by Jerry Alatalo
he old saying goes that the only things we can be absolutely sure of are death and taxes. Every human being will die one day for certain, although some believe the soul goes on forever, but that’s a topic for another writing. So, at least from the generally held view of death where one stops breathing and all physical/bodily activity stops – yes, death is inescapable. But taxes are another thing altogether according to the men and women over at Tax Justice Network, and what their years of research have revealed is that, for some, taxes are not inescapable. What they’ve found to apply for some people around the Earth is that “the only (singular) thing we can be be sure of is death”.
It’s been some three or four years since the International Consortium of Investigative Journalists (ICIJ) received, then released to the world, computer files on tens of thousands of account-holders using tax haven banks operating in the British Virgin Islands. High-level politicians in several countries became forced to resign, star athletes and famous Hollywood screen idols suffered major public relations scandals, and old money bazillionaires saw their cherished anonymity evaporate. The story went uber-viral and was widely reported in all corners of the planet, and many believed the decades-old, secret tax haven industry was facing a certain death, surely in a short elapsed period when those criminal banks were shuttered and stop all financial activity. You know, when they stopped breathing.
Tax havens are still very much alive and breathing.
Days after ICIJ’s bombshell leak, Britain’s Prime Minister David Cameron and America’s President Barack Obama were giving a press conference after a scheduled meeting. The ICIJ leak had become such a massive global story that it was inevitable the story would come up, and right on camera in front of the world David Cameron spoke about how (paraphrasing) “we are going to eliminate tax evasion!… tax evasion is fundamentally unfair… totally unacceptable!… etc. – and so on…” Old sayings like “death and taxes” hold much truth in them, but David Cameron’s feigned-outrage press statements four years ago relate directly to those old sayings: “talk the talk, but then walk the walk” and “don’t make promises you can’t (or know you won’t) keep”.
Since that bombshell leak four years ago, both developed and developing nations around the Earth have lost trillions of dollars in tax revenue due to the ongoing operations of the tax haven/evasion industry (and it is an industry, facilitated by the world’s most powerful accounting, legal, and banking companies), at the same time suffering the severe economic effects of the now world-recognized term austerity.
“The ability of multinational companies (MNC) to have subsidiaries in many different countries, including in tax havens, create the opportunity for MNCs to shift a lot of profit to those jurisdictions. As you know, whatever can be priced can also be mis-priced. So, as a result a lot of income that could normally be recognized in developing countries ends up being recognized in the tax havens, where the big MNCs have their subsidiaries.”
That statement describes only the tip of the iceberg with regard to the variety of complex, engineered financial products readily available for high-net-worth individuals and corporations wanting to escape “unavoidable, certain-for-all taxes”.
“It’s the sheer unfairness, that if you’re very rich, or if you’re a multinational corporation, you don’t have to pay tax automatically like the rest of us do. But it’s almost become a voluntary activity – you choose to pay. You don’t pay based on your income, based on the profits you make. And that just is felt to be deeply unfair.”
The City of London is the epicenter of the international tax haven industry, where financial engineering takes place resulting in sometimes perfectly legal, sometimes criminal, complex accounting schemes involving banks in British-controlled Cayman Islands, Jersey, British Virgin Islands, and other UK-enabled tax evasion jurisdictions. The Queen’s head/image is on the stamps used by residents in these tax havens, so this corrupt financial industry receives the support of, and is encouraged, at the highest levels of the British government. Perhaps British Prime Minister David Cameron and Queen Elizabeth would conduct a joint public TV address to the people of England and the world, explaining just where the “honorable” process of eliminating “totally unacceptable, fundamentally unfair tax evasion” stands today.
People in nations around the Earth are anxiously anticipating such an address/progress report on tax haven elimination successes, and respectfully ask for more specificity than “we’re working on it”. U.S. Senator and candidate for President of the United States Bernie Sanders of Vermont and Massachusetts Senator Elizabeth Warren have been outspoken on the issue of tax havens and tax evasion. The issue greatly affects Americans and people everywhere in the world, so all candidates for President must – either voluntarily or forced by taxpayers/voters – forthrightly share their opinions and potential solutions.
“The main hope of developing countries have to come out of the economic deprivation, the poverty, the lack of human rights, is to attract technology, attract investments, and to make decisions that are important for their economies. But, if in the process of doing so, developing countries have to give up their fiscal sovereignty, have to give tax concessions to MNCs to locate there, have to agree to coercive corporations and tax treaties, then it is not fair to the developing countries. And that’s why tax justice matters.”
“In the UK and Europe, especially, we’ve been facing years of austerity politics. We’ve seen our public services cut, and al because, as they repeatedly tell us, ‘there is no money’. But clearly, it’s just that companies are choosing not to pay tax, and governments are not doing enough to collect it.”
“The next big threat comes from tax wars. That is, the political pressure to compete on tax and regulation. The risk here is that of a global race to the bottom, which will destroy democracy.”
Join the global movement for tax justice at: www.taxjustice.net
(Thank you to Tax Justice Network at YouTube)