Can regulators catch up with offshore shelters?
Multinational corporations and super-rich individuals routinely move large sums around the world to take advantage of tax havens that allow them to legally avoid paying billions in taxes to their home countries. The devices employed to park funds in these havens include multiple subsidiaries, shell corporations and corporate “inversions” – a maneuver in which a corporation merges with a company in a lower-tax jurisdiction and moves the corporate headquarters to that country. Current tax laws are ill-equipped to cope with a globalized, digital economy in which valuable assets such as intellectual property are easy to transfer on paper, some experts say. The U.S. tax law enacted in late 2017 will require U.S. corporations to bring home money held overseas – but at a substantially reduced tax rate.
Among the key takeaways:
Nearly three-quarters of Fortune 500 companies maintained subsidiaries in offshore tax havens in 2016, at a total cost of $752 billion in lost U.S. taxes. The Netherlands was the most popular tax haven.
Companies and individuals will take advantage of tax havens as long as some countries are willing to offer them, and curbing the practice requires international cooperation, experts say.
Tax havens can play a beneficial role, say some analysts, especially in protecting companies or wealthy individuals in countries ruled by corrupt or oppressive governments.
For many years, the legendary rock group U2 and its iconic frontman Bono have waged high-profile campaigns for a host of causes ranging from African debt relief to global anti-poverty efforts and corporate social responsibility.1
So it did not sit well with a number of development groups and politicians when the band moved part of its business to the Netherlands, a tax haven, from its home country of Ireland in 2006 after the Irish government capped tax-free income for artists.2
Bono – whose personal net worth has been estimated at $700 million – responded to the criticism by saying, in effect, that the band was merely taking what the taxman offered.3 “It is just some smart people we have working for us trying to be sensible about the way we are taxed,” he told Sky News in 2015. “We pay a fortune in tax, a fortune, just so people know, and we’re happy to pay a fortune in tax.”4
Bono is not alone. Ultra-rich individuals and multinational corporations, including Apple Inc. and Microsoft Corp., have for years shifted profits around the globe to tax havens: countries offering loopholes, lower tax rates, anonymity and lax residency rules. Places such as Bermuda and the Cayman Islands provide a vehicle to avoid billions in tax payments while depriving the taxpayers’ home countries of revenue, including an estimated $100 billion annually in the United States.5
Advocates of tighter tax regulations argue the lost revenue could be spent on social programs such as health care and food stamps. Supporters of the existing system say tax havens are useful in creating competition for repressive countries with government-controlled banking systems and that tax-loss estimates for the United States are overblown.
U.S. and global enforcers are not equipped to prevent systematic avoidance by the super-rich and large corporations, who spend billions on armies of lawyers and accountants to seek out loopholes and schemes that help them keep more of their profits out of government hands, according to experts such as Gabriel Zucman, an assistant professor of economics at the University of California, Berkeley.
Efforts at reform merely fuel a whack-a-mole system, with new restrictions in one country offering an opportunity for another to draw wealth to its shores. U.S. tax laws may not reflect the realities of a globalized, digital economy. The growth of companies, particularly in high-tech and pharmaceuticals, that deal in intangible assets such as intellectual property or digital goods makes it easier to shift profits – and taxes – to overseas subsidiaries in low-tax countries, says Eric Toder, co-director of the Tax Policy Center, a joint venture of two Washington think tanks, the Brookings Institution and the Urban Institute.
“These corporations aren’t behaving illegally, but that doesn’t mean it makes sense,” says Michelle Surka, a tax and budget advocate at the U.S. Public Interest Research Group (PIRG), a Boston-based consumer advocacy group. “If a company taps into our educated workforce, infrastructure and marketplace to research, develop, produce and sell its products, and does almost no business in a tax-haven country, that company should owe their taxes here in the U.S.”
By a wide margin, the public agrees. More than 60 percent of U.S. adults surveyed by Gallup in April 2017 said corporations and upper-income people pay too little in taxes.6
Tax avoidance is not necessarily bad for the U.S. economy, for instance when foreign-based firms use the proceeds to build factories and invest in the United States, says Chris Edwards, director of tax policy studies at the Cato Institute, a Washington think tank that favors limited government and free markets.
“Most universities keep money in offshore tax havens perfectly legally,” he says. “If a university is well funded, it can provide a better education.”
