FacebookTwitterGoogle+RedditEmail

Tax Haven Hypocrisies

What are the Group of 20 countries really up to, with their grand plans against tax havens?  France’s Nicolas Sarkozy had been particularly noisy on that score, hoping for tough sanctions against off shore centers intent on evading tax officials.  Such moves are ostensibly based on an effort to cleanse the global financial system of this “scourge” – capital that moves in less than mysterious fashion to areas of lesser accountability and higher returns.

The G-20 countries, after their London labours, were meant to produce a “blacklist” of recalcitrant jurisdictions.  But as Alexander Neubacher of the German magazine, Der Spiegel, rightly remarks, it must be one of the shortest blacklists in history.  With remarkable deftness, a list that would have seemed impressively long seemed startlingly short.  None, to be exact.  Overnight, tax havens had, it would seem, ceased to exist.  No country was willing to throw their hat in the ring – we are all saints in the financial system now.

The reasoning behind this sudden willingness to make such escape options for enterprising businesses and individuals disappear is clear enough.  No country wants sanctions on the basis that they offer such services.  The official communiqué of the G-20 London summit trumpeted with confidence that, “The era of banking secrecy is over” promising stern measures against countries not in accord with the “international standard for exchange of tax information.”

How did tax havens and associated countries miraculously purify themselves overnight?  A solemn assurance to abide by the new rules was all that was required, an odd kind of gentleman’s agreement.  Given the recent chapters in banking and financial irresponsibility, this provision is barely believable.

The G-20 gloss has also given the impression that tax havens and abuses are the stuff of small offshore states, exotic retreats with little or no regulation to speak off.  Nothing similar could, it is implied, take place within the states of the OECD itself.  Surely.  This, is far from true.  As the Economist pointed out last month (March 26), “The most egregious examples of banking secrecy, money laundering and tax fraud are found not in remote alpine valleys or on sunny tropical isles but in the backyards of the world’s biggest economies.”

The OECD has been busying itself with drawing up a blacklist of tax havens for sometime, an exercise that is weakened by what it leaves out.  In fact, the OECD nations control a staggering 80 percent of the world’s “offshore” market, with many member states qualifying as havens themselves.  Additionally, it has only focused on smaller jurisdictions, suggesting, perhaps, an anti-competitive bias in the whole exercise.

One key offender is, unsurprisingly, the United States, where reporting requirements in such states as Delaware, Wyoming and Nevada are skimpy.  Indeed, political scientist Jason Sharman of Griffith University in Australia argues that the US is worse on such things as shell corporations than classic tax havens, more so than Liechtenstein or Somalia.  The state of Nevada boasts, through its website, “limited reporting and disclosure requirements” along with rapid incorporation services.   Shareholders do not need to be named, and information is rarely shared with the federal government.  Given such services, the ratio of companies to people in that state is roughly one to six.

The new regime of strict bookkeeping and accountability must, as ever, take root within the OECD states before the tentacles are extended to jurisdictions of little consequence to the financial system.  After all, the diligent evasion of financial regulations and rules, the result of an ideological mania, began there.

BINOY KAMPMARK was a Commonwealth Scholar at Selwyn College, University of Cambridge.  Email: bkampmark@gmail.com

 

More articles by:

Binoy Kampmark was a Commonwealth Scholar at Selwyn College, Cambridge. He lectures at RMIT University, Melbourne. Email: bkampmark@gmail.com

June 18, 2018
Paul Street
Denuclearize the United States? An Unthinkable Thought
John Pilger
Bring Julian Assange Home
Conn Hallinan
The Spanish Labyrinth
Patrick Cockburn
Attacking Hodeidah is a Deliberate Act of Cruelty by the Trump Administration
Gary Leupp
Trump Gives Bibi Whatever He Wants
Thomas Knapp
Child Abductions: A Conversation It’s Hard to Believe We’re Even Having
Robert Fisk
I Spoke to Palestinians Who Still Hold the Keys to Homes They Fled Decades Ago – Many are Still Determined to Return
Steve Early
Requiem for a Steelworker: Mon Valley Memories of Oil Can Eddie
Jim Scheff
Protect Our National Forests From an Increase in Logging
Adam Parsons
Reclaiming the UN’s Radical Vision of Global Economic Justice
Dean Baker
Manufacturing Production Falls in May and No One Notices
Laura Flanders
Bottom-Up Wins in Virginia’s Primaries
Binoy Kampmark
The Anguish for Lost Buildings: Embers and Death at the Victoria Park Hotel
Weekend Edition
June 15, 2018
Friday - Sunday
Dan Kovalik
The US & Nicaragua: a Case Study in Historical Amnesia & Blindness
Jeremy Kuzmarov
Yellow Journalism and the New Cold War
Charles Pierson
The Day the US Became an Empire
Jonathan Cook
How the Corporate Media Enslave Us to a World of Illusions
Ajamu Baraka
North Korea Issue is Not De-nuclearization But De-Colonization
Andrew Levine
Midterms Coming: Antinomy Ahead
Louisa Willcox
New Information on 2017 Yellowstone Grizzly Bear Deaths Should Nix Trophy Hunting in Core Habitat
Jeffrey St. Clair
Roaming Charges: Singapore Fling
Ron Jacobs
What’s So Bad About Peace, Man?
Robert Hunziker
State of the Climate – It’s Alarming!
L. Michael Hager
Acts and Omissions: The NYT’s Flawed Coverage of the Gaza Protest
Dave Lindorff
However Tenuous and Whatever His Motives, Trump’s Summit Agreement with Kim is Praiseworthy
Robert Fantina
Palestine, the United Nations and the Right of Return
Brian Cloughley
Sabre-Rattling With Russia
Chris Wright
To Be or Not to Be? That’s the Question
David Rosen
Why Do Establishment Feminists Hate Sex Workers?
Victor Grossman
A Key Congress in Leipzig
John Eskow
“It’s All Kinderspiel!” Trump, MSNBC, and the 24/7 Horseshit Roundelay
Paul Buhle
The Russians are Coming!
Joyce Nelson
The NED’s Useful Idiots
Lindsay Koshgarian
Trump’s Giving Diplomacy a Chance. His Critics Should, Too
Louis Proyect
American Nativism: From the Chinese Exclusion Act to Trump
Stan Malinowitz
On the Elections in Colombia
Camilo Mejia
Open Letter to Amnesty International on Nicaragua From a Former Amnesty International Prisoner of Conscience
David Krieger
An Assessment of the Trump-Kim Singapore Summit
Jonah Raskin
Cannabis in California: a Report From Sacramento
Josh Hoxie
Just How Rich Are the Ultra Rich?
CJ Hopkins
Awaiting the Putin-Nazi Apocalypse
Mona Younis
We’re the Wealthiest Country on Earth, But Over 40 Percent of Us Live in or Near Poverty
Dean Baker
Not Everything Trump Says on Trade is Wrong
James Munson
Trading Places: the Other 1% and the .001% Who Won’t Save Them
Rivera Sun
Stop Crony Capitalism: Protect the Net!
FacebookTwitterGoogle+RedditEmail