{"id":129017,"date":"2019-03-11T12:01:19","date_gmt":"2019-03-11T12:01:19","guid":{"rendered":"https:\/\/www.transcend.org\/tms\/?p=129017"},"modified":"2019-03-20T06:16:58","modified_gmt":"2019-03-20T06:16:58","slug":"elite-banking-at-your-expense-how-secretive-tax-havens-are-used-to-steal-your-money","status":"publish","type":"post","link":"https:\/\/www.transcend.org\/tms\/2019\/03\/elite-banking-at-your-expense-how-secretive-tax-havens-are-used-to-steal-your-money\/","title":{"rendered":"Elite Banking at Your Expense: How Secretive Tax Havens Are Used to Steal Your Money"},"content":{"rendered":"
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expoknews.com<\/p><\/div>\n

Tax havens are locations around the world where wealthy individuals, criminals and terrorists, as well as governments and government agencies (such as the CIA), banks, corporations, hedge funds, international organizations (such as the Vatican) and crime syndicates (such as the Mafia), can stash their money so that they can avoid regulation and oversight and, very often, evade tax. According to Nicholas Shaxson: \u2018Tax havens are now at the heart of the global economy.\u2019<\/p>\n

Which is why, as he explains it: \u2018The term \u201ctax haven\u201d is a bit of a misnomer, because such places aren\u2019t just about tax. What they sell is escape: from the laws, rules and taxes of jurisdictions elsewhere, usually with secrecy as their prime offering.\u2019 See \u2018The tax haven in the heart of Britain\u2019<\/a>. A tax haven (or \u2018secrecy jurisdiction\u2019) then is a \u2018place that seeks to attract business by offering politically stable facilities to help people or entities get around the rules, laws and regulations of jurisdictions elsewhere\u2019. See Treasure Islands: Tax Havens and the Men Who Stole the World<\/em><\/a>.<\/em><\/p>\n

Tax havens are a vitally important part of the global infrastructure of corruption and criminality \u2013 see \u2018Giant Leak of Offshore Financial Records Exposes Global Array of Crime and Corruption\u2019<\/a> \u2013 that enables privileged individuals and their organizations to legally and illegally steal money from the rest of us, particularly those in developing countries, and to have the services of a vast network of accountants, bankers, lawyers and politicians (often from captured legislatures) to help them do it, and to ensure that they get away with it.<\/p>\n

How many tax havens are there? Where are they? How much money do they have? Who uses them? Why? How do they work? Why does all this matter to us? And what can we do about them?<\/p>\n

Tax Havens: how many and where are they?<\/strong><\/p>\n

In his book Treasure Islands: Tax Havens and the Men Who Stole the World<\/em><\/a>, author and financial journalist Nicholas Shaxson identified about sixty \u2018secrecy jurisdictions\u2019 or \u2018offshore groups\u2019 around the world which he divided into four categories, as follows.<\/p>\n

The most important category, by far, is those tax havens that form the spider\u2019s network of havens centred on the City of London<\/strong>. It has three main layers: there are two inner rings \u2013 Britain\u2019s Crown Dependencies of Jersey, Guernsey (which includes the sub-havens of Sark, Alderney and Brecqhou) and the Isle of Man, and its overseas territories such as the Cayman Islands, Bermuda, the British Virgin Islands and Gibralter \u2013 which are substantially controlled by Britain. The third layer is an outer ring with a more diverse array of havens, like Hong Kong, Singapore, the Bahamas, Dubai and Ireland, which are outside Britain\u2019s direct control but have strong historical and current links to that country and the City of London (which I will discuss below). This network controls almost one half of all international bank assets.<\/strong><\/p>\n

The second category of tax havens is those in Europe notably including Switzerland, Luxembourg \u2013 see \u2018Explore the Documents: Luxembourg Leaks Database\u2019<\/a> \u2013\u00a0 the Netherlands, Belgium and Austria, as well as microstates such as Liechtenstein and Monaco. While \u2018Geneva bankers had sheltered the secret money of European elites since at least the eighteenth century\u2019, the European havens \u2018got going\u2019 during World War I as governments raised taxes sharply to pay for the war.<\/p>\n

The third category of tax havens is that focused on the United States. It has three tiers as well. At the federal level, the US government offers a range of tax exemptions, secrecy provisions and laws designed to attract foreign money. This means, for example, that US banks can legally accept proceeds from a range of crimes as long as the crimes are committed overseas<\/em><\/strong>. The second tier involves individual US states such as Florida (where Central\/South American elites do their banking and the countries adversely impacted are prevented by US secrecy provisions from accessing relevant data, and where much Mob and drugs money is hidden too), Delaware, Nevada and Wyoming, where even terrorist money is protected by secrecy provisions. The third tier of the US network is the overseas satellites such as the American Virgin Islands, the Marshall Islands, Liberia and Panama, with the latter, according to Jeffrey Robinson, being \u2018one of the filthiest money laundering sinks in the world\u2019. See The Sink: <\/em><\/a>Terror, Crime and Dirty Money in the Offshore World<\/em><\/a>.<\/em><\/p>\n

As Shaxson notes: \u2018offshore finance has quietly been at the heart of Neoconservative schemes to project US power around the globe for years. Few people have noticed.\u2019<\/p>\n