Tax havens also serve to help wealthy residents of oppressive regimes, he says. “It’s not that they want to cheat on their taxes, it’s that they’re worried the government will expropriate them,” Edwards says. For example, Caribbean tax havens, as well as the United States, have been safe places for the wealthy living in corrupt Latin American countries to keep their money, he says.
The new U.S. tax law enacted in December 2017 dealt with the issue through a mandatory provision requiring U.S. corporations to bring their overseas money home over eight years. They are offered a one-time reduced tax rate of 8 percent on “illiquid” – hard-to-sell – assets and 15.5 percent for cash and cash equivalents. The law also shifted the United States to a so-called territorial system in which the profits of U.S. corporations will be taxed by the country where the profits are made. The United States previously collected corporate taxes from all U.S. companies at a rate of 35 percent, even if the money was made overseas.7
Apple announced in January that it would repatriate about $38 billion in tax payments in response to the new law. The company also said it plans to create 20,000 jobs and contribute $350 billion to the U.S. economy in the next five years.8
How It Works
Wealthy individuals can legally avoid taxes by setting up shell corporations – entities without significant business operations or assets – and trusts in tax-haven countries and moving their assets there. These services are typically reserved for people with a lot of assets to invest, something out of reach for the average U.S. investor. The wealthy can get out of paying taxes on so-called passive income, such as capital gains and dividends, by not reporting this income earned overseas.
Before the latest tax law changes, corporations could avoid paying taxes on foreign profits until they are brought home. Companies could set up multiple subsidiaries or shell companies with few employees or operations in tax havens and park their profits there. Under the new law, corporations will be able to bring their profits home one time at a reduced rate. Still, they will be required to pay a new annual minimum tax on profits from intangible assets such as patents, copyrights and trademarks from their foreign subsidiaries in low-tax countries.
Companies could also reduce their tax bill by a so-called corporate inversion: when a U.S. multinational corporation merges with a foreign corporation and moves its headquarters overseas, typically to a low-tax country, allowing the combined company to reduce its tax bill. The new tax law includes rules that limit the ability of U.S. companies to invert and imposes a punitive tax on the foreign assets of companies that do so.
The Treasury Department during the Obama administration responded to an uptick in inversions in 2016 by issuing temporary rules limiting them.9 That year, it also issued rules cracking down on so-called “earnings stripping,” a way for multinational companies to minimize U.S. taxes by paying deductible interest to the new foreign parent or one of its foreign affiliates in a low-tax country.10
“A loophole in our tax laws makes this totally legal – and I think that’s totally wrong,” President Barack Obama said in a 2014 weekly address.11 “You don’t get to pick which rules you play by, or which tax rate you pay, and neither should these companies.”
A U.S. district court in September 2017 ruled the Obama administration had acted unlawfully by curbing inversions.12
A History of Havens
The seeds of tax havens were planted in Switzerland in 1713 when the Great Council of Geneva passed the first known rules limiting the ability of bankers to share information about their clients.13 A century later, Switzerland established its neutrality at the Congress of Vienna in 1815, marking itself as a safe harbor for the wealthy to hide their funds. Swiss banks became more popular in the 1920s, when many European countries raised tax rates to repay debts incurred during World War I, prompting the rich to find ways to shield their money.14
After World War II, the United Kingdom encouraged its overseas territories, including Bermuda and the British Virgin Islands, to develop their financial sectors as an alternative to offering them subsidies.
Today, the use of tax havens has become widespread. In 2016, 73 percent of Fortune 500 companies had subsidiaries in offshore tax havens, mainly the Netherlands, amounting to $2.6 trillion in profits held overseas and resulting in avoidance of $752 billion in U.S. taxes, according to an October 2017 report released by U.S. PIRG and the Institute on Taxation and Economic Policy, a Washington-based research organization.15
Four U.S. companies accounted for 25 percent of the offshore cash, the report said. Apple booked $246 billion, more than any other company. Pfizer Inc., the world’s largest drugmaker, held $199 billion in profit offshore. Microsoft’s stash totaled $142 billion and General Electric Co.’s $82 billion.16
“Every dollar in taxes that corporations avoid must be balanced by higher taxes on individuals, less public investments and services and more federal debt,” the report said.
