Diabetes and CKD - Pitfalls: Estimating GFR

The routine use of estimating equations for GFR has revolutionized the way that we view renal disease over the last 15 years and although some argue that this has lead to overdiagnosis of CKD, I believe that this has been an extremely positive development both in clinical and research terms. One criticism of the MDRD equation in particular was that it did not perform well in patients with near normal GFR and the CKD-Epi equation was introduced, at least in part, because of this limitation. However, there remain concerns that in patients with diabetes, particularly in those with hyperfiltration, this formula still does not perform sufficiently well.

To answer this question researchers in Italy took patients from two clinical trials who had serial measured GFR for up to 8 years and compared the results with simultaneous estimates of GFR using the 14 different equations. Of the 600 patients included, 15% were hyperfiltering and 13% had a reduced GFR. Overall, all but one of the equations underestimated GFR in the group as a whole. The single equation that overestimated GFR (Ibrahim) tended to overestimate at all levels. The range of differences between the mGFR and eGFR was -40 to +20 ml/min/1.73m2 and the mean percent error (MPE) ranged from -28.14 to 0.98%. Not unexpectedly, the majority of the error was related to underestimation of GFR in patients with hyperfilatration (MPE -12.8 to -36.7%). It is notable that the MPE was lowest in participants with hyperfiltration using the CKD-Epi equation. In this group, the mean mGFR was 132 ml/min/1.73m2 while the mean eGFR ranged from 83-114 ml/min/1.73m2.

The bias was far lower for the normofiltration and low GFR groups. Because the authors had longitudinal data also, they were able to look at the ability of the formulas to measure GFR decline over time. Given that all of the equations underestimated GFR at baseline, it is unsurprising that there was systematic underestimation of GFR decline over time, particularly in the patients with hyperfiltration. This was less marked in the patients with CKD at baseline. Five of the equations actually estimated that GFR was increasing in the patients despite a consistent decline in mGFR.

This is all not to say that these formulas are not useful. It is always important to recognize the limitations of your tools and one of the major issues here is that creatinine is used as the marker of kidney function with all of the limitations that this introduces. It should also be said that although the agreement with mGFR might not be great, we know from large EPI studies that an eGFR of less than 60 ml/min/1.73m2 is associated with poorer outcomes and this is true no matter what the cause of the disease. The take home from this is that it is not possible to accurately diagnose hyperfiltration in diabetic patients without over nephropathy using current creatinine-based estimating equations and that other signs should be taken into account when assessing these patients.

(Click on images to enlarge)

Links Aug 30

U.S., Switzerland forge bank settlement deal amid tax probe Reuters

Report sees bleak future for Swiss private banks swissinfo

Wooing The Wealthy Gulf Business News
A focus on Dubai, with insights into general trends in private banking. See also: Private banking changes courting strategy for Asia gulfnews and: UBS Has Relationship With 80% of Asia’s Billionaires Bloomberg

Businesses Increasingly Looking To 'Major' Offshore Centers Tax-News

The bizarre tax loophole that could save Vodafone £24 billion Quartz

India awaiting Mauritius response for tax treaty revision Business Standard

Tax transparency: where do Swedish corporations with operations in developing countries pay taxes? Diakonia / Swedwatch
In a recent report, Swedwatch has examined how four Swedish multinational companies think and act regarding tax payments in Zambia.

Berlusconi masterminded tax evasion plan, Italian court says Reuters

Tax haven sees 86% rise in yuan flows  South China Morning Post
"Luxembourg has become the second-largest country to settle yuan payments in Europe after France, with more and more yuan capital flowing to the tax haven as Chinese firms rush to set up headquarters there."

Bill Black: Zero Prosecutions of Elite Banksters is Too Many for the Wall Street Journal naked capitalism

JPMorgan Bribe Probe Said to Expand in Asia as Spreadsheet Is Found Bloomberg
See also: Damn you, Excel spreadsheets, JP Morgan Chase edition Quartz

Jersey: finance industry is now effectively overseeing the police force

We just blogged (again) about Cyprus as the quintessentially 'captured state' - and now we provide what is perhaps an equally striking example of 'state capture' in the British tax haven of Jersey. Tipped off by Tax Research and the blog of controversial, outspoken Jersey ex-Senator Stuart Syvret, we now see this from Jersey Channel TV a couple of days ago:

"Advocate Jonathan White has been appointed the first chairman of the Jersey Police Authority.