The fourth category of tax havens identified by Shaxson includes those that do not fit in the categories above, such as Somalia and Uganda.<\/p>\n

The (incomplete) list of tax havens on the website \u2018Tax Havens of the World\u2019<\/a> will give you some idea of where these secrecy jurisdictions are located but there are important omissions in this list, notably including the City of London Corporation.<\/p>\n

For a brief look at 15 tax havens (again, notably excluding some of the most important) and some of the corporations that use them, see \u2018What Are the World\u2019s Best Tax Havens?\u2019<\/a><\/p>\n

And for a highly instructive and utterly sobering video documentary on British Tax Havens, see \u2018The Spider\u2019s Web: Britain\u2019s Second Empire\u2019<\/a>. This documentary will inform you, among many more important things, that the building housing Her Majesty\u2019s Revenue and Customs, the UK tax office, is owned by an offshore company in Bermuda!<\/p>\n

To summarize the central aspect of the development of tax havens following World War II: \u2018The British Establishment \u2013 an old boys network of privileged elites \u2013 had carved out a lucrative vehicle for themselves in the offshore world after the demise of Empire. They transformed themselves from administrators of Empire to financial handlers for the global elite and multinational corporations.\u2019 See \u2018The Spider\u2019s Web: Britain\u2019s Second Empire\u2019<\/a>.<\/p>\n

Before concluding this section, it is worth emphasizing that, as Shaxson explains it, \u2018the offshore world is not a bunch of independent states exercising their sovereign rights to set their laws and tax systems as they see fit. It is a set of networks of influence controlled by the world\u2019s major powers, notably Britain and the United States. Each network is deeply interconnected with the others.\u2019 He goes on: \u2018The world\u2019s most important tax havens are not exotic palm-fringed islands, as many people suppose, but some of the world\u2019s most powerful countries.\u2019 Shaxson quotes Marshall Langer, a prominent supporter of secrecy jurisdictions: \u2018It does not surprise anyone when I tell them that the most important tax haven in the world is an island. They are surprised,\u00a0 however, when I tell them that \u2026 the island is Manhattan. Moreover, the second most-important tax haven \u2026 is located on an island. It is called the City of London.\u2019<\/p>\n

The City of London Corporation<\/strong><\/p>\n

What is the City of London Corporation<\/a>, also known as the \u2018Square Mile\u2019? It is \u2018a 1.22-square-mile slab of prime central London real estate that stretches from the Thames at Victoria Embankment, clockwise up through Fleet Street, the Barbican Centre, then to Liverpool Street in the north-east, then back down to the Thames just west of the Tower of London.\u2019 See Treasure Islands: Tax Havens and the Men Who Stole the World<\/em><\/a>.<\/em><\/p>\n

According to Shaxson, the City of London Corporation, the \u2018modern period\u2019 of which dates from 1067 (yes, that is not a typing error), is \u2018the local-government authority for the 1.2-square-mile slab of prime real estate in central London that is the City of London. The corporation is an ancient, semi-alien entity lodged inside the British nation state; a \u201cprehistoric monster which had mysteriously survived into the modern world\u201d, as a 19th-century would-be City reformer put it.\u2019<\/p>\n

Importantly, Shaxson explains, \u2018the role of the City of London Corporation as a municipal authority is its least important attribute. This is a hugely resourced international offshore lobbying group pushing for international financial deregulation, tax-cutting and tax havenry around the world.\u2019 Moreover, it is \u2018the hub of a global network of tax havens sucking up offshore trillions from around the world and sending it, or the business of handling it, to London\u2019. Notably, so powerful is the City of London that no sovereign or government of Britain in a thousand years has had the courage to seriously take it on and attempt to subject it to British government control. See \u2018The tax haven in the heart of Britain\u2019<\/a>.<\/p>\n

How much money is in Tax Havens?<\/strong><\/p>\n

So how much of the world\u2019s wealth is stashed in tax havens around the globe? According to the Tax Justice Network<\/a> in its 2012 report written by James S. Henry \u2018The Price of Offshore Revisited: New Estimates for \u201cMissing\u201d Global Private Wealth, Income, Inequality, and Lost Taxes\u2019: \u2018A significant fraction of global private financial wealth \u2013 by our estimates, at least $21 to $32 trillion as of 2010 \u2013 has been invested virtually tax-free through the world\u2019s still-expanding black hole of more than 80 \u201coffshore\u201d secrecy jurisdictions. We believe this range to be conservative…\u2019 He goes on to emphasize that \u2018this is just financial wealth. A big share of the real estate, yachts, racehorses, gold bricks \u2013 and many other things that count as non-financial wealth \u2013 are also owned via offshore structures where it is impossible to identify the owners\u2019.<\/p>\n

Henry also notes that given that Credit Suisse estimated global wealth in 2011 at $231 trillion, the amount of money in secrecy jurisdictions is conservatively estimated at 10% of global wealth.<\/p>\n

