Tip of the tax dodging iceberg
FASCINATING though it is to hear that politicians from other countries are as bent as a clockwork orange, it beggars belief that a BBC TV programme on tax havens ignored Britain’s central role in this financial abuse.
The so-called Panama Papers leaked from Panamanian law firm Mossack Fonseca look like a huge deal, but they are the tip of the iceberg.
There are around 28 tax havens around the world under British legal jurisdiction and no-one denies that the justification for their existence is, as the name suggests, to enable big business and rich individuals to reduce the amount of tax they pay.
It involves a measure of subterfuge, assisted by legal measures connived at by governments such as our own, to dodge legitimate taxation.
Mossack Fonseca is outraged by suggestions that it has done anything illegal, insisting that it has never been charged over its activities that are “beyond reproach.”
That is probably true because there has always been an unspoken agreement between powerful Western governments that taxes are a bit of a nuisance for the wealthy minority.
While small businesses that are late in paying their VAT returns or self-employed workers underestimating their income can be fined for defrauding HM Revenue & Customs, that fate rarely befalls the elite.
It is no secret that the Prime Minister’s late father Ian Cameron, as a client of Mossack Fonseca, dodged paying taxes in Britain, benefiting David Cameron later as an heir to the tax-free bonanza that his father built up.
Once again, perfectly legal but a graphic illustration of how the ruling class devises tax laws that meet its own need and greed.
Downing Street has the gall to insist that whether or not the Cameron family retains some wealth in offshore tax havens is a “private matter.”
He has made a great song and dance about his supposed determination to shine the spotlight of transparency on offshore tax havens but, poor soul, he hasn’t been able to persuade the administrations in crown dependencies and overseas territories to see things his way.
It must be tragic for a government that seeks new targets for aerial bombardment on a pretty regular basis, to lack the firepower to compel these all-powerful specks of land to do what he wants.
But, his spokeswoman assures us, Cameron “rules nothing out,” which is rapidly becoming the everpresent accompaniment to prime ministerial expressions of impotence.
Nothing has been achieved, but nothing has been ruled out, so hope springs eternal.
Such soft soap cannot be allowed to wash.
Allowing the rich and powerful to dodge their tax responsibilities — no matter how legally — is not a victimless crime.
It denies Britain’s Exchequer vital funds that could be invested in essential public services, an improved infrastructure and a long-awaited industrial strategy.
But the real victims of the global tax-dodging are the poorest nations of the world without the strength to resist transnational corporations’ demands and which lose around $200bn of untaxed income every year.
Were it not for this legalised robbery of the poor, African countries in particular could dispense with the often patronising aid programmes advanced by the developed world.
Cameron talks the talk over tax avoidance havens, but he won’t do anything meaningful to offend the class, of which he is part, that benefits from them.
Shadow chancellor John McDonnell’s insistence on the need for a root-and-branch review of HMRC is essential to put taxation on a compulsory and fair basis while fulfilling our internationalist duty to those exploited most cruelly by transnational corporations.