The JPA is responsible for ensuring the police are an effective force.

Advocate White, who is an English solicitor and a Jersey advocate, will be responsible for the oversight of the States of Jersey Police and ensuring they deliver their key aims and objectives.

Advocate White is a former managing partner and group chairman of Ogier. During his time at the firm, Ogier grew from a law firm into an international fiduciary services business with a presence in nine jurisdictions and a staff of 850 people. He retired in 2009. He is currently chairman of both Jersey Finance Ltd and Durrell Wildlife Conservation Trust. In 2011, he was awarded a lifetime achievement award from the Citywealth Magic Circle awards."

Our emphasis added. So, in effect, the police force is going to be overseen by the Jersey tax haven industry. While White was in top positions at Ogier, it should be noted, a number of scandals happened. Such as this one (more here, involving Michael Birt, then attorney general and current Bailiff, also from Ogier).

TJN's director John Christensen, along with co-author Prem Sikka, Austin Mitchell, Philip Morris and Stephen Filling have been talking about state capture in Jersey for many, many years. For instance, their seminal and painstakingly documented 1998 case study No Accounting for Tax Havens noted, among other things:

"Jersey has never had a general election. Its government is captured by big business. . . . It is captured by the finance industry."

Treasure Islands takes this further, drawing on this case study and making comparisons with Delaware, to show exactly the same phenomenon happening in two very different jurisdictions, many miles apart, in different eras. That phenomenon is, of course, state capture, and it's a generic feature of offshore finance - and indeed of any jurisdiction whose financial sector becomes too large.

Appointing the finance industry to oversee the police. You couldn't make it up. One more for the Finance Curse analysis.

Oh, but there's more. From Syvret, who first learned of this through an interview on the local Jersey BBC outlet.

"I rarely listen to the BBC in Jersey, knowing through years of first-hand - and evidenced - experience just how biased and collusive with the local oligarchy the BBC in Jersey is"

State capture again. Finance Curse again. And, regarding that interview:

"The interviewer could have been scripted by States of Jersey spin-doctors. And let’s face it, probably was. For example - this is the BBC - which has in its possession a 94 page interim statement to the Wiltshire police by the unlawfully suspended Police Chief Graham Power. This document contains so many profoundly important issues – and raises so many serious public-interest matters – that it could keep a serious broad-sheet newspaper in detailed stories for months.

I know that the BBC have this document – because it was me who gave it to them, after I obtained it from sources."

And if you want to read that document, take a look here. But for some reason, the Jersey BBC has never touched it. Read Syvret's angry but informative piece. As if any further evidence were needed.

Links Aug 29

Swiss Agree on Program for Banks to Settle U.S. Dispute Bloomberg
See also: U.S. And Swiss Reach Deal On Evaders---More Guilty Pleas Over Offshore Accounts Forbes

Jersey, Bermuda and BVI on new official French tax haven blacklist Les Echos (In French). The blacklist is here. France blacklisted them because they wouldn't satisfactorily comply with French laws.

Pakistan reports big rise in tax revenues as reforms kick in Reuters. This is a big deal, especially in light of this.

Nearly Five Years After the Financial Meltdown, Support for Wall Street Reform Remains Strong Americans for Financial Reform. Public support remains the greatest hope.

Argentina: Where vultures dare Al Jazeera
"Vulture funds" seeking payment from Argentina have won a major court victory, setting a dangerous precedent.

Bangladesh: Transfer pricing law to be enforced from June next The Financial Express

India Drafts Safe Harbor Policy to Reduce Transfer Pricing Disputes India Brief

Russia: Companies may be obliged to provide information on offshore status RAPSI
Offshore centres give ground to onshore: BCG report International Adviser

Isle of Man Signs Tax Agreement With Switzerland Tax-News
Just how much use will this be? And, behind the times - see here and here.