But other figures do indeed suggest this estimate is low. Shaxson cites compelling evidence that \u2018More than half of world trade passes, at least on paper, through tax havens. Over half of all banking assets and a third of foreign direct investment by multinational corporations, are routed offshore.\u2019 Moreover, as long ago as 2008, the US Government Accountability Office reported that 83 of the 100 biggest corporations in the USA had subsidiaries in tax havens and the following year, using a broader definition, the Tax Justice Network discovered that ninety-nine of Europe\u2019s hundred largest companies used offshore subsidiaries. And in each country, \u2018the largest user by far was a bank\u2019. See Treasure Islands: Tax Havens and the Men Who Stole the World<\/em><\/a>.<\/em><\/p>\n

In any case, the most recent estimate by the Tax Justice Network indicates \u2018tax losses to profit shifting by multinational companies (a)pplying a methodology developed by researchers at the International Monetary Fund to an improved dataset… of around $500 billion a year\u2019. See \u2018New estimates reveal the extent of tax avoidance by multinationals\u2019<\/a>.<\/p>\n

To reiterate then, on the understanding that these estimates are probably quite low, by 2010, between $US21 and $US32 trillion had been taken out of circulation so that it was beyond the laws, financial regulations and taxes that the rest of us cannot escape. But that figure has been added to by half a trillion dollars each year since, by moving more money into tax havens. And don\u2019t forget: this figure does not include non-financial wealth. How many gold bricks, yachts, artworks and racehorses do you own and have stashed away somewhere free of scrutiny?<\/p>\n

Who uses Tax Havens? And why?<\/strong><\/p>\n

As I mentioned above, tax havens are used by wealthy individuals (including businesspeople, sports and pop stars), criminals and terrorists, as well as governments (and their agencies), banks, corporations (such as Amazon and Google), international organizations and crime syndicates (such as the Medellin Cartel). While motives vary, in essence the lack of regulation and oversight, as well as tax evasion, are the reasons that individuals and organizations use them.<\/p>\n

An individual might want to hide stolen wealth, to evade tax or cheat a divorced spouse out of their share of the family fortune. A bank, corporation, crime syndicate, international or terrorist organization might want to evade scrutiny of the source of their money and\/or evade tax on windfall or even ongoing profits (legal and\/or otherwise). A government might want to hide the \u2018dirty money\u2019 it uses to finance \u2018black ops\u2019 (that is, illegal and secret military violence such as that carried out by the CIA). But there are myriad explanations.<\/p>\n

In John Christensen\u2019s analysis of over 100 offshore clients of accounting firm Deloitte Touche he studied in Jersey, he found that the clients were engaging in insider trading, market rigging, failure to disclose conflicts of interest, weapons trading, illicit political donations, contract kickbacks, bribery, fraudulent invoicing, trade mispricing and tax evasion. See \u2018The Spider\u2019s Web: Britain\u2019s Second Empire\u2019<\/a>.<\/p>\n

Most people have heard of the money stashed away by corrupt dictators like Suharto in Indonesia, Ferdinand Marcos in the Philippines and Mobuto Sese Seko of Zaire (now Democratic Republic of the Congo) each of whom stole from the people of their country. However, they could only do this with the help of western enablers and ongoing elite resistance to developing country attempts to create a more transparent and fairer process for collecting tax on cross-border financial flows. As a result, Alex Cobham of the Tax Justice Network observes, worldwide, developing nations lose in excess of $1trillion per year in \u2018capital flight\u2019 and tax evasion to wealthy countries. See \u2018The Spider\u2019s Web: Britain\u2019s Second Empire\u2019<\/a>.<\/p>\n

But these more public examples, while terrible, tend to obscure two important facts. The amount stolen from sub-Saharan Africans, for example, between 1970 and 2008 was at least five times the total amount of their foreign debt during that period \u2013 see \u2018The Spider\u2019s Web: Britain\u2019s Second Empire\u2019<\/a> \u2013 and, by highlighting these examples, attention is drawn away from even worse and ongoing examples of such criminality by those corrupt\/criminal individuals and organizations (including banks, accountancy and legal firms, corporations, international organizations, crime syndicates and governments) committed to using outright theft, fraud, money laundering and other devices to steal wealth from ordinary people all over the world<\/em><\/strong>.<\/p>\n

So, for example, if one follows the money trails of various lucrative financial operations, some technically legal but immoral and others simply illegal, apart from the world\u2019s major corporations, one quickly comes across the names of the major (and well known) banks and financial institutions (such as the Bank of England, Barclays, Goldman Sachs, JPMorgan Chase…), the \u2018big four\u2019 accountancy firms (Deloitte, Ernst & Young (EY), KPMG and PricewaterhouseCoopers), and elite lawyers (such as those in London\u2019s \u2018Magic Circle\u2019, like Clifford Chance, Mourant du Feu & Jeune, and Slaughter and May). See, for example, Treasure Islands: Tax Havens and the Men Who Stole the World<\/em><\/a>, \u2018New estimates reveal the extent of tax avoidance by multinationals\u2019<\/a> and \u2018Looting with Putin\u2019<\/a>.<\/p>\n

Apparently, like major corporations and crime syndicates, few banks, accountancy firms and lawyers have ethics policies that require them to follow the law and to exercise \u2018due diligence\u2019 (check out a client before signing a contract) so that they can steer clear of handling illegal and immoral profits, especially if they are monstrous.<\/p>\n

In fact, according to a US Senate report, \u2018virtually every major bank in the world \u2013 especially the biggest in North America and Europe \u2013 holds accounts for offshore banks and\/or banks in suspect jurisdictions\u2019. See The Sink: <\/em><\/a>Terror, Crime and Dirty Money in the Offshore World<\/em><\/a>.<\/em><\/p>\n