The Netherlands is the most popular tax haven among the Fortune 500, with more than half of the companies reporting at least one subsidiary there, according to the report. The country offers a tax loophole in the form of a limited partnership in which the individual partners are responsible for paying taxes, rather than the partnership as a whole. When a U.S. corporation is one of the partners, the Netherlands assumes the partner’s profits are taxed in the United States, while U.S. tax authorities view the Dutch partnership itself as a taxable entity. This leaves no one paying taxes. Companies including Starbucks, Tesla and Federal Express have taken advantage of this.17
And there is no sign that the practice is tapering off, Zucman, the Berkeley economist, wrote in a 2014 paper. About 20 percent of all U.S. corporate profits are booked in tax havens, a tenfold increase since the 1980s, he wrote.18
“The main obstacle to current enforcement is that multinational companies spend billions in designing their tax avoidance strategies, while tax authorities have very limited resources – and sometimes shrinking resources, as in the U.S. – to challenge them,” says Zucman, author of a 2015 book, “The Hidden Wealth of Nations: The Scourge of Tax Havens.”
He suggests reducing tax avoidance by allocating corporate global profits proportionally according to where companies make their sales. “While Apple can send its profits to Bermuda, it cannot send its customers to Bermuda,” Zucman says.
The U.S. government could move to a tax system where taxes do not depend on the location of profits, says Alan Viard, a resident scholar specializing in federal tax and budget policy at the American Enterprise Institute, a conservative Washington think tank.
“Another way would be to eliminate the corporate income tax and to instead impose heavier taxes on shareholders on their dividends and capital gains, based on where the shareholder lives rather than where the corporation ostensibly earns its income,” Viard says.
Still, the United States has one of the highest rates of tax compliance in the world, says James Hines, a professor at the University of Michigan law school. “The rich make interesting stories, but most noncompliance involves people who are paid in cash – people who cut lawns and babysitters,” he says.
U.S. tax laws should be updated to reflect today’s digital economy, says Matt Gardner, a senior fellow at the Institute on Taxation and Economic Policy.
“A lot of the income of businesses and individuals is intangible,” he says. “Patents and copyrights are forms of property that are pretty easy to move around on paper, and in many cases our tax laws simply aren’t equipped to recognize that reality.”
Efforts by Regulators
Apple came under fire in 2013 when a U.S. Senate subcommittee inquiry showed the tech giant had avoided tens of billions of dollars in taxes by moving profits to Irish subsidiaries that the panel called “ghost companies.”19
“Apple has sought the holy grail of tax avoidance: offshore corporations that it argues are not, for tax purposes, resident anywhere in any nation,” the chairman of the subcommittee, Sen. Carl Levin, D-Mich., said at a 2013 hearing on the issue.20
Apple CEO Tim Cook indignantly rejected the accusation. “We pay all the taxes we owe – every single dollar,” Cook said in his testimony before the panel, “We don’t stash money on some Caribbean island.”
But in 2014, when Ireland acted to limit the provision that Apple had exploited, the company did move its Irish subsidiaries to an island: Jersey, in the English Channel, which does not tax corporate income.21
The new U.S. tax law’s switch to a territorial system could encourage the use of tax havens, according to critics of the law.22
In recent years, a series of leaked documents from firms helping wealthy clients hide assets overseas has drawn widespread media attention. In 2016, a trove of 11.5 million documents called the Panama Papers that were leaked to German reporters exposed how Panamanian law firm Mossack Fonseca set up anonymous shell companies for clients.
Similarly, the 2017 leak of the so-called Paradise Papers, more than 13.4 million documents from Bermudan law firm Appleby, showed the offshore financial dealings of hundreds of celebrities, politicians and wealthy individuals, such as U.S. Commerce Secretary Wilbur Ross, Queen Elizabeth II and Bono.23 The papers also outlined the maneuvers of companies including Apple, Nike and Glencore, a global mining company.24
European authorities have made the most strides in reining in tax avoidance through the use of havens. Among the most active is the Organisation for Economic Co-operation and Development (OECD), a Paris-based group of 35 member nations that sets standards for transparency and exchange of information and maintains a list of uncooperative countries.
The European Commission, the governing body of the European Union, in December released a blacklist of 17 countries, including Panama and Namibia, that fail to meet agreed tax good-governance standards, the agency said in a news release.25 In its response to the release of the Paradise Papers, the agency said it also garnered commitments from 47 countries to address deficiencies in their tax systems.
