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Debates Forum

  1. 21 Jun '11 16:32
    A letter in this morning's Times (I can't paste the link, as the paper is subscriber-access only):

    In Germany after the Second World War, a victim (ie, payer) of bribery was not only allowed but was given an incentive to report it, as paying bribes was not only legal but also tax-deductible. This made accepting bribes unacceptably risky to even the most corrupt officials (of which there were plenty after 12 years of fascism). Today Germany is one of the least corrupt countries in the world.

    Do posters agree with the writer that corruption could be tackled, paradoxically, by legalisation?
  2. 21 Jun '11 16:40
    It's an interesting idea. I think it would also be nice if whistleblowers were encouraged more, say by giving them a share of the size of corporate fraud, e.g. if someone reports a 500 million fraud, pay them 5 million. That should lower corporate corruption by quite a bit.
  3. Standard member sh76
    Civis Americanus Sum
    21 Jun '11 16:42 / 1 edit
    Originally posted by Teinosuke
    A letter in this morning's Times (I can't paste the link, as the paper is subscriber-access only):

    In Germany after the Second World War, a victim (ie, payer) of bribery was not only allowed but was given an incentive to report it, as paying bribes was not only legal but also tax-deductible. This made accepting bribes unacceptably risky to even the m ...[text shortened]... rs agree with the writer that corruption could be tackled, paradoxically, by legalisation?
    I don't quite understand. Does that mean that it was a crime to accept a bribe but not a crime to pay it?
  4. 21 Jun '11 16:45
    Originally posted by sh76
    I don't quite understand. Does that mean that it was a crime to accept a bribe but not a crime to pay it?
    yes
  5. Standard member Palynka
    Upward Spiral
    21 Jun '11 16:47
    How would you deduct taxes without proof of payment? Or, alternatively, why would the corrupt official provide proof of payment?
  6. Standard member sh76
    Civis Americanus Sum
    21 Jun '11 16:47
    Originally posted by KazetNagorra
    yes
    So the giver has an incentive to offer and give the bribe (as a tax deductible business expense that could potentially give an excellent return on investment) while the recipient has committed a crime?

    That's kind of like criminalizing the Johns that patronize prostitutes but making prostitution legal for the Janes.
  7. Standard member sh76
    Civis Americanus Sum
    21 Jun '11 16:48
    Originally posted by Palynka
    How would you deduct taxes without proof of payment? Or, alternatively, why would the corrupt official provide proof of payment?
    I guess a cancelled check would do (perhaps with the word "BRIBE" on the memo line?); though the whole thing sounds odd to me.
  8. 21 Jun '11 17:08 / 2 edits
    Originally posted by sh76
    So the giver has an incentive to offer and give the bribe (as a tax deductible business expense that could potentially give an excellent return on investment) while the recipient has committed a crime?

    The giver can only deduct the tax, of course, if he denounces the official who accepted the bribe. This means that bribery is unlikely to occur at all, since if the official fears denuniciation, he won't accept the bribe in the first place.

    That's kind of like criminalizing the Johns that patronize prostitutes but making prostitution legal for the Janes.

    That is precisely what happens in Sweden, Norway and Iceland, where paying for sex is illegal, but not selling sex, so the client of a prostitute has committed a crime, but not the prostitute herself.
  9. 21 Jun '11 17:10
    Originally posted by Palynka
    How would you deduct taxes without proof of payment? Or, alternatively, why would the corrupt official provide proof of payment?
    Well, if there's sometimes sufficient proof to convict someone of illegally accepting bribes, then presumably there will also sometimes be proof that someone has legally accepted a bribe.
  10. 22 Jun '11 08:15 / 1 edit
    Originally posted by Palynka
    How would you deduct taxes without proof of payment? Or, alternatively, why would the corrupt official provide proof of payment?
    Bribes, especially large ones, often go through traceable channels.
    In Zambia, many of the corruption cases were based on payments made out of government bank accounts.

    The system described in this thread would not have worked in many of the cases in Zambia as the 'giver' was government officials using government money and thus there was no incentive to claim tax deductions.

    Also the other areas where there is a lot of corruption in Zambia involve avoiding taxes eg customs, and so reporting it would result in the giver of the bribe having to pay the tax that they were trying to avoid (and possibly admitting to tax evasion and being found guilty of that).
  11. 23 Jun '11 08:51
    Originally posted by twhitehead
    Bribes, especially large ones, often go through traceable channels.
    In Zambia, many of the corruption cases were based on payments made out of government bank accounts.

    The system described in this thread would not have worked in many of the cases in Zambia as the 'giver' was government officials using government money and thus there was no incentive ...[text shortened]... y were trying to avoid (and possibly admitting to tax evasion and being found guilty of that).
    That indeed sounds like a case where the solution I proposed wouldn't work, alas.

    Interestingly, the situation in Germany has subsequently evolved, as the second half of the letter I quoted suggests:

    More recently, it became clear that not only "harassment" bribery but corporate bribery needed addressing. The problem here is that the bribes are so large that the payee need never solicit another bribe in his or her life, while the corporate payer is free to continue corrupting further officials. Since harassment bribery has now become entirely foreign to German culture, so paying bribes is again being made illegal in Germany.

    The writer went on to suggest that in developing countries such as India, where both harassment bribery and corporate bribery are a problem, it would be reasonable for paying bribes to remain illegal beyond a certain value.
  12. 23 Jun '11 09:38
    Almost all bribery that I am aware of here in Africa, involves someone doing something they shouldn't. Reporting that bribe would result in the payer not benefiting. I can't think of any case in which the tax incentives would be worth reporting the bribe.

    Can you give me an example of bribery in which the payer can make it public and still keep whatever it was they paid the bribe for?
  13. Donation rwingett
    Ming the Merciless
    23 Jun '11 10:19
    http://blogs.worldbank.org/publicsphere/paying-zero-public-services

    5th Pillar has begun issuing 'zero' rupee notes in India to help combat corruption. It appears to be quite successful.