Saturday, October 22, 2011

$9.4 trillion squirreled (UNTAXED) in banks in Luxembourg, Singapore and Virgin Islands

By Doug Saunders, Globe and Mail, Ocober 15, 2011
The monitoring group Global Financial Integrity estimates that people and companies are stashing away $9.4-trillion in secret offshore banks in places such as Luxembourg, Singapore and the Virgin Islands to avoid paying taxes on it. That’s $2-trillion more than all the money held in all the banks in the United States. Taxed at 11 per cent (a fraction of what’s actually owed on it), this would yield an instant trillion.

At a time when ordinary people are being asked to bear heavier burdens and lose vital government services in order to pay for rescuing the economy, it’s unconscionable that large sums go untaxed. It’s particularly galling that most of this money is held by extremely wealthy people who are taxed, legally, at lower rates than those who struggle to feed their families. As Congress revealed this week, there are 94,000 people with earnings over $1-million a year who pay lower tax rates than their secretaries.
The non-payment of tax has become a chronic problem around the world, and is one of the root problems behind the crisis. We tend to think of Greece, which indeed has a chronic inability to collect any tax from its citizens. But citizens of wealthy Germany and Britain hide sums from the taxman that dwarf the entire Greek economy.
We know that, because both countries are in the midst of court cases against Swiss banks that, through leaked documents, they learned are holding the untaxed earnings of at least 6,000 Britons and many more Germans. The case will earn the governments billions in taxes at an embarrassingly low rate, in exchange for total anonymity for the guilty parties. But it represents only a handful of banks in one of many large-scale tax-shelter countries.
This piece of information is not only astounding; it is, in fact, criminal. Do those countries from which billions, if not trillions, of tax dollars are being withheld have to sue the banks in Switzerland, Singapore, Luxembourg and Virgin Islands to retrieve this money? It appears so. If Mr. Saunders is right, and there is no evidence he is not, then we ought not to be facing a second double-dip depression, but rather a tsunami of law suits against these states whose laws permit the travesty of hiding income from tax collectors and the governments of the western countries whose corporations and citizens are guilty of hiding their money must step up to the plate, and inaugurate laws permitting their revenue departments to collect from these "safe regimes" where this money is being held in secret.
The safety is apparently provided by the immunity cover of the host countries who have an obvious interest in protecting their "rich benefactors". If economics is an imperfect, and even questionable, science, then all the headlines of poverty, and failed development, and now failing economies in what we have considered relatively "rich" countries for at least the last half century, then anonymity protected and preserved by these tax havens can and must no longer be tolerated.
If there are at least 6,000 Britons who are holding their own country hostage to this secret, self-interested "greed," then a similar ratio of citizens to national population from the U.S., Canada, France, Germany, and most members of the European Union are also guilty of holding their own countries hostage to this "deceit" if it is not outright fraud. And the spineless political legislators of the G-20 have to find some courage in collectivity to summon the political will to write and pass laws that would clearly be anathema to these squirrels, who have been hoarding their "nuts" (read dividends, coupons, stocks, bonds etc.) in safe banks under the protection of their national governments.
All efforts to bring this white-collar deception to light must continue until every last squirreled dollar has been removed from tax-haven bank accounts, and appropriately taxed.
(And this, too from Mr. Saunders' piece cited above:
This isn’t just a problem for wealthy countries; in fact, it’s probably the biggest problem in the developing world. As Anatol Lieven observes in Pakistan: A Hard Country, “barely 1 per cent of the population pays income tax, and the wealthiest landowners pay no direct taxes at all.” As a Peshawar tax auditor told him, “If anyone took taxes seriously, I’d have the most difficult job in the world, but as it is I have the easiest.” And Pakistan, from what I’ve seen, is far from exceptional.

Poor countries, according to Global Financial Integrity, lose more than $1-trillion in tax revenues a year to tax-free offshore banks. That’s about 10 times the world’s foreign aid combined, and four or five times the annual sum that some believe would end poverty completely.
Talk about the people of the western world walking around like zombies in unconsciousness! Denied access to the magnitude of the information, (and who knows what else we know little or nothing about) we are complicit in our own outrage, and the people who are at this moment sitting, lying, lounging under tarps, tents, sleeping bags, in cities around the world are our best hope for creating the conditions that will bring these inequities to light. So, we all need to find the time, the few dollars and the courage to go buy some food, coffee, etc. and deliver it to those courageous few in order to keep the OCCUPY TOGETHER movement growing.

Pakistan’s problem and ours are the same, and they lie at the root of the crisis. We need an international army of tax collectors, a coalition of the willing on the revenue front. And they should have powerful weapons.

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