As Eva Joly MEP, vice-chair of the Panama Papers Committee of the European Parliament, succinctly puts it: \u2018Ordinary people are paying taxes. Rich people are not.\u2019 See \u2018The Spider\u2019s Web: Britain\u2019s Second Empire\u2019<\/a>.<\/p>\n

The Vatican<\/strong><\/p>\n

But perhaps the example which best illustrates the moral depravity of those who use tax havens is the Vatican. In his carefully researched book Operation Gladio: The Unholy Alliance between the Vatican, the CIA and the Mafia<\/em><\/a> author Paul L. Williams recounts the efforts of the CIA, former Nazis, the Sicilian\/American Mafia, the Vatican and even Freemasonry to resist an anticipated postwar invasion of western Europe by those \u2018Godless communists\u2019 in the Soviet Union by establishing \u2018stay-behind units\u2019 (clandestine military and paramilitary units) throughout the countries of Europe (Belgium, Denmark, Italy, Netherlands, Norway, Portugal…) led by former Nazis and composed of \u2018die-hard fascist fanatics\u2019.<\/p>\n

This alliance to fight the Cold War against the former Soviet Union and the rising tide of progressive governments in Europe and the rest of the world, particularly as the US war on Vietnam gathered pace, led, as Williams chillingly puts it, to \u2018the toppling of governments, wholesale slaughter and financial devastation\u2019 around the world. It was also, of course, the forerunner to its equivalent \u2013 Operation Condor \u2013 to resist, and destroy if possible, the spread of progressive movements, ranging from communism to liberation theology, throughout Central\/South America.<\/p>\n

While the Vatican played a number of unsavory roles in this alliance, including its facilitation of massive numbers of heroin addictions, its use of counterfeit securities, participation in false flag attacks that killed thousands and strings of gangland slayings, support of military juntas (that massacred tens of thousands) and the \u2018purging\u2019 of progressive priests (including Archbishop \u00d3scar Romero of San Salvador and two Jesuit priests denounced by Fr. Jorge Mario Bergoglio, now Pope Francis, in Argentina \u2013 see \u2018Who is Pope Francis? Jorge Mario Bergoglio and Argentina\u2019s \u201cDirty War\u201d\u2019<\/a> \u2013 and causing the financial destitution of thousands of families, one of its key ongoing functions, designed to maximize the Vatican\u2019s power while highlighting its moral and spiritual bankruptcy, was to act as \u2018God\u2019s banker\u2019 for many of these operations. See Operation Gladio: The Unholy Alliance between the Vatican, the CIA and the Mafia<\/em><\/a>.<\/p>\n

It did this, for example, by accepting Mafia\/Medellin Cartel-collected drugs money (for a 15-20% cut) into the Vatican Bank (technically: Istituto per le Opere di Religione or Institute for the Works of Religion) and then laundering it through its shell companies \u2013 such as Cisalpine Overseas Bank, Astolfine SA, United Trading Corporation, Erin SA, Bellatrix SA, Belrose SA, Starfield SA and Nordeurop Establishment \u2013 in tax havens in the Bahamas, Liechtenstein, Luxembourg, Panama and Switzerland.<\/p>\n

With the CIA providing services, such as the transport of Mafia\/Medellin cocaine to drug dealers in the US, its share of the drug profits (cycled through its own CIA-controlled banks including Continental Illinois, Castle Bank & Trust, and Bank of Credit and Commerce International but eventually involving many of the most prestigious banks in the US, as the money was passed to the Vatican Bank) were used to finance key aspects of Operations Gladio and Condor with weapons also supplied by the CIA from NATO arsenals. But there was plenty of Vatican money in these Operations too.<\/p>\n

As an aside, so devastating was the fallout from the ongoing exposure of the many aspects of Vatican corruption that, by the beginning of the twenty-first century, Roman Catholic membership was falling by 400,000 per year in the USA alone but the trend was even stronger in Europe with \u2018magnificent churches and cathedrals\u2019 becoming museums visited solely by tourists, parishes being boarded up, seminaries and convents closed, and parochial schools consolidated. And this was before the \u2018plague of pedophilia\u2019 had fully hit further decimating the Church\u2019s tattered reputation. To this day, the Vatican Bank remains \u2018one of the world\u2019s leading laundries for dirty money\u2019. See Operation Gladio: The Unholy Alliance between the Vatican, the CIA and the Mafia<\/em><\/a>.<\/p>\n

How do Tax Havens work?<\/strong><\/p>\n

Each tax haven offers its own unique combination of services. After all, it is a tough market competing for the world\u2019s wealth and so each jurisdiction has developed its own set of services designed to maximize its attractiveness to potential clients. In essence, this means that there is some ongoing \u2018competition\u2019 to reduce regulatory and oversight requirements so that each tax haven can attract clientele. This has become so extreme that basic requirements of banking for those who do it legally, such as proof of identity, are not required in the offshore world. In fact, even your true name can be withheld if you wish. It is easier to avoid any risk of embarrassment from exposure this way.<\/p>\n