“We must intensify the pressure on listed countries to change their ways,” Pierre Moscovici, the commission’s top official for economic and financial affairs, taxation and customs, said. “Blacklisted jurisdictions must face consequences in the form of dissuasive sanctions, while those that have made commitments must follow up on them quickly and credibly.”26
Still, such efforts will likely fall flat, says Gardner of the Institute on Taxation and Economic Policy.
“This is an international system that is only as strong as its weakest link,” he says. “As long as there are countries that are willing accomplices to tax evasion, it will be hard for any country to effectively stamp it out.”
And for a testimonial to the appeal of such a policy, look no further than Bono, who called his Irish critics hypocrites because they ignored the fact that Ireland itself had attracted foreign businesses through low taxes.
“I can understand how people outside the country wouldn’t understand how Ireland got to its prosperity but everybody in Ireland knows that there are some very clever people in the Government and in the Revenue who created a financial architecture that prospered the entire nation,” the rocker told the Irish Times in 2009.27
“It was a way of attracting people to this country who wouldn’t normally do business here,” he said. “And the financial services brought billions of dollars every year directly to the exchequer.”28
|19th–20th Centuries||Havens are created as tax rates rise.|
|1815||Switzerland’s neutrality is established at the Congress of Vienna, making the conflict-free nation an appealing and safe place for the wealthy to store their money.|
|1880s–1890s||New Jersey and Delaware relax incorporation laws to attract businesses.|
|1920s–1930s||Switzerland’s neighbor Liechtenstein emerges as a tax haven, passing a law eliminating restrictions on the nationality of shareholders of the country’s companies.… Panama begins allowing non-residents to create tax-free, anonymous companies.|
|1929||The United Kingdom becomes a tax haven after a British ruling in Egyptian Delta Land and Investment Co. Ltd. v. Todd allows for the company registered in the United Kingdom to avoid paying taxes because it did not have activities there.|
|1934||The Swiss Federal Banking Act criminalizes the disclosure of a bank customer’s identity to a foreign government, establishing Switzerland as a tax haven.|
|1960s–1990s||Rising taxes in the 1960s lead to the creation of modern-day tax havens, including the Cayman Islands and Singapore.|
|1997||The European Union (EU) agrees to a code of conduct on business taxation to eliminate harmful tax competition among member states and their territories.|
|2000–Present||Governments seek to curb tax havens amid disclosures.|
|2000||The Organisation for Economic Co-operation and Development publishes a blacklist of 35 countries and sets standards for transparency and exchange of information.|
|2009||Leaders of the Group of 20 – the nations with the largest economies – reach an agreement to crack down on tax havens and threaten sanctions for countries that fail to cooperate.|
|2013||Apple Inc. CEO Tim Cook testifies before a U.S. Senate subcommittee; its leaders chastise the company after an inquiry by the panel showed Apple used offshore entities, including three foreign subsidiaries, to avoid paying billions of dollars in U.S. income taxes.|
|2016||The release of the Panama Papers, a trove of 11.5 million documents leaked to German reporters, shows how Panamanian law firm Mossack Fonseca set up anonymous shell companies to help clients hide wealth.|
|2017||The EU publishes a blacklist of 17 tax-haven countries the EU’s finance ministers consider non-cooperative on tax matters.… The release of the Paradise Papers, a collection of more than 13.4 million documents from Bermudan law firm Appleby, exposes the offshore financial affairs of hundreds of celebrities, politicians and wealthy individuals.… The U.S. Congress approves a tax reform law that lowers the corporate income tax rate to 21 percent from 35 percent and includes a repatriation provision allowing companies to bring back foreign profits at a reduced rate.|
|2018||Apple announces it will repatriate about $38 billion in tax payments in response to the new tax law. The iPhone maker also says it plans to create 20,000 jobs and contribute $350 billion to the U.S. economy in the next five years (January).|
Resources for Further Study
Murphy, Richard, “Dirty Secrets: How Tax Havens Destroy the Economy,” Verso, 2017. An accountant from the United Kingdom offers ways to regulate tax havens in response to the disclosure of the Panama Papers, a trove of more than 11.5 documents with secret records of offshore companies.
