, the spending cuts have met the expected responses. Students have demonstrated against tuition increases. Labor unions have marched against public sector job losses. There will be another protest this coming weekend — with a bit of a twist. Instead of targeting the government, a group called U.K. Uncut will go after rich people and wealthy companies.
From London, Marketplace’s Stephen Beard reports.
Stephen Beard: If there’s one thing that really riles the anti-austerity protesters, it’s this.
U.K. CHANCELLOR GEORGE OSBORNE: We’re all in this together.
The government’s claim that everyone is sharing the pain of deficit reduction.
David Cameron: Let’s pull together. Let’s come together. Let’s work together in the national interest.
Prime Minister David Cameron thrilled his party supporters with that rallying call, but it has a hollow ring for members of U.K. Uncut, like Danielle Wright.
Danielle Wright: The poorest are being disproportionately hit by the austerity measures and the cuts, and rich business and rich individuals are getting away with not contributing to the society of which they are a part.
Tax dodging — and by that she means both legal avoidance and illegal evasion — is costing the British government, she says, more than $190 billion a year. Stamp it out, close the loopholes, and she claims, there would be no need for deficit reduction: There would be no deficit.
Crowd, chanting: Pay your tax! Pay your tax! Pay your tax!
U.K. Uncut has aimed its campaign directly at the companies, which it claims, are dodging tax on a very large scale.
Crowd: Shame! Shame! Shame!
This was one of dozens of protests last month. A sit-in which forced the temporary closure of a London branch of the Topshop fashion chain.
Tom Davids of U.K. Uncut says the Topshop owner, Philip Green, is a top tax dodger.
Tom Davids: Philip Green owns one of the biggest retail empires in the country. And yet it’s not in his name. It’s in the name of his wife and she is resident in the tax haven of Monaco, which means that when he pays himself a £1.2 billion dividend it goes through her, and he doesn’t pay a single penny of tax on that.
Philip Green points out that his companies pay more than $100 million in U.K. tax a year. And his supporters say the Topshop boss is doing, quite legally, what millions of other Britons do.
Philip Booth is with the free market Institute of Economic Affairs.
Philip Booth: Very large numbers of households on quite low incomes do arrange their tax affairs to save themselves tax, obviously not as much as Philip Green saves through his schemes, but then they’re earning less in the first place.
Beard: So the real culprit here, in your view, is the government for imposing high taxes?
U.K. Uncut has targeted other companies too, including Britain’s best-known pharmacy group.
Boots commercial: Who cares if he’s got a stuffy nose and needs a good night’s sleep?
The protests have spread to the Boots retail chain; some of its stores have been occupied. Also, in the firing line one of the world’s biggest cellphone operators.
Vodaphone commercial: People depend on our network. Vodaphone. Power to you.
Vodaphone and Boots deny that they’ve done anything wrong. But John Christensen — a former accountant and auditor who now campaigns against tax avoidance — says that the whole avoidance industry has caused a major social injustice.
John Christensen: It’s shifted the tax charge away from corporates and away from rich individuals onto the backs of middle income and poorer people. This has greatly increased inequality here in Britain and arguably in the United States and elsewhere.
Sounds of protestors
U.K. Uncut’s campaign is reportedly causing dismay in many British boardrooms. The fear is that when the budget cuts begin to bite and state-funded hospitals and schools begin to close, the clamor for rich companies and individuals to pay more tax may reach some kind of crescendo.
In London, this is Stephen Beard for Marketplace.
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