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<nettime> Panama Papers having no effect?
Brian Holmes on Mon, 9 May 2016 12:42:03 +0200 (CEST)


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<nettime> Panama Papers having no effect?


[ One of the core elements of the neoliberal period has
been the existence of tax havens as documented Nicholas
Shaxon's book Treasure Islands, or by the Tax Justice Network:
http://tinyurl.com/price-of-offshore. The tax haven, epitomized by
Switzerland and Luxembourg as well as Guernsey and the British Virgin
Isles, is a basic institution for the transnational capitalist class.
The pressure to get rid of these havens is growing dramatically in
the wake of the Panama Papers. I say, go for it, civil society! Why
complain about this one? - BH ]

***

Tax havens 'serve no useful economic purpose': 300 economists tell world leaders
Published:
9 May 2016

http://oxf.am/Z8YT

Experts including Thomas Piketty, Jeff Sachs, Nora Lustig and Angus
Deaton call for more tax transparency

More than 300 leading economists from 30 countries have today written
to world leaders warning that there is no economic justification
for allowing tax havens to continue, and urging them to bring an
end to offshore financial secrecy. The letter comes ahead of the UK
Government's summit on offshore corruption in London on Thursday,
which politicians from 40 countries as well as World Bank and IMF
representatives are expected to attend.

Signatories include Thomas Piketty, author of best-selling 'Capital
in the Twenty-First Century'; Angus Deaton, the current Nobel
Prize-winner for Economics and Nora Lustig, professor of Latin
American Economics at Tulane University, as well as influential
experts with experience of advising governments and policymakers, such
as Jeff Sachs, director of Columbia University's Earth Institute and
an adviser to UN Secretary General Ban Ki-moon, and Olivier Blanchard,
former IMF chief economist.

<snip>

THE LETTER

Dear world leaders,

We urge you to use this month's anti-corruption summit in London
to make significant moves towards ending the era of tax havens.
The existence of tax havens does not add to overall global wealth
or well-being; they serve no useful economic purpose. Whilst
these jurisdictions undoubtedly benefit some rich individuals and
multinational corporations, this benefit is at the expense of others,
and they therefore serve to increase inequality.

As the Panama Papers and other recent exposes have revealed, the
secrecy provided by tax havens fuels corruption and undermines
countries' ability to collect their fair share of taxes. While all
countries are hit by tax dodging, poor countries are proportionately
the biggest losers, missing out on at least $170bn of taxes annually
as a result.

As economists, we have very different views on the desirable levels
of taxation, be they direct or indirect, personal or corporate.
But we are agreed that territories allowing assets to be hidden in
shell companies or which encourage profits to be booked by companies
that do no business there, are distorting the working of the global
economy. By hiding illicit activities and allowing rich individuals
and multinational corporations to operate by different rules, they
also threaten the rule of law that is a vital ingredient for economic
success.

To lift the veil of secrecy surrounding tax havens we need new global
agreements on issues such as public country by country reporting,
including for tax havens. Governments must also put their own houses
in order by ensuring that all the territories, for which they are
responsible, make publicly available information about the real
"beneficial" owners of company and trusts. The UK, as host for this
summit and as a country that has sovereignty over around a third of
the world's tax havens, is uniquely placed to take a lead.

Taking on the tax havens will not be easy; there are powerful vested
interests that benefit from the status quo. But it was Adam Smith
who said that the rich "should contribute to the public expense, not
only in proportion to their revenue, but something more than in that
proportion." There is no economic justification for allowing the
continuation of tax havens which turn that statement on its head.

CASE STUDY: MALAWI

Tax revenue that should be helping to fund public services like
healthcare and education in Malawi and other poor countries is
disappearing at an alarming rate. It's estimated that Africa loses
around $14 billion in tax revenues annually - enough money to pay
for healthcare for mothers and children that could save four million
children's lives a year and employ enough teachers to get every
African child into school. In Malawi, it's impossible to get a full
picture of the scale of tax dodging. However, Oxfam calculated that
the lost tax revenue from the money revealed to be held by Malawians
in HSBC accounts in Geneva in last year's Swissleaks scandal could pay
the salaries of 800 nurses for one year.

Half of Malawi's 16 million people live in poverty. The health system
is seriously under-resourced with shortages of staff and vital
medicines. On average there are just three nurses for every 10,000
people. Public spending per primary-school child is among the world's
lowest. Recent cuts to government budgets are making the situation
even worse for the poorest who have no way to pay for private clinics
and schools.




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