Apologists insist that tax havens protect individual freedom. They promote capital accumulation, fair competition between nations, and better tax laws in other parts of the world. They also promote economic growth. But even if all of this were true—and it isn`t—does it outweigh the ethical damage they cause? The numbered bank accounts of tax havens are notoriously safe havens for looting, fraud, corruption, terrorism, drug trafficking, illegal gambling, money laundering and looting by Arab despots such as Gaddafi, Mubarak and Ben Ali, who had frozen all Swiss accounts. If we want to end extreme inequality, we must call on world leaders to end the era of tax havens and the secrecy that allows wealthy individuals and international corporations to avoid their fair share of taxes. Tax havens or “offshore financial centres” can be defined as small, well-managed tax jurisdictions that have no significant domestic economic activity and impose low or zero tax rates on foreign investors. In this way, they attract large capital inflows, especially from high-tax countries. Tax havens charge fees and, in some cases, low tax rates on this foreign capital in order to increase government revenues. Tax havens generally do not require a significant local presence of external companies. Such a concession could lead to interesting situations. For example, a 2008 report by the Government Accountability Office found that a building in the Cayman Islands housed 18,857 companies, mostly international. Some of the most popular tax havens are countries that value secrecy. The Cayman Islands have some of the best secrecy laws, while other countries that also rank high in secrecy and have little to no taxes are the British Virgin Islands, Bermuda, Guam, Taiwan, and Jersey.
From campaigns to end the financial secrecy that hides trillions of people in tax havens to promoting investment in universal education and healthcare, Oxfam is ensuring that the poor get a share of the power and resources that help reduce poverty and inequality. “Don`t believe everything you read in the media,” Lewellen urges readers. “The next time you pick up a Wall Street Journal and read about how bad tax havens are, think twice about whether it`s still true.” The abuse of tax havens is also not a small problem, as only a small number of individuals or companies use tax havens to defraud the government. With an estimated twenty or thirty trillion dollars in offshore accounts and the increasing number of massive fines paid by corporations for the illegal abuse of tax havens, it is becoming clearer every day that massive fraud is being committed against the public in the United States and many other countries – hundreds of billions of taxpayer dollars that should go into state coffers. Instead, remain in the hands of corrupt individuals. and businesses. And as regulators and the public gradually become aware of this scam, scammers – surrounded by their lawyers, accountants, private bankers and high-priced advisers – are refining their tactics, finding new loopholes, and improving to cover their tracks. Here is a typical example. Paul Vallely has a column entitled “There is no moral case for tax havens” in the British Independent. For this and other reasons, a group of 300 of the world`s leading economists recently called for an end to tax havens – or at least an end to the financial secrecy they offer.
It`s unlikely. On the one hand, as the Panama Papers have shown, the people who are directly empowered to make the necessary changes are themselves deeply involved in the world of offshore finance; That is, they derive significant personal benefits from maintaining the system. For the same reason, leaders of smaller nations may be reluctant to gain an economic foothold, perhaps reluctant to abandon the temptations of rapid wealth that offshore finance seems to offer. For the same reason, it is extremely difficult to get rid of a country from a tax haven once that industry becomes a monoculture that dominates both the economy and the government. As the cases of Jersey and Antigua show, there is often nothing left to rely on when the offshore company dries up or leaves. However, it is not clear to what extent this model is applicable to countries that are already considering or participating in the transition to offshore financing.