Friday, April 15, 2016

Tax evasion needs international resources, muscle and collaboration....could this be the needed tipping point?

According to Oxfam's analysis of the companies regulatory filings and other publicly available documents:
  • Apple has $181 billion stranded in foreign subsidiaries.
  • General Electric has $119 billion.
  • Microsoft has $108 billion.
  • Drug company Pfizer has $74 billion.
  • IBM has $61 billion.
  • Merck has $60 billion.
  • Consumer products giant Johnson & Johnson has $53 billion.
  • Google-owner Alphabet has $47 billion.
The sum of the 50 largest companies adds up to more than $1.3 trillion. For comparison purposes, that's almost as much as Canada's entire GDP, which the World Bank says clocked in at just over $1.7 trillion US in 2014. (From CBC News website, April 14, 2016)

This is no small, or exclusively national, problem. And although the World Bank and the IMF and G-20 finance officials meet today in Washington to stare this monster down, there is no reason to contemplate effective measures to combat the tax evasion that is robbing those same national governments of billions of dollars.
Until now, tax, the very concept, has been parked in a national context: from the design, to the laws, to the enforcement, and to the collection and the pursuit of evaders taxes have been the purview of national (and then provincial/state or municipal governments). Some have started to call for the United Nations to police the tax evasion epidemic, but given the cost/benefit analysis perspective of  belonging to the United Nations, it is very hard to imagine many countries signing off on a United Nations Tax Police bureaucracy.
So, again, we are faced with an international problem, with symptoms that could significantly impair, if not destroy, a nation's capacity to provide the normal amenities like health care, education, clean air and water, which is missing an international muscle to combat it.
On one side, there appears to be more countries willing and eager to shape their laws to magnetize and incentivize foreign investors to park their billions in accounts so far secret from the public. Like the casino/lottery charade that too many governments have resorted to in order to keep pace with rising costs of basic services, tax havens are another instrument/arrow in the quiver of the uber-rich to pave their paths to reversing the Indian definition of "untouchable" (from the uber-poor to the uber-rich).
On the other side, few national governments would easily agree to surrender any capacity they might now have to search, find, prosecute and collect from the tax evaders who have some legitimate connection to their respective nations. National pride, national competence, national responsibility and national duty prevail over the surrender of those epaulets to an international agency acting on their shared and joint behalf.
So while there will be some anguish, some wringing of hands, and some serious frowns and finger-wagging coming from the Washington conflab today, there is unlikely to be any substantive action taken either to prevent specific nations from accommodating tax evaders or to prosecute those same offenders.
The Canadian government proudly boasts having just allocated some $440 million to Canada Revenue Agency to prosecute Canadian tax evaders, and in that single act, removed that money out of the potential it has to provide health care, education, housing and work with dignity for aboriginal people across the country. Other countries seeking to recover their lost tax revenue will presumably take similar steps, thereby depleting foreign aid budgets, robbing developing countries from the enhanced opportunities for health care, education clean water and normal human amenities.
And the tax evaders, those individuals and corporations who can readily afford the best tax lawyers and accountants from the world market for such services, will seek alternative locations and instruments that keep their efforts ahead of the revenue departments of the various nations.
And all of this depletion of national revenue streams, resembling the hundreds if not thousands of pipelines that stretch into the waters of the Great Lakes, gulping fresh water, much of it for commercial purposes for profit for corporations avoiding any compensation for the public purse, would have gone under the 'radar' of public awareness and public prosecution.
One is prompted to ask some cogent questions:
  • Are tax evaders so far ahead of the public knowledge and capacity that, just as we are with the ever morphing technology deployment of the Islamic terrorists, national governments are playing catch up, while also falling behind even further every day?
  • Are national governments (and the politicians seeking office) going to have to start campaigning, where they are elected, on the issue of joining international initiatives in an increasingly robust and thereby costly manner, in order to protect the people they represent?
  • Are national and provincial and local law enforcement agencies now relegated to the 'mickey-mouse' infractions while the real offenders sit in corporate board rooms and desert bunkers basking in the shadows of their own security apparatus?
  • Is the whistle-blower the new social conscience, and the prophet of the future for whom new attitudes, approaches and new laws are needed just in order to preserve the flow of the kind of information needed to keep the game honest?
  • Has the corporate media fully surrendered to the demands, expectations of their corporate masters, in falling for the seduction of mini-and-faux conflicts and nano-second flirtations like the revival of a mini-Trudeau mania in Canada, and the Russian buzzing of the U.S. warship yesterday, and the Trump wrestling match for the Republican nomination for the presidency, while, like the chemicals used in fracking, the real story and the real damage in being done under the surface of our consciousness?
  • While there have been thousands of micro-philanthropics mounted in recent years (and we applaud those initiatives), are we so fixated on the micro solutions that we fail to notice the macro-issues crying out for international co-operation with both resources and muscle, or perhaps have we surrendered our national responsibility for international development to those philanthropics?
  • And although the epidemic of incarceration is epic in the United States, have lawmakers generally been to focused on the making of local headlines that take trouble off the streets, while neglecting the prevention strategies for those very troubled lives that do not grab headlines: effective schools, accessible and affordable quality health care, clean water, sanitation and opportunity for all....none of which compares in garnering headlines like a new military manufacturing facility, a new military base, a new homeland security sector...?
  • Are we finally coming to recognize that our refusal to deal with the real and the toxic and the somewhat distasteful truths in our culture is coming to bite us in the backside?
Maybe, with the confluence of global warming and climate change dangers, the gaping hole in personal income  between the have's and the have-not's, the rise of international terrorism, and the increasing use of digital technology, we might actually waken to both the depth and breadth of our dangers, and dig deeper for collaborative measures to address those shared threats. Can we hope?


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