Tax havens are robbing us of our democracy

The Spring 2017 JUSTnews discussion paper features a sermon by Rev. Steven Epperson, in which he presents what political scientist Edward Luttwak called “the most important book of the decade”: The Panama Papers: Breaking the Story of How the Rich and Powerful Hide their Money. Epperson also looks at a second book, The Hidden Wealth of Nations: The Scourge of Tax Havens.

The problem is that the middle and working classes are shouldering the financial burden for our entire society, while the rich one percent are using shell companies and tax havens to avoid paying their share–and they are doing it with impunity. Or, as Epperson puts it, “The trillions of off-shore wealth beyond the reach of taxing authorities in the past 30 years has wholly subverted what could have been the equalizing effects of taxation.”

This is more than simple theft from the public coffers. It is more, even, than a deft subversion of democracy. It also has implications for global peace and humanity’s future, according to Thomas Picketty, in The Hidden Wealth of Nations: “If a rising fraction of the population, at the bottom and in the middle of the pyramid, feels that the system is not working for them, and that they are not being well treated by the global economy or by their government[s], then they might reject the very notion of interclass solidarity and of a fair fiscal and financial state. Some might even become tempted by nationalist solutions, ethnic divisions, and the politics of hatred.” I feel an eerie sense of déja vu when reading Picketty’s prediction.

But there is a possible recourse, Epperson reminds us, in the solutions proposed by economists, the Governor of the Bank of England, Mark Carney, and the lead journalists of the Panama Papers.

  1. Step one: create a system to automatically exchange information about these bank accounts.
  2. Step two: Create a globally transparent register of all companies that lists the real owners of companies and foundations.

These courses of action are explored in some detail in a final article of the discussion paper, entitled How to fix Canada’s tax-haven problem.

And, since we need government action in order to achieve this, Epperson has kindly provided a template letter that people like you and me can send to the Minister of Finance. (You can simply copy and paste the text from the discussion paper into your email.) Happy writing!

 

4 thoughts on “Tax havens are robbing us of our democracy

  1. I received a survey call today on behalf of the Federal Liberal Party’s Victory Fund of which I am a donor. I was asked if I had any priorities for the government at this time. I immediately vocalized about the trillions of Canadian and other countries’ tax money hidden in offshore banks. I underlined this issue as being my #1 priority to tackle. The caller thanked me profusely for my awareness and my suggested urgency in steps to: in Reverend Steven Epperson’s words, “create an effective system for the automatic global exchange of information about bank accounts, and establish a globally transparent register of all companies listing the real owners of companies, foundations and trusts”

  2. Great summary, Cym.
    And thanks to Stephen for the discussion paper and suggested letter.

    Phil, I like the idea of an action item being included in a discussion paper, as in this one.

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