Amazon takes tax fight to Supreme Court Financial Times (paywall)

Executive Excess 2013: Bailed Out, Booted, and Busted Institute for Policy Studies

Shake-up looms in Singapore banking, wealth managers warn Financial Times (paywall)
See also comment on Tax Research UK

Time to end the dangerous shell game The Hill

What really happens when journalists meet Thomson Reuters
"If the Thomson Reuters Foundation advanced finance and governance course were a trending topic on Twitter, the key words would be ‘Tax Havens’, ‘Tax Avoidance’, ‘Multinationals’ and the majestic continent of Africa."

Notenstein Emerges From Dark Shadow of Wegelin Bank The Wall Street Journal

Liechtenstein bank reports US tax deal hits profits France 24 / AP

Quote of the day: Cyprus and state capture

From the New York Times, our quote of the day (in bold), one in an occasional series:

“Whoever controls the Bank of Cyprus controls the island,” said Andreas Marangos, a Limassol lawyer whose clients include many Russians.

We mention this for two reasons. First, the story itself is interesting. The first three paragraphs give the flavour:

"When European leaders engineered a harsh bailout deal for this tiny Mediterranean nation in March, they cheered the end of an economic model fueled by a flood of cash from Russia. Wealthy Russians with money in Cyprus’s sickly banks lost billions.

But the Russians, though badly bruised, are now in a position to get something that has previously eluded even Moscow’s most audacious oligarchs: control of a so-called systemic financial institution in the European Union.

“They wanted to throw out the Russians but in the end, they delivered our main bank to the Russians,” said the Cypriot president, Nicos Anastasiades, in a June interview."

The story isn't quite as simple as these paragraphs suggest, of course: among other things, the "Russian" ownership stake seems to be fairly dispersed, at least at this point. But there's another issue we want to point to, which is the main point of this blog. It's that this provides yet another example of the extreme forms of 'state capture' which we have seen, again and again, in small islands with large financial sectors: tax havens. The NYT story continues:

"Despite its wobbly condition, the Bank of Cyprus still holds a uniquely influential position in the economic and political affairs of a sun-swept nation that sits on potentially large reserves of natural gas and straddles strategic fault lines between East and West.

President Anastasiades, in a June letter to the European Central Bank that pleaded for help to keep the Bank of Cyprus afloat, described it as a “mega-systemic bank” that, if it failed, could bring down the entire Cypriot economy. With 5,700 employees and around half of all the island’s deposits, it dwarfs its rivals and reaches into every corner of the country."

Particularly thanks to David Officer and Yiouli Taki at the University of Nicosia, we already had plenty of information of the "capture" of Cyprus by the offshore financial services sector - see here and here and here. This blog is a reminder, and a confirmation, of one of the most important political-economic phenomena in the modern global economy.

Let's not forget, whoever has this kind of influence will be able to change the laws, to turn Cyprus into whatever kind of tax haven or secrecy jurisdiction that they want.

Much more on this broad issue in Treasure Islands and in our Finance Curse e-book.

IMF paper points to 'no taxation without representation' aspect of Resource Curse

A new Working Paper from the IMF notes in its abstract:

This paper asks whether the availability of higher resource revenue in these countries has led to lower taxation effort of other revenue categories. The question is analyzed both in terms of the relationship between non-resource tax revenue and resource revenue, and between non-resource tax revenue and statutory tax rates. The paper finds evidence suggesting that nonresource revenue is negatively influenced by a higher resource revenue-to-GDP ratio. The lower take up of nonresource taxes in resource-rich countries is correlated with higher levels of corruption in these countries, suggesting weaker institutions affect nonresource revenue through incentives for tax evasion and/or large tax exemptions as argued in the literature.

No great surprise there, but it's always useful to get confirmation of things. In short, wading through the IMF-speak, the researchers have found that countries rich in natural resources tend to see weaker efforts to raise taxes from other sectors, and this lack of tax 'effort' is correlated with greater corruption. This is an important driver for the so-called Resource Curse, a phenomenon that appears surprising on the face of it: countries rich in natural resources often perform worse than their resource-poor peers.

We have long pointed out that there are important links between taxes and representative, accountable government. As a 2008 book on the subject summarises:

"The political importance of taxation extends beyond the raising of revenue. We argue in this book that taxation may play the central (their emphasis) role in building and sustaining the power of states, and shaping their ties to society. The state-building role of taxation can be seen in two principal areas: the rise of a social contract based on bargaining around tax, and the institution-building stimulus provided by the revenue imperative. Progress in the first area may foster representative democracy. Progress in the second area strengthens state capacity. Both have the potential to bolster the legitimacy of the state and enhance accountability between the state and its citizens."