As a result, virtually any jurisdiction will open an account (or as many accounts as you want) in whatever names you specify. Then, usually employing a variety of devices, ranging from secret bank accounts, nominee directors (usually locals who play no part in the organization bar give it their name) and structures such as shell companies (that exist on paper and perhaps a wall plaque somewhere, but nothing else) and trusts (which, unlike the legitimate version, appear to separate responsibility and control from the benefits of ownership but actually do not), to processes such as transfer pricing (a technique by which companies \u2018shift paper profits into low-tax countries and costs into high-tax countries\u2019 to minimize \u2013 or eliminate \u2013 tax payments) and often employing a convoluted process that rapidly shifts monies through several jurisdictions so that it becomes \u2018untraceable\u2019 (because authorities must get permission to access each jurisdiction in turn in any effort to trace the money), profits are effectively hidden and any accountability to authorities of any kind utterly eliminated. See Treasure Islands: Tax Havens and the Men Who Stole the World<\/em><\/a>.<\/p>\n

For one simple example of such a strategy, employing a technique known as the \u2018double Irish, Dutch sandwich\u2019 (which is legal), see \u2018<\/a>Google shifted $23bn to tax haven Bermuda in 2017, filing shows<\/a>\u2019<\/a>. But you can read other examples here: \u2018The tech giants will never pay their fair share of taxes \u2013 unless we make them\u2019<\/a> and \u20187 Corporate Giants Accused of Evading Billions in Taxes\u2019<\/a>.<\/p>\n

Why does the existence of Tax Havens matter to us?<\/strong><\/p>\n

Well, the simple answer to this question is that just a fraction of the money hidden in tax havens would feed, clothe, house and provide clean water, medical care and educational opportunities to everyone on Earth. It would eliminate the 100,000 deaths by starvation-related diseases each day. It would eliminate poverty and homelessness. And, as one byproduct of having these material needs met, it would facilitate the emergence of an informed, engaged and empowered human population to tackle the vast range of environmental, climate and military threats that currently threaten biosphere collapse and imminent human extinction. See \u2018Human Extinction by 2026? A Last Ditch Strategy to Fight for Human Survival\u2019<\/a>.<\/p>\n

As Professor Prem Sikka puts it more simply: Because of the penetration by financial services executives of the British state, including the Treasury \u2018It deprives people of opportunities to have healthcare, education, security, justice and, ultimately, a fulfilling life.\u2019 See \u2018The Spider\u2019s Web: Britain\u2019s Second Empire\u2019<\/a>.<\/p>\n

Fundamentally, then, tax havens and their secrecy are at the heart of those elite institutions and processes that functionally undermine democracy and give extraordinary power to certain anonymous individuals and their entities without accountability. See \u2018The Spider\u2019s Web: Britain\u2019s Second Empire\u2019<\/a>.<\/p>\n

Of course, the elites that control the tax haven networks are not about to let this change. Tax havens are simply too important as part of the global infrastructure for maintaining elite profit, power and privilege and for resisting grassroots efforts to bring peace, justice and ecological sanity to our world. And that is why they are protected by government legislation and legal systems, with an \u2018army\u2019 of accountants, auditors, bankers, businesspeople, lawyers and politicians ensuring that they remain protected.<\/p>\n

So don\u2019t forget: laws are designed to control and punish you, no matter how trivial your infringement: a parking fine, a littering offence, a petty theft. But if you have enough money, the law simply does not exist. And you can evade taxes legally and in the full knowledge that your vast profits (even from immorally-acquired wealth such as sex trafficking, gun-running, endangered species trafficking, conflict diamonds and drug trafficking) are \u2018lawful\u2019 and will escape regulation and oversight of any kind. See \u2018The Rule of Law: Unjust and Violent\u2019<\/a>.<\/p>\n

Let me give a personal example. I have been a war tax resister since 1983: I have a conscientious objection to paying taxes to the Australian government to deploy military forces in other countries to kill people in my name. So, instead of paying taxes to kill, for many years I donated the equivalent amount to organizations engaged in peace, development, environment and human rights work, and to \u2018pay the rent\u2019 for my use of indigenous land. As some of many outcomes to this conscientious and highly public resistance (garnering national media attention at times), in 1991 I was bankrupted, in 1992 I was convicted of contempt of court (for my conscientious refusal to cooperate with the bankruptcy trustee) and in 1993 my passport was seized. In 1999, I was advised that I will be \u2018bankrupt forever\u2019 because of my ongoing conscientious refusal to finance the killing.<\/p>\n

In the same period, since 1983, trillions and trillions of dollars of tax have been illegally and secretly evaded as wealthy individuals and corporations, criminals and crime syndicates, international organizations and governments channel their incomes and profits through tax havens. Laws and legal systems throughout the world make this possible and, provided it is done correctly, it is quite straightforward to avoid any penalties for secretly evading payment of taxes or hiding money acquired through criminal activity. But the point, as you can see, is that tax evasion by wealthy individuals and corporations meant that many of these individuals and corporations didn\u2019t pay taxes to kill people either. They just didn\u2019t pay taxes at all.<\/p>\n

