You may have heard of the role of the Cayman Islands, Jersey, the Isle of Man, the US state of Delaware and others as tax havens. But guess which one tops the dismal list of those facilitating global tax evasion and money laundering? Switzerland! So much for that image of a global public citizen.
This week I attended a terrific talk by John Christensen who is the founder of the Tax Justice Network. Around half of the finance for world trade passes through tax havens to avoid taxation. Tax havens hide and facilitate the laundering of trillions of dollars on behalf of dictators, organised crime, high-wealth individuals and multinationals. Some $11 trillion in assets are held offshore, which deprives governments of around $250 billion annually.
Why are they a problem? (From http://www.tackletaxhavens.com/ )
1. Tax havens help rich people hide money that should be spent on schools, hospitals, roads and other public services
2. Tax havens force poor people to pay the taxes of the rich
3. Tax havens help criminals hide their loot
4. Tax havens help dictators and their cronies plunder the resources of developing countries
5. Tax havens allow banks to dodge financial rules and regulations
6. Tax havens corrupt markets, concealing insider dealing and supporting aggressive tax dodging by multinational companies
7. Tax havens create a private world of secrecy, impunity and power for rich elites
8. Tax havens widen the gap between rich and poor people
9. Tax havens make laws in secret which affect us all
10. Tax havens degrade our faith in democracy
Nicholas Shaxon’s book ‘Treasure Islands: Tax Havens and the Men Who Stole the World’ is also a terrific overview.
UPDATE: Check out the great article in The Age by Ben Butler on ‘Counting the Cost of Tax Havens’
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