In an article for Tax Justice Focus a while back, Alex Cobham explored some further benefits from taxation, through what he calls the "Four Rs"

• Revenue. Raising money for schools, hospitals, courts etc.
• Redistribution. Spreading the benefits of development more widely.
• Repricing. Tax can change behaviour: high taxes on tobacco, for instance, can discourage its use.
• Representation. It is this fourth "R," of course, that is the key issue of this blog. Taxation strengthens and protects channels of political representation: when citizens are taxed, they demand representation in return from their rulers. Mick Moore's article in that edition of Tax Justice Focus has more .

The 2008 book also mentioned, however, this:

This idea is largely missing from the new scholarship on state-building. It is also largely missing from the practical concerns of those working in the aid community. The lack of attention to the relationship between revenue-raising and governance is surprising, especially given the long-standing linkage between taxation and governance assumed by students of European and American history.

So it's good to see the IMF paper contributing to a still relatively sparse field. Those interested in this general 'no taxation without representation' area are now encouraged to visit this research site. Their core messages are summarised:

"The ways in which governments are funded has very significant impacts on the quality of governance:

Governance is better where governments have to earn their incomes by taxing a wide range of citizens and economic activities. It is worse where governments can rely on large unearned levies on the proceeds of exporting oil, gas and concentrated mineral deposits. These unearned incomes are very significant for the governments of many poor and middle income countries.

Conversely, well-managed taxation systems can play a major role in state-building, by helping create the conditions for relatively negotiated and consensual political settlements between political elites and citizens."

And as for the Resource Curse, the next edition of Tax Justice Focus will contain an article dedicated to this very subject - along with a lot more information about the Finance Curse.

Veil thrown over Argentina's commercial registry

By our Guest Blogger.

Argentina’s Inspección General de Justicia (IGJ), which is in charge (among other things) of the Commercial Registry, has been under severe criticism for obstructing, delaying and even denying requests for public information. Violating relevant laws and regulations on access to information, and basing its case on an (unrelated) law to protect personal data, the IGJ has issued internal regulations requiring those requesting information contained in the Commercial Registry to demonstrate a “legitimate interest” in the information.

The blocking of information by the IGJ has been getting worse in recent years, as news organisations and opposition politicians have demanded information from the Public Registry with regard to companies related to Vice-President Amado Boudou, and to businessman Lazaro Baez, allegedly linked to President Kirchner.

In 2012 National Congress Member Gil Lavedra, after being denied access to the Commercial Registry, filed a summary proceeding (“amparo”) to obtain a court order to access information on Boudou’s companies from the Registry. After a lower Court refused, the Federal Court of Appeals in 2013 finally issued the order, reaffirming that there is no need to invoke or prove a “legitimate interest” to access information from the Registry. This court order, however, applies only to this particular case.

Against this background, an informal academic meeting took place last August 27th at the Law School of the University of Buenos Aires, to discuss the Public Information and the IGJ. Unknown to the panelists, however, the current Head of the IGJ, Luis Rodolfo Tailhade, was present. He is a member of La Campora, the youth and political movement related to Argentina’s President Cristina Fernandez de Kirchner (her son, Maximo Kirchner, chairs the movement). Contrary to the panelists’ view, Mr. Tailhade said that while the IGJ would comply with any court order, he personally agreed with existing IGJ’s internal regulations which demand a legitimate interest. In his opinion, the IGJ already takes care of supervising companies - and, he added, most companies wouldn’t want just anyone looking into their directors’ list of names or company balance sheets.

He was reminded that the very purpose of a “public” registry is to provide information to the public: that is, everyone. This includes not only banks, creditors and businessmen who need to look at a company’s balance sheet to assess its solvency and soundness, but also any regular citizen with regard to matters that relate to public officers and corruption, especially if the Vice-President of the country might be involved. However, many people at the meeting thanked him for attending and speaking openly, which is very unusual for a public officer in the present times.

END

Further background to this is available from Markus Meinzer in 2005, here.