Politicians increasingly feeling the pressure on tax

Just over ten years ago, U.S. Treasury Secretary Paul H. O'Neill, when asked to comment on recent findings that fewer than 6,000 of more than 1.1 million offshore accounts and businesses were properly disclosed (and therefore legal), his response was blunt. "I find it amusing."

These days, a very different mood is abroad. In the United States, Republican Presidential candidate Mitt Romney's (limited and belated) release of his tax returns have stoked a storm of media outrage. In the United Kingdom, we have seen the UK Chancellor George Osborne expressing 'shock' at the discovery that some of Britain's wealthiest people pay almost no tax at all. In today's news, the FT reports that:

David Cameron, the UK prime minister, has indicated he would be happy to publish his tax returns, as the government considers whether ministers should be more transparent with the electorate about their personal tax affairs.
. . .
Mr Cameron follows George Osborne, the chancellor, who said last weekend he would be “very happy” to consider at least publishing ministers’ personal tax returns before the next general election.

We have never taken a position on whether or not everyone's tax affairs should be made public - most (but not all) countries don't do this, but it seems like be a good idea to hold politicians to a higher standard. Disclosure in the United States has long generated robust and healthy debate about the candidates' approach to the world.

But of course there are many pitfalls involved in publication. One is that it is easy to sidestep disclosure requirements, such as by bundling up assets into offshore or other secret entities. Here are some useful pointers for reform, in this respect.