Wednesday, 05 June 2013 09:11

Taxation Without Representation: UK Taxpayers Learn From The Irish What US School Kids Get Taught In 3rd Grade Featured

Reggie Middleton on UK Bank Taxation Without Representation

First up, a quick history lesson courtesy of Wikipedia:

"No taxation without representation" is a slogan originating during the 1750s and 1760s that summarized a primary grievance of the British colonists in the Thirteen Colonies, which was one of the major causes of the American Revolution. In short, many in those colonies believed that, as they were not directly represented in the distant British Parliament, any laws it passed taxing the colonists (such as the Sugar Act and the Stamp Act) were illegal under the Bill of Rights 1689, and were a denial of their rights as Englishmen.

The phrase captures a sentiment central to the cause of the English Civil War, as articulated by John Hampden who said “what an English King has no right to demand, an English subject has a right to refuse” in the Ship money case.

... The British Parliament had controlled colonial trade and taxed imports and exports since 1660.[1] By the 1760s, the Americans were being deprived of a historic right.[2] The English Bill of Rights 1689 had forbidden the imposition of taxes without the consent of Parliament. Since the colonists had no representation in Parliament, the taxes violated the guaranteed Rights of Englishmen.

...The phrase had been used for more than a generation in Ireland.[7][8] By 1765, the term was in use in Boston, and local politician James Otis was most famously associated with the phrase, "taxation without representation is tyranny."[9] In the course of the Revolutionary era (1750-1783), many arguments seeking to resolve the dispute surrounding Parliamentary sovereignty, self-governance, taxation, and the constitutional rights of 'commoners' to representation were pursued.[10]

Why go through this US grade school history lesson? Well, UK taxpayers have been paying substantial taxes to essentially bail out an Irish bank with no say so in how said bank is operated. As a matter of fact, they don't even know the extent of said bank's indebtedness despite paying a ton of money to bail it out. RBS investors have taken material losses due to this very same bank. Both of these parties went without adequate disclosure or... "representation".  A couple of months ago I penned a piece titled "I Illustrate How The Irish Banking Cancer Spreads To The UK Taxpayer And Metastasizes Through US Markets!" wherein the Royal Bank of Scotland's failure to adequately report the full (and quite excessive, in my opinion) liabilities of its ill-fated acquisition, Ulster Bank of Ireland. Ulster Bank pumped massive losses into RBS, who in turn neared collapsed and required a massive bailout by the UK taxpayer (billions of pounds massive), who still owns 81% of this sick creature as I type this missive. Those losses were generated by an Irish bank in Ireland, but paid by UK citizens, and the losses were materially understated in my opinion for Ulster Bank was/is much less solvent than RBS is letting on through its US SEC reporting, having encumbered all of its ECB eligible assets available for lending... ALL OF ITS ASSETS! See "I Illustrate How The Irish Banking Cancer Spreads To The UK Taxpayer And Metastasizes Through US Markets!" for complete details, it's a doozy!

I know more than a couple of UK taxpayers who'd much not rather pay Irish bad debts. I decided to rub a little salt in the UK wound by throwing some arithmetic illumination on the situation via an embedded Irish bad bank tax calculator...

The app below allows the UK Taxpayer to calculate for themselves exactly what their individual contribution (pro rata) is to the government bailout of RBS.

I've taken the liberty of pre-populating the input fields for you, but if you don't agree with the numbers then by all means insert your own!

Lo and behold, about a monthafter my reports the BBC published an article titled "Will the bad be taken out of RBS?" wherein they reported on plans to split the farce formerly known as a bank - RBS - into a good bank/bad bank scheme (ahem!). Shortly thereafter, the Irish Times ran the following article "UK Treasury considers Irish takeover of Ulster Bank - Reports suggest UK authorities want the Irish government to take control of bank". I really, really wonder why? As excerpted:

A “radical” restructuring of Royal Bank of Scotland, which is largely owned by the UK taxpayer, could see it transfer control of its Irish operation, Ulster Bank, to the Irish government.

The future of RBS is currently being considered by the Parliamentary Commission on Banking Standards, and a draft report from the commission called for the split of RBS into a good bank and a bad bank.

However, a speculative report from BBC business editor Robert Peston has suggested that “another, more radical option is also being assessed by the Treasury”.

This would involve somehow removing Ulster Bank from RBS. The bank has been one of the worst performing parts of the group, with losses of £1 billion in 2012.

Mr Peston said that one idea raised is to “transfer Ulster Bank into the arms and ownership of the Irish government”, by swapping all or part of the bank for the British loans and investments currently owned by Ireland’s “bad bank”, the National Asset Management Agency (Nama).

Hmmm... That's interesting, trading trash for garbage!

Last modified on Wednesday, 05 June 2013 10:32

www.boombustblog.com | This email address is being protected from spambots. You need JavaScript enabled to view it.