Internet freedom under attack… Again

PUBLICATIONS / Newsletters / 2012 / Newsletter January
Internet freedom under attack… Again
You might not be aware of it, but an online war is being waged against the latest piece of totalitarian legislation to curtail internet freedom: the Anti-Counterfeiting Trade Agreement (ACTA).

Child pornography or terrorism have failed to install enough fear in people to give up their (internet) freedoms, but perhaps something seemingly unimportant as copyright infringements will allow politicians to pass privacy violating legislation right under peoples noses.ACTA is an abomination to self-respecting democratic countries. Countries that sign it pledge to shut down any website that supposedly violates a copyright law without need for a court order. Internet Service Providers (ISP) are made legally responsible for copyrights violations of their users, in effect forcing them to police online activity of their clients. ACTA also bans software that can facilitate the exchange of copyrighted material, whether it is used for this purpose or not. This includes popular tools such as torrent exchange, file hosting services or websites such as Sourceforge. ACTA has been passed by several countries already, including most of the EU, the US, Japan, South Korea, Canada and Australia.
Should ACTA become a worldwide standard, the implications for individuals and businesses will be huge. Imagine losing your internet connection due to one of your employees putting copyrighted material on their Facebook profile, or your website being taken offline because it contained a file or script that had copyright on it. And in order to avoid this kind of thing from happening, you’d have to instruct your personnel to be ‘copyright compliant’ and waste valuable resources.
The recent case of Megaupload, a file hosting service, demonstrates that this scenario is very plausible. Megaupload founder Kim Dotcom was arrested last week in New Zealand after the US had issued an arrest warrant. NZ police used two helicopters and a SWAT team to arrest the dangerous copyrights violator.
ACTA does not represent the first attack on our free internet and certainly not the last. Just like all previous attacks it will be stopped eventually, but it will take a fight before politicians come around. Hackers collective Anonymous has declared total war against politicians who support ACTA, closing down websites and threatening to disclose private information. People in Poland have taken to the streets in a massive protest. Popular web sites worldwide are asking their readers to flood the mailbox of any ACTA-supporting politician. You can contribute to maintain internet freedom by signing a petition, increasing awareness and voting politicians who support ACTA out of office.

The Freemont Group does not endorse copyrights violations, but we do believe the privacy and freedom of the average citizen matters more than the profits of a hand full of record companies.


Vodafone wins from Indian tax authorities
The Indian Supreme Court has ruled, to our relief, in favor of Vodafone and its subsidiary, Hutchison Essar. The Supreme Court ruling puts an end to the highly controversial case.Back in 2007, Cayman Islands-based Hutchison Telecommunications International (HTI) sold its interests to Dutch company Vodafone International Holdings (VIH) through the sale of shares in CGP Investments, a Mauritian Company, which in turn holds shares in Hutchison Essar, the Indian operator. The Indian court ruled, highly controversially, that Indian capital gains tax could be levied on the gain realised on the shares sold by the Cayman Island company, even though it only held the shares indirectly through its Mauritian subsidiary.

Mumbai´s High Court ruled in September of 2010 that: “the very purpose of entering into agreements between the two foreigners is to acquire the controlling interest which one foreign company held in the Indian Company, by another foreign company. This being the dominant purpose of the transaction, the transaction would certainly be subject to municipal law of India, including the Indian Income-tax Act”.
The court went as far as ordering Vodafone to pay a deposit of $496 million to the Indian government, which it now has to return with 4% interest.
The Supreme Court overruled the prior verdict, and confirmed Vodafone´s stance that it owes no taxes since it was a deal between two non-Indian companies. This decision will restore confidence for Indian investors and prevent a trend of shifting tax liabilities in the region.

It will also make India´s tax treaty network more valuable, as investors who use the UAE, Cyprus or Mauritius as their portal to the Indian markets are reassured that capital gains on their respective holding company remain outside the scope of the Indian tax authorities.


People of Iceland won´t bow to banksters
For the second time Iceland’s electorate voted down a proposal to repay debt held by large private banks (including Icesafe) who failed in 2008. Despite threads of international ‘isolation’, downgrading of Iceland’s credit rating, shutting down access to the IMF line of credit and ending the talks of EU and Euro accession, the people of Iceland voted overwhelmingly against the bailout.
There´s no doubt the economic crisis of 2008 dealt a huge blow to the Icelandic economy. But it was not that hard to predict that there had to be a readjustment for the years of trade imbalances: from 1988 to 2008 Iceland only had a trade surplus twice, in 1993 and in 1994. In other words, Iceland was exporting debt for most of these years based on (over) confidence in its future economic performance. When these expectations turned into a bubble, a correction was sure to come. The Icelandic Krona lost roughly 60% of its value in 2008 when Iceland’s’ overleveraged banks failed. But lo and behold, 2009 and 2010 have been years of trade surpluses. With the debt liquidated and the banks reduced to a more natural size, the (aluminum) industry and fisheries receive the investments they need to grow.
It will take a while before full employment has been restored, but 58,9% of Icelanders realize that independence and self-reliance are preferable to taking on a €4.4 billion debt and dependence on an international credit IV.



The guiltless millionaire
America´s ‘Patriotic Millionaires for fiscal strength’ manage to keep the attention of the mainstream media. They are millionaires after all. The issue of taxing the rich was highlighted last week when United States presidential candidate Mitt Romney finally released his tax records after much public pressure. When it was revealed that Romney´s effective tax rate on his $20,8 million annual income is only 13,9% outrage ensued. America has long maintained a relatively low tax rate on carried interest of 15%. Since Romney´s income consists mostly of interest, his effective tax rate (including deductions) is lower than that of the average American. While Romney defended himself by saying that he only pays what he is legally required to, this statement is not completely accurate. In 2007 a bill was introduced to increase the tax rate on carried interest to the corporate level of 35%. Mitt Romney´s former company Bain Capital, in which he still holds shares, actively lobbied against this bill. It seems keeping your taxes low is an easy job when you have enough money to write the law.

While some millionaires lobby for lower taxes, on the other side of the spectrum we find the ‘Patriotic Millionaires for Fiscal Strength’ who lobby for higher taxes. Their blatant hypocrisy was highlighted when a journalist from the daily caller asked several of these altruistic millionaires to voluntarily donate to the Treasury. For years the United States Treasury has had an office and an account number to donate to and help pay off the national debt. You can see the response of these millionairs below.

Apparently a voluntary contribution won´t do, nor does donating it to charity like Bill Gates does. These millionaires want the government to force them to pay higher taxes. Only by being punished for their wealth can they feel absolved from guilt. Despite Mitt Romney maintaining his wealth through backroom deals, we can agree with him on one thing: he does not need to apologize for his success.

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