Tax Doesn't Have to Be Taxing: London's ‘Onshore’ Finance Industry and the Fiscal Spaces of a Global Crisis

Abstract

In this paper I will explore London's onshore fínance industry and how it facilitates corporate tax avoidanee programmes. In doing so, 1 will diseuss how financial elites design transactions and eorporate activities so as to minimise their exposure to taxation, and how these structures are shaped by the international geographies of taxation. I will investigate an area of London's financial sector that has previously been neglected by geographers and social scientists. Finally, I turn to illustrate how tax minimisation strategies are implemented, through the example of residential mortgage-backed securitisation, and how tax-minimisation strategies made securitisation a practical tool for financiers. This provides new insights into how taxation elites faeilitated the increased fínancialisation of Britain's economy and the severity of its exposure to the credit crunch.

The economic geography of offshore incorporation in tax havens and offshore financial centres: the case of Chinese MNEs

“…As with the IB literature, however, there is still limited firmlevel research on FDI to THOFCs, albeit that such jurisdictions are gaining increasing recognition in economic geography (Wójcik, 2013;Wainwright, 2011). Addressing this gap, our findings show that one way in which Chinese businesses address domestic market imperfections that have been created and sustained by government policies and regulations, such as the markets for capital and property rights, is by establishing offshore companies.…”

“…This, for example, has involved undertaking modelling using national level data (Rose and Spiegel, 2007;Dharmapala and Hines, 2009). To date, therefore, the ways in which firm-level financing via THOFCs impacts on corporate economic geography has received comparatively less attention, both within economics and economic geography, with only a few exceptions (Wójcik, 2013;Wainwright, 2011). Yet, as noted, very large shares of global FDI flows are channelled through THOFCs.…”

“…These are now strongly shaping international economic geography and, increasingly, the offshore world (Maurer and Martin, 2011;Vlcek, 2013;Wójcik, 2013). By cross-fertilizing ideas found in financial geography and mainstream IB and then applying them to how Chinese MNEs use THOFCs, we have made a start in addressing some of these prominent and important gaps highlighted by economic geographers (Wainwright, 2011;Wójcik, 2013).…”

“…The same charge can be even more strongly levelled at IB scholars, who have, with one or two exceptions (Beugelsdijk et al 2010;Sutherland and Ning, 2011), almost entirely elided this topic from the remit of their analysis, despite the huge volumes of FDI flows and stocks held offshore. Financial geographers have called for more research (Wainwright, 2011), including for the type of firm-level study undertaken here, which also incorporates consideration of emerging market MNEs (Wójcik, 2013). These are now strongly shaping international economic geography and, increasingly, the offshore world (Maurer and Martin, 2011;Vlcek, 2013;Wójcik, 2013).…”

Which Crisis? The Need to Understand Spaces of (Non)Tax in the Economic Recovery

“…have been largely neglected by geographers, with a few exceptions (for example, Cameron, 2006;Roberts, 1994;Wainwright, 2011). The effect of this lacuna is to obscure the important role of taxation within political economies and their vital role in holding together modern nation-states, through fi nancing public services and managing the redistribution of wealth.…”