Obermayer, Bastian, and Frederik Obermaier, “The Panama Papers: Breaking the Story of How the Rich and Powerful Hide Their Money,” Oneworld, 2017. German investigative journalists detail how an anonymous whistleblower led them to the Panama Papers.
Rostain, Tanina, and Milton C. Regan Jr., “Confidence Games: Lawyers, Accountants, and the Tax Shelter Industry,” MIT Press, 2016. Two professors at Georgetown University Law School explain how some of the most prominent U.S. law and accounting firms created and marketed products to help the very rich avoid paying their share of taxes by claiming benefits not recognized by law.
Zucman, Gabriel, “The Hidden Wealth of Nations: The Scourge of Tax Havens,” University of Chicago Press, 2015. An assistant professor of economics at the University of California, Berkeley, argues tax havens are a growing danger to the global economy.
Campbell Fernàndez, Alexia, “The Cost of Corporate Tax Avoidance,” The Atlantic, April 14, 2016, http://tinyurl.com/
Drucker, Jesse, and Simon Bowers, “After a Tax Crackdown, Apple Found a New Shelter for Its Profits,” The New York Times, Nov. 6, 2017, http://tinyurl.com/
Schnurer, Eric, “A Hard Exit for the Rich,” U.S. News & World Report, Nov. 21, 2017, https://tinyurl.com/
Zucman, Gabriel, “How Corporations and the Wealthy Avoid Taxes (and How to Stop Them),” The New York Times, Nov. 10, 2017, https://tinyurl.com/
Reports and Studies
“Broken at the Top: How America’s dysfunctional tax system costs billion in corporate tax dodging,” Oxfam America, April 14, 2016, https://tinyurl.com/
Alstadsæter, Annette, Niels Johannesen and Gabriel Zucman, “Tax Evasion and Inequality,” National Bureau of Economic Research, Dec. 29, 2017, https://tinyurl.com/
Gravelle, Jane G., “Tax Havens: International Tax Avoidance and Evasion,” Congressional Research Service, Jan. 15, 2015, https://tinyurl.com/
Phillips, Richard, et al., “Offshore Shell Games 2017: The Use of Offshore Tax Havens by Fortune 500 Companies,” Institute on Taxation and Economic Policy and U.S. PIRG Education Fund, Oct. 2017, https://tinyurl.com/
Toder, Eric, and Alan D. Viard, “A Proposal to Reform the Taxation of Corporate Income,” Tax Policy Center, June 2016, https://tinyurl.com/
The Next Step
“HMRC ‘Hit by Brexit and Paradise Papers,’” BBC News, Jan. 11, 2018, https://tinyurl.com/
Forsythe, Michael, “Paradise Papers Shine Light on Where the Elite Keep Their Money,” The New York Times, Nov. 5, 2017, https://tinyurl.com/
Pegg, David, “Paradise Papers firm worked for bank linked to terrorist financing and organized crime,” The Guardian, Jan. 23, 2018, http://tinyurl.com/
“The U.S. Is Becoming the World’s New Tax Haven,” Bloomberg View, Dec. 28, 2017, https://tinyurl.com/
Scharfenberg, David, “Trillions of dollars have sloshed into offshore tax havens. Here’s how to get it back,” The Boston Globe, Jan. 20, 2018, https://tinyurl.com/
Smith-Meyer, Bjarke, “8 countries removed from EU tax haven blacklist, sparking criticism,” Politico, Jan. 23, 2018, https://tinyurl.com/
Americans for Tax Fairness
1101 17th St., N.W., Suite 301, Washington, DC 20036
Advocacy group that supports progressive tax reform.
1000 Massachusetts Ave., N.W., Washington, DC 20001
Research and advocacy group that favors limited government and free markets.
European Commission Taxation and Customs Union
+32 2 299 96 96
The European Commission agency that released a blacklist of 17 tax-haven countries.
Institute on Taxation and Economic Policy
1616 P St., N.W., Suite 200, Washington, DC 20036
Nonpartisan research group that analyzes federal, state and local tax policies.
Internal Revenue Service
1111 Constitution Ave., N.W., Washington, DC 20224
Federal agency responsible for collecting U.S. taxes.
Organisation for Economic Co-operation and Development
2, rue André Pascal, 75775 Paris Cedex 16, France
+33 1 45 24 82 00
Intergovernmental economic organization with 35 member countries tackling offshore tax evasion.