Of course, their motive was personal gain, their way was legal, they incurred no penalty and, of course, they didn\u2019t pay an equivalent amount to support peace and justice causes. More fundamentally, however, the trillions of dollars they took from the global economy were made by killing and exploiting people and the planet in a significant variety of other ways, ranging from sex trafficking, gun-running, conflict diamonds and trafficking in drugs and endangered species, to simply starving people to death at the rate of 100,000 people each day by managing the global economy, using tax havens as a primary tool, to extract maximum profit.<\/p>\n

Richard Brooks documents how this legal exploitation occurs in another way in his book The Great Tax Robbery: How Britain Became a Tax Haven for Fat Cats and Big Business<\/em><\/a>. The vast tax evasion by elites in Britain, including by diverting funds through tax havens, attracts just five prosecutions each year per \u00a31 billion of evasion of direct taxes. In contrast, benefits fraud by those on unemployment and disability pensions attract 9,000 prosecutions each year per \u00a31 billion of fraud. \u2018So theft by the poor warrants the full force of the law\u2019. But not theft by elites who write the law and largely control the political and legal processes in relation to it.<\/p>\n

Hence, under the guise of \u2018relationship taxing\u2019 (that is, building a relationship between tax authorities and corporate executives and \u2018tailoring\u2019 tax payments to corporate wishes to the extent the law allows), corporations have long known that \u2018If you don\u2019t like the law\u2026 we\u2019ll see what we can do\u2019.<\/p>\n

As is obvious from this example, attempts at government reform, including to defeat tax havens, in the direction of making elites financially and legally accountable, both nationally and internationally, for the responsibilities which the rest of us cannot escape, are invariably for show and, in any case, achieve zero of substance. For example, the attempt to \u2018approve\u2019 a blacklist of tax havens at the G20 gathering in 2009 was resisted by the Chinese premier on behalf of Chinese elites who, like other national elites keen to have political control but \u2018judicial separation\u2019 from their offshore centres, opposed the listing of notorious havens Hong Kong and Macau: see Treasure Islands: Tax Havens and the Men Who Stole the World<\/em><\/a>. The global elite is clearly in control with national governments and international organizations powerlessly doing as instructed. So complete is this control, in fact, that Brooks notes that, in Britain, \u2018Anti-tax avoidance laws had to be relaxed to accommodate companies\u2019 tax avoidance schemes.\u2019<\/p>\n

Brooks concludes that \u2018British taxation policy really had been so comprehensively captured by the world\u2019s biggest corporations that screw-the-poor policies… could be written into the statute books at their whim, without a pang of conscience being felt anywhere in Whitehall.\u2019 Clearly, however, his comment can be applied to virtually any government in the world.<\/p>\n

So does it matter to you that these tax havens exist and do what they do?<\/p>\n

What can be done about Tax Havens?<\/strong><\/p>\n

Authors such as Nicholas Shaxson and Richard Brooks suggest a raft of measures to correct the large number of \u2018faults\u2019 that facilitate the secrecy, protection from regulation and tax evasion that individuals, corporations, organizations, criminals and terrorists utilize in tax havens.<\/p>\n

For Shaxson, these include financial reforms such as \u2018blacklisting\u2019 of tax havens so that their rogue state status is public knowledge; greater transparency, for example, through government sharing of information about the local income and assets of each other\u2019s citizens and by requiring multinational corporate activities in each country to be made visible (rather than hidden behind \u2018international\u2019 figures); promoting the needs of developing countries which need their tax bases protected far more than they need aid or debt relief; confronting the British \u2018spider\u2019s web\u2019 of tax havens by abolishing the City of London Corporation and submerging it into a unified and fully democratic London; taxing an entire multinational \u2018group\u2019 as a single unit and then allocating the appropriate amounts of its income out to the different jurisdictions in which it was earned and allow it to be taxed as each jurisdiction decides; onshore tax reform such as a land value tax (because land cannot be moved offshore and so tax on it must be paid locally), and by a direct distribution of mineral wealth in any country to each of its inhabitants (who can then be taxed); tackling the \u2018enablers\u2019 \u2013 the accountants, lawyers, individual bankers, businesspeople \u2013 and not just the clients, so that they go to jail; rethinking the meaning of \u2018corporate responsibility\u2019 (because corporations are given a wealth of capital in public infrastructure, an educated and healthy workforce\u2026 with which to work) so that corporations are transparent about their affairs and pay tax as part of their corporate responsibility<\/em><\/strong>; re-evaluating the meaning of corruption \u2013 insiders abusing the common good in secrecy and getting away with it and so worsening inequality and entrenching vested interests and unaccountable power \u2013 so that we see, more clearly, all<\/em><\/strong> of the actors and their activities; and changing the culture that fawns over people who abuse the system for personal gain. See Treasure Islands: Tax Havens and the Men Who Stole the World<\/em><\/a>.<\/p>\n

And some progress appears to be occurring along lines he suggests. For example, a version of automatic information exchange (AIE), by which governments make sure that essential information is made available to other jurisdictions as a matter of routine, has been discussed by the OECD and, while full of loopholes \u2013 see \u2018Loophole USA: the vortex-shaped hole in global financial transparency\u2019<\/a> \u2013 some commitments have been made. For the list of commitments as at November 2018, see \u2018AEOI commitments\u2019<\/a>.<\/p>\n

