These estimates reveal a staggering failure," says John Christensen of the Tax Justice Network. "Inequality is much, much worse than official statistics show, but politicians are still relying on trickle-down to transfer wealth to poorer people.
"This new data shows the exact opposite has happened: for three decades extraordinary wealth has been cascading into the offshore accounts of a tiny number of super-rich."
- The people in charge of undemocratic, autocratic regimes in the developing world have shifted their cash (whether or not it is ill-gotten) to places where it’s safe. This isn’t about tax avoidance – one of the features of developing countries is their inability to raise taxes (which, by the way, is why over a third of Uganda’s national budget is overseas aid). It’s about ensuring that most of the cash stays in the family and isn’t lifted by the next generation of kleptocrats. According to the Guardian’s jolly infogram just 20 developing countries account for $7.5 trillion of the stashed cash.
- The second problem is that no distinction is made between income and assets. Most places don’t tax assets so it’s perfectly possible for a lot of this cash to have already been taxed. Perhaps not at the confiscatory rates prefers by Guardian readers but taxed nonetheless. And the implication (a pretty daft one if you ask me) is that all this money is held as cash. And that it’s stored in a big vault in the manner of Scrooge McDuck. Forgive me for thinking that most of these bloated capitalist billionaires would prefer that their cash did some work for them while stashed away avoiding tax? Which means it’s generating more wealth and (as a by-product) creating jobs, supporting businesses and generally doing that good stuff that money well-used – note this you wasteful governments – does.
- Finally, no-one spots the other part of the problem – tax rates on income are too high. This isn’t just the moral offence of taking half of what someone works to earn. It’s much more practical than that – if, as a result of our tax regimes or other confiscatory laws, rich people bundle up their cash and stick it somewhere else, then it’s our tax system that is the problem rather than the “ethics” of the rich people.