Tax Justice Network
38 Stanley Ave., Chesham, Bucks, HP5 2JG, United Kingdom
Advocacy group that researches and analyzes international taxes and the effects of tax havens, evasion and avoidance.
U.S. Department of the Treasury
1500 Pennsylvania Ave., N.W., Washington, DC 20220
Federal department responsible for enforcing U.S. tax laws.
1. Alan McPherson, “U2’s Activism: From Innocence to Experience,” The Globalist, July 25, 2015, http://tinyurl.com/
2. Brian Boyd, “Bono ‘hurt’ by criticism of U2 move to Netherlands to cut tax,” The Irish Times, Feb. 27, 2009, https://tinyurl.com/
3. Marilyn Zelinsky-Syarto, “Bono’s net worth is $700 million,” Bankrate, May 9, 2017, http://tinyurl.com/
4. Greg Milam, “U2 Hit Back At Criticism Over Tax Havens,” Sky News, May 15, 2015, https://tinyurl.com/
5. Kimberly Clausing, “Commentary: How the GOP’s Tax Plan Puts Other Countries Before America,” Fortune, Nov. 20, 2017, https://tinyurl.com/
6. Frank Newport, “Majority Say Wealthy Americans, Corporations Taxed Too Little,” Gallup, April 18, 2017, https://tinyurl.com/
7. “What’s in the final Republican tax bill,” Reuters, Dec. 19, 2017, http://tinyurl.com/
8. “Apple accelerates US investment and job creation,” news release, Apple Inc., Jan. 17, 2018, https://tinyurl.com/
9. “Fact Sheet: Treasury Issues Inversion Regulations and Proposed Earnings Stripping Regulations,” Treasury Department, April 4, 2016, https://tinyurl.com/
10. “Fact Sheet: Treasury Issues Final Earnings Stripping Regulations,” Treasury Department, Oct. 13, 2016, https://tinyurl.com/
11. “Weekly Address: Closing Corporate Tax Loopholes,” The White House, July 26, 2014, https://tinyurl.com/
12. “U.S. court strikes down Obama-era rule on tax inversions,” Reuters, Sept. 29, 2017, https://tinyurl.com/
13. Tim Harford, “How much of the world’s wealth is hidden offshore?” BBC News, July 31, 2017, https://tinyurl.com/
 Richard Phillips, et al., “Offshore Shell Games 2017: The Use of Offshore Tax Havens by Fortune 500 Companies,” report, U.S. Public Interest Research Group Education Fund and the Institute on Taxation and Economic Policy, Oct. 2017, https://tinyurl.com/
15. Richard Phillips, et al., “Offshore Shell Games 2017: The Use of Offshore Tax Havens by Fortune 500 Companies,” report, U.S. Public Interest Research Group Education Fund and the Institute on Taxation and Economic Policy, Oct. 2017, https://tinyurl.com/
17. Frederik Obermaier and Ralf Wiegand, “Bermuda? The Cayman Islands? Nope, the Netherlands!” Süddeutsche Zeitung, Nov. 7, 2017, https://tinyurl.com/
18. Gabriel Zucman, “Taxing across Borders: Tracking Personal Wealth and Corporate Profits,” Journal of Economic Perspectives, Fall 2014, https://tinyurl.com/
19. Jesse Drucker and Simon Bowers, “After a Tax Crackdown, Apple Found a New Shelter for Its Profits,” The New York Times, Nov. 6, 2017, https://tinyurl.com/
 Alexandra Thornton and Seth Hanlon, “A Territorial Corporate Tax Would Reward Corporate Tax Avoidance and Could Encourage Offshoring,” Center for American Progress, Sept. 22, 2017, http://tinyurl.com/
22. Alexandra Thornton and Seth Hanlon, “A Territorial Corporate Tax Would Reward Corporate Tax Avoidance and Could Encourage Offshoring,” Center for American Progress, Sept. 22, 2017, http://tinyurl.com/
23. Aimee Picchi, “Paradise Papers: Names of the rich linked to offshore accounts,” CBS MoneyWatch, Nov. 6, 2017, https://tinyurl.com/
25. “Fair Taxation: EU publishes list of non-cooperative tax jurisdictions,” news release, European Commission, Dec. 5, 2017, https://tinyurl.com/
 Boyd, op. cit.
27. Boyd, op. cit.