However, the USA has not made this commitment and while Switzerland, for example, finds this objectionable \u2013 see \u2018The U.S. hasn\u2019t signed the AEoI Agreement: Reciprocity demanded\u2019<\/a> \u2013 the reality is that it makes little difference. For example, ICO Services<\/a>, which specializes in the formation of offshore companies and offshore banking, will assist you to get around the AEoI requirement. Their website advertises that \u2018asset holders need to start looking for alternative jurisdictions for protecting their assets. There are some reputable jurisdictions that are still outside the AEoI\u200a \u2013 e.g. Cyprus\u200a \u2013 \u200abut U.S. states of Delaware and some others shouldn\u2019t be dismissed.\u2019<\/p>\n

But if you want a more established name to help you take advantage of a tax haven in the USA, you really can\u2019t go past Rothschild & Co<\/a>. So, to check out what they are offering: \u2018Here Is Rothschild\u2019s Primer How To Launder Money In U.S. Real Estate And Avoid \u201cBlacklists\u201d\u2019<\/a>.<\/p>\n

Moreover, the AEoI agreement \u2018outlaws\u2019 bank secrecy<\/em> but not trust secrecy<\/em> (which dates from the Crusades) on which the British model is based \u2013 \u2018The Trust lies at the core of the British secrecy model\u2019 \u2013 so it does not address the cornerstone of British tax haven secrecy and explains why the British were happy to see the Cayman Islands commit to the AEoI. In short: the British government would be happy to kill off bank secrecy so that they can capture a larger market share (based on Trust secrecy). See \u2018The Spider\u2019s Web: Britain\u2019s Second Empire\u2019<\/a>.<\/p>\n

Separately from this initiative, in 2018 the UK parliament enacted a new law requiring its overseas territories \u2013 including notorious tax havens like Bermuda, the Cayman Islands and the British Virgin Islands \u2013 to start disclosing the owners of corporations they register by 2020. In theory: \u2018This could shut down a huge amount of offshore tax evasion and other financial crimes because individuals from anywhere in the world, including the United States, have long been able to set up secret corporations in these tax havens to stash their money.\u2019 See \u2018New UK Law May Shut Down the Biggest Tax Havens \u2013 Aside from the U.S.\u2019<\/a><\/p>\n

However, while the report pointed out that the new law obviously does not impact the USA (or, of course, Switzerland or \u2026) and the easy rerouting options available if these havens are effectively (or even actually) shut down, it failed to mention that this initiative does not in any way address the City of London Corporation so the impact of this initiative must be very limited unless it is followed by some pretty drastic initiatives in Westminster, Washington, Bern and elsewhere.<\/p>\n

In summary, while one cannot disagree with any of Shaxson\u2019s fine suggestions or be displeased that public pressure has led to some effort being made by the OECD and the UK parliament to address elements of the tax haven scourge, the reality is that the extent of the changes necessary are not going to happen without enormous grassroots pressure, strategically applied, and they are very unlikely to happen as reforms of the existing capitalist system. This is simply because the global elite is solidly in control of the institutions and processes of global capitalism, including its compliant governments and international organizations, and will readily stymie any attempt at serious reform of tax havenry particularly given the number of major reforms needed and the number of nations in which these reforms must be enacted. To state two obvious examples: The City of London Corporation has not existed for 1,000 years because it has no defense. And the changes noted above have only made the US more attractive as a secrecy jurisdiction.<\/p>\n

Meanwhile, with the aim of promoting \u2018financial innovation\u2019, Switzerland has recently made things easier for smaller financial technology companies thus making tax havenry more attractive to those who might not have otherwise considered it. See \u2018Swiss watchdog to propose looser anti-money laundering rules for fintechs\u2019<\/a>.<\/p>\n

So, given that most tax havens are protected by host government legislation and there is no international mechanism to control them, the tax haven industry generally is not under threat of being held to account in any significant way.<\/p>\n

And, despite the more elaborate explanation offered above, there is a simple reason for this. Unofficially, of course, illegal money, laundered through tax havens, has become an essential and sometimes stabilizing element of the global financial system. See \u2018Drug money saved banks in global crisis, claims UN advisor\u2019<\/a>.<\/p>\n

So what can we do that will make a difference?<\/strong><\/p>\n

Given the deeply entrenched and long-standing nature of this problem, clearly it needs to be addressed at various levels.<\/p>\n

Fundamentally, we can nurture our children so that we do not destroy their conscience. See \u2018My Promise to Children\u2019<\/a>. Remember all of those corrupt\/criminal accountants, bankers, businesspeople, priests and popes, lawyers and politicians that kept creeping up in the discussion above? The people who maintain the entire infrastructure that allows tax havens to exist and those who manage and profit from it too?<\/p>\n

Do they care about you? Do they care about the people in Africa, Asia and Central\/South America who starve as a result of the types of policies that allow tax havens to exist and function? Do they care about those driven into poverty and homelessness in modern industrial economies because vast sums are drained out of them and hidden in secrecy jurisdictions? Do they care about the people killed by the military and other violence from which they profit and then hide the proceeds to evade tax? Do they care about the Earth? Fundamentally, do they care about themselves?<\/p>\n

Of course not! But this is only because they are extraordinarily psychologically damaged individuals. See \u2018The Global Elite is Insane Revisited\u2019<\/a> with a more complete explanation in \u2018<\/a>Why Violence?<\/a>\u2019<\/a> and \u2018<\/a>Fearless Psychology and Fearful Psychology: Principles and Practice<\/a>\u2019<\/a>.<\/p>\n

