Tax Havens - Mecca for flight capital
For the German speakers among you, Tax Havens: Mecca for flight capital is the title of a recent German TV-program featuring TJN’s John Christensen. It was broadcast on 29th March 2011 by the reputed business/consumer magazine Plusminus.
It brings a very pointed argument about the political mismanagement consisting in, on the one hand, shovelling billions of Euros into bailout-operations for European states such as Greece and Ireland, while turning a blind eye to rampant tax evasion through tax havens spread across the world.
We have often pointed out that the fight against corruption, the black market or black economy, and tax havens, must go hand in hand. Only when the better-off in society are perceived as setting a good example on the issue of paying taxes, is there a reasonable chance that their fellow citizens will follow.
“At the same time, a lot of black money is flowing out of Greece: estimates of US-experts indicate a loss of 160bn US$ in the last 10 years alone. The tax free-earned money is invested and hidden from the state – in a tax haven. As the state is almost bankrupt, it needs to pay very high interest rates. What then does the clever tax evader do? He invests – through the tax haven – in Greek state bonds and cashes in on the high interest paid on them.”
So why has this problem not been addressed? One reason is that the EU so far failed to take a unified position:
“There are very powerful members of the EU such as Britain with the Channel Islands, Ireland and Luxembourg, who are tax havens themselves and promote their own interests against the interests of European citizens.”
We like the conclusions a lot:
“Instead of countering the deep-seated causes of the financial and Euro crisis, the European Council allows ever more billions in rescue operations for the notorious tax evading bulwark of Greece, the tax haven Ireland and the gambling banks all over Europe.”
You can read the programme transcript (in German) here.