Thursday, April 07, 2011

Who are the real criminals?

There's an elegant article by Professor George Irvin (pictured here) in Social Europe exploring the links between the rise of tax havens in the global economy and mounting wealth and income inequality: "...the rich have got a lot richer over the past 30 years. In Britain, the top 1 percent owns over one fifth of the wealth (and the top decile over one half). While inequality grows, bankers continue to get outrageous bonuses at everyone else’s expense. Tax havens are a crucial piece of this complex puzzle."

Indeed they are; not least because they have played such an important part in the process of undermining the tax laws of other countries, encouraging the rise of the global tax avoidance industry - surely one of the most socially corrosive industries on the planet - and accelerating the race-to-the-bottom of regulatory standards. As Irvin notes, the end game has been to use tax havens to force lower taxes on capital at the expense of higher taxes on ordinary people:

"The right wing response is invariably that while tax evasion is illegal, tax avoidance is perfectly legit. To put it mildly, this argument is disingenuous. Tax avoidance has turned into a huge money-spinning game of cat-and-mouse with HM Customs and Revenue in which fat cats and corporations employ a myriad of legal dodges – many ‘offshore’- to avoid the taxes. As a consequence, ordinary punters must pay more."

We at TJN have consistently argued that tackling tax havens must be a priority for governments wanting to reverse the remorseless assault on public services and the global rise of inequality. The seriousness of this issue can be judged by the British government's response to UK Uncut activists who have taken a lead role in putting tax avoidance onto the media headlines. As George notes in his final paragraph:

"On 26 March 2011, one of the largest demonstrations in Britain’s history took place in London to protest against budgetary cuts imposed by the ConDev government. Up to half a million people marched, while on the fringes a few hundred members of UK Uncut – a group dedicated to street-theatre protest against tax avoidance and evasion – occupied the premises of some of London’s leading corporate tax avoiders. These few hundred were treated like criminals by the police and many of them arrested. But their trespass stands as nothing next to that of the big-time looters. Who are the real criminals?"

Read the full article here.

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