Thursday, November 01, 2007

The selfish isles and the MDGs

The high-brow tax research organisation TaxAnalysts has published some remarkable data in new reports about Jersey and Guernsey, mostly drawn from these jurisdictions’ own databases. Note this paragraph, for example.

At the end of 2006, there were $491.6 billion of assets in the Jersey financial sector beneficially owned by non-Jersey individuals who were likely to be illegally avoiding tax on those assets in their home jurisdictions. We estimated the comparable figure for Guernsey to be $293.1 billion.

That’s a total of $784.7bn. Applying the same simple calculation used by Richard Murphy to this data:

Earning 7%, that much money would generate annual income of $54.9bn. Taxing that at a modest 30% rate would yield $16.5bn. That is between a quarter and a third of the sum that the World Bank estimates would be needed to tackle the Millennium Development Goals to "reverse the grinding poverty, hunger and disease affecting billions of people." Now there's no proof (these are, after all, secrecy jurisdictions) that all that tax is indeed being evaded. But why else put your money there?

And remember: these are just two small islands, near Britain, whose financial sectors are closely intertwined with the City of London. There are more than eighty tax havens around the world. Just think of all the harm caused to democracy, and all the extra poverty and inequality, that such places generate.

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