London, Los Angeles, Boston Face Protests Over Cuts, Taxes
Thousands of students, public- sector workers and tax activists will take to the streets of London tomorrow to protest Britain’s deepest public spending cuts since World War II. In Los Angeles, Boston and Buffalo, demonstrators will demand companies pay more tax.
UK Uncut, a group that uses humor to demand companies pay more tax, said it seeks to shut shops and occupy branches of Royal Bank of Scotland Group Plc (RBS), Lloyds Banking Group Plc (LLOY) and Barclays Plc. (BARC) It plans to turn an Alliance Boots Plc pharmacy into a hospital and a Barclays into a church “bail-in” service. US Uncut plans events in 40 cities, including Los Angeles and Boston, targeting Bank of America Corp. (BAC)
UK Uncut’s focus on London’s Oxford Street will coincide with a demonstration organized by the Trades Union Congress at which thousands of people will march through the city to a rally in Hyde Park. The TUC and UK Uncut say the cuts wouldn’t be so painful if companies and bankers paid their fair share of tax.
“We don’t want to pay for the banking crisis,” said Becca Davies, 32, a UK Uncut organizer and Londoner who works in education. “The people on benefits shouldn’t have to be destroyed to pay for the banks. We all pay our taxes, corporations should do the same.”
The U.K. coalition government plans cuts that will cost more than 300,000 public-sector jobs over four years as it tackles a 146 billion-pound ($235 billion) deficit. U.K. Chancellor of the Exchequer George Osborne said March 23 that corporate tax would be reduced for the next four years, bringing it to 23 percent. The government said it would raise the bank levy next year as an offset.
Bank Bonuses
U.K. protesters have focused on bank bonuses as well as taxes. RBS, which is 83 percent owned by the taxpayer, said March 17 that it paid 323 people it designated as key staff an average 1.16 million pounds each. Barclays awarded Chief Executive Officer Robert Diamond as much as 10.1 million pounds in salary, bonuses and stock for work last year.
Banks worldwide were bailed out with taxpayers’ money after the September 2008 collapse of Lehman Brothers Holdings Inc. (LEHMQ) More than 60 percent of the U.K.’s 2.24 trillion-pound national debt was generated through taxpayer assistance to banks, according to Office for National Statistics estimates.
“The people whose jobs were destroyed were in no way responsible for the excesses of the financial sector and the crisis that followed,” Bank of England Governor Mervyn King told a parliamentary committee on March 1. “I’m surprised the real anger hasn’t been greater than it has.”
Barclays, Tesco
Barclays, whose Canary Wharf headquarters lobby was occupied March 7 by local residents, said in an e-mailed statement that “we are one of the U.K.’s largest taxpayers, and the financial services industry as a whole is the single largest tax contributor to HM Revenue and Customs every year.”
Barclays said on Feb. 18 it paid 113 million pounds in corporate tax in 2009. The lender reported net income of 9.39 billion pounds for the same year.
Tom Hoskin, a spokesman for Tesco Plc (TSCO), Britain’s biggest supermarket chain, said UK Uncut’s claim that it doesn’t pay enough tax is “just plain wrong. Tesco is among the highest taxpayers in the U.K.” Bobby Leach, a spokesman for the world’s biggest mobile-phone operator Vodafone Group Plc (VOD), said “we do pay corporate tax; that is evident from our accounts.”
While the U.K. event focuses on London, US Uncut lists events in 40 cities. In Jackson, Mississippi, US Uncut founder Carl Gibson said he’s organizing one involving fake money and a child’s swimming pool. The Washington, D.C. group is promising a “carnival of protest” with “full-on creative action.”
Gibson said US Uncut has borrowed ideas, a web template, and tactics from UK Uncut, which started in October.
Corporate Tax
“The talking heads and politicians keep saying, ‘what can we cut?’” he said. “Change the tax code; make sure the taxes are paid. If these corporations paid their taxes, none of these cuts would have to happen.”
U.S. corporate tax as a percentage of federal receipts dropped to 6.6 percent in 2009 from 26.5 percent in 1950, while the tax burden on individuals rose to 43.5 percent from 39.9 percent, according to a report by the December Joint Committee on Taxation.
Bank of America spokesman Jerry Dubrowski said US Uncut concerns are misplaced. “If you look over a 10-year period, we have paid more taxes than any company in the U.S.,” he said yesterday in a phone interview. “The last two years, we have had losses that reduced our tax in the U.S. That’s understandable, if you don’t have income, you don’t pay tax.”
A spokeswoman for Boots wouldn’t comment. Tania Foster- Brown, a spokeswoman for Arcadia Group, which owns Top Shop and BHS outlets on Oxford Street, also declined to comment when contacted by Bloomberg.
To contact the reporter on this story: David Altaner in London at daltaner@bloomberg.net
To contact the editor responsible for this story: Colin Keatinge at ckeatinge@bloomberg.net
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