If we inflict enormous violence on a child throughout their childhood to compel their obedience, how can we expect them to grow up to lead a life of integrity based on their conscience, courage, compassion, empathy and love? Those who use tax havens are truly \u2018poor little rich boys\u2019 (and girls). See \u2018Love Denied: The Psychology of Materialism, Violence and War\u2019<\/a> and \u2018Why Set Up a Shell Company in Panama? The Psychology Driving Illicit Financial Flows\u2019<\/a>.<\/p>\n

Beyond tackling the problem at its source however, we can also tackle manifestations of the problem but not by lobbying elites \u2013 and their political agents: there are no votes in it, in any case \u2013 to control this depravity for which they are well rewarded.<\/p>\n

For a start we can boycott all of the major private banks in favor of those smaller or member-owned banks that have a serious commitment to peace, justice and ecological sustainability, or we can seek out equivalent institutions like credit unions. We can also create public banks based on ethical principles. See \u2018What are Public Banks and How Do They Operate? An Introduction\u2019<\/a>.<\/p>\n

We can boycott large corporations \u2013 like Amazon, Apple, Gap, Google, Ikea, Microsoft and Starbucks \u2013 that use tax havens. None of these corporations is a monopoly: there are alternatives which can be investigated and employed, assuming we can\u2019t go without some version of the product or service they offer. Whenever you can, find a locally-owned outlet that offers a local product or service.<\/p>\n

We can boycott the Catholic Church. God does not ask that you morally or financially support a corrupt organization that doesn\u2019t understand or represent morality and spirituality. Remember, it was Jesus who threw the moneychangers out of the temple.<\/p>\n

If our conscience speaks loudly enough, we can decline employment by any organization that is unethical, such as those that use tax havens.<\/p>\n

We can refuse to gamble, refuse to buy the services of a sex worker (who might even be illegally trafficked into the work), refuse to buy the products of endangered species \u2013 see, for example, \u2018Killing Elephants \u201cfor Pet Food\u201d Condemned\u2019<\/a> \u2013 and refuse to use illicit drugs. These products and services are virtually always offered by industries controlled by criminal organizations so by buying them you are only harming yourself and\/or other people or species about whom you could choose to exercise a duty of care while also not contributing to the diversion of financial resources into tax havens.<\/p>\n

We can encourage unions, with members who work for organizations using tax havens, to take a stand on the issue.<\/p>\n

We can support existing organizations that work on the problem, preferably those that offer grassroots alternatives. The Tax Justice Network<\/a>, an \u2018activist think tank\u2019, and its sister organization, the Global Alliance for Tax Justice<\/a>, campaign for systemic change.<\/p>\n

If we are genuinely ambitious, we can develop comprehensive nonviolent strategies to compel particular individuals and organizations to desist from using tax havens or even compel countries to close down tax havens. See Nonviolent Campaign Strategy<\/a>. This can easily be part of a larger strategy to transform the global economy into one that satisfies human and ecological needs, particularly given the imminence of biosphere collapse, as noted above. See \u2018<\/a>The Flame Tree Project to Save Life on Earth<\/a>\u2019<\/a>.<\/p>\n

If violence and exploitation in all of their guises concern you, consider signing the online pledge of \u2018The People\u2019s Charter to Create a Nonviolent World\u2019<\/a>.<\/p>\n

So here is a final question for you to consider: What might the world look like if all those trillions of dollars were being shared and spent where they are most needed?<\/p>\n

_______________________________________________<\/em><\/p>\n

\"\"<\/a><\/em>Robert Burrowes, Ph.D. is a member of the TRANSCEND Network for Peace Development Environment<\/a> and has a lifetime commitment to understanding and ending human violence. He has done extensive research since 1966 in an effort to understand why human beings are violent and has been a nonviolent activist since 1981. He is the author of <\/em>Why Violence?<\/a> Websites: (Charter<\/a>)\u00a0 (Flame Tree Project<\/a>)\u00a0 (Songs of Nonviolence<\/a>) (<\/em>Nonviolent Campaign Strategy<\/em><\/a>) (Nonviolent Defense\/Liberation Strategy<\/em><\/a>) (<\/em>Robert J. Burrowes<\/a><\/em>) (<\/em>Feelings First<\/em><\/a>)\u00a0Email: flametree@riseup.net<\/a><\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

Tax havens are locations around the world where wealthy individuals, criminals and terrorists, as well as governments and government agencies (such as the CIA), banks, corporations, hedge funds, international organizations (such as the Vatican) and crime syndicates (such as the Mafia), can stash their money so that they can avoid regulation and oversight and, very often, evade tax. According to Nicholas Shaxson: \u2018Tax havens are now at the heart of the global economy.\u2019<\/p>\n","protected":false},"author":4,"featured_media":76959,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[40],"tags":[],"class_list":["post-129017","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-transcend-members"],"_links":{"self":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/posts\/129017","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/comments?post=129017"}],"version-history":[{"count":0,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/posts\/129017\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/media\/76959"}],"wp:attachment":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/media?parent=129017"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/categories?post=129017"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/tags?post=129017"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}