- js reader version
- view hidden posts
- tags and related articles
by Silke Otsch
Tuesday, Oct. 20, 2015 at 12:13 PM
Multinational businesses cause the greatest losses through tax flight and tax avoidance. Between and trillion are invested in tax havens. Tax flight is a problem for democracy. Without tax revenues, politics renounces on creative possibilities.
TAX FLIGHT, TAX AVOIDANCE AND THE CONTRIBUTION OF THE RICH TO SOCIETY
By Silke Otsch
[This blog-article published on September 29, 2015 is translated abridged from the German on the Internet, http://blog.arbeit-wirtschaft.at.]
Parties that polemicize against refugees with cost-arguments promote tax flight of the rich as in advocacy of banking secrecy. Criticizing the rich is hardly encouraged although they profit disproportionately from tax flight and tax avoidance. This is a democratic problem. A coalition of elites influences legislation so counter-strategies should be followed.
THE RICH PROFIT DISPROPORTIONATELY FROM TAX FLIGHT AND TAX AVOIDANCE
Multinational businesses cause the greatest losses through tax flight and tax avoidance followed by rich private persons. Sums in the triple-digit billions up to one trillion euros are annually withdrawn in the European Union. Between and trillion are invested undeclared in tax havens out of worldwide private wealth of around 0 trillion… In the US, the top one percent of the population possesses 52% of corporate wealth. The rich profit indirectly from the tax flight and avoidance of businesses. Tax havens have an indirect effect on tax systems. They encourage lowering tax rates on business profits and on the general tax on capital income of 25%.
TAX PRIVILEGES THROUGH WEALTH AND GEOGRAPHICAL POSITION
Whoever can buy expertise and services of specialized technicians, banks, law offices or auditors can utilize tricks and tax havens. Until the turn of the millennium, black money could be hidden through simple techniques like accounts with banking secrecy. With expansion of information exchange, tax avoiders now need more expertise. Banks and law offices demand fees or minimum investment sums for this expense. The fees start at 500,000 euros. According to the tax flight model, the expense is worthwhile for investments of 5-10 billion euros. Experts assume tax flight increases among owners of massive assets.
Tax havens and businesses of the tax flight branch are above all in the global North… Poor countries have few resources to build functioning tax authorities. Multinational businesses and rich elites use their wealth for tax minimization. Advances in regulating tax flight benefit states of the North first of all. International tax affairs involve the OECD, the “Club of the Rich,” not the UN.
TAXES, DEMOCRACY AND THE POWER OF DONORS
Tax flight and avoidance is above all a problem for democracy. Public services like education, health care, infrastructure, culture or social services are available to many citizens. Without tax revenues, politics renounces on creative possibilities. Politics should implement long-term projects and speed up innovations. Without state investment programs, the Internet, GPS and the touch-screen would not exist. Funds can have macro-economic effects like economic measures or resource distribution around different groups of the population. Funds are allocated in the economic cycle between the real economy and financial wealth. In Austria, taxes reduce inequalities in the primary distribution of resources…
According to the theory of critics of taxation, businesses would give on a voluntary basis when taxes are lowered. However facts demonstrate the opposite. Donations are far below the saved tax funds, even in countries with high fundraising revenue like the US. If two percent of the Austrian GDP is lost through tax avoidance and flight, that is equal to 5 billion euros…
Even higher repayment in the form of donations should be judged as ambivalent because donors exert social-political influence. The influence of the US billionaires Charles and David Koch is a frightening example. These two influence politics through think tanks, donations of billions in election campaigns, support the Tea Party and organizations denying climate change.
MANIPULATION OF LEGISLATION BY THE OFFSHORE COALITION
Non-observance of tax laws is not because of the complexity of tax systems or location competition. A coalition of the beneficiaries influences legislation in the long-term with intensive support from other social forces. This offshore coalition includes:
• tax fugitives and evaders motivated by financial advantages and money-washing possibilities
• service providers (banks, law offices, auditors) with interest in income and (labor-) markets
• politicians who expect potential support by financial- and economic elites, avoid conflicts, act ideologically or are poorly informed
• lobbies and think tanks that inveigh against payment and ideology-driven conduct
• bureaucracy and authorities that are hindered in carrying out their activity, cooperate with the regulators and expect financial incentives (change of job, corruption)
• journalists and academics who offer justifications through convictions, financial incentives (advertisements, royalties or career advantages)
• voters who tolerate practices out of opportunism or ignorance.
Changing practices requires a long breath because organized and well-supplied organizations and groups of persons have great interest in maintaining offshore services. Alongside fighting tax avoidance and flight, the primary distribution of incomes and assets should be intensely leveled so inequalities do not first arise. Tax systems should be simplified and harmonized with minimum standards. Politics should plead offensively for public funds. These funds are needed for a social-ecological transformation on the national plane and for the North-South perspective.
Citizens for Tax Justice, “Offshore Shell Games 2014,” The Use of Offshore Tax Havens by Fortune 500 Companies, 56 pp
Report this post as:
Change Links September 2018 posted
More Scandals Rock Southern California Nuke Plant San Onofre
Site Outage Friday
Change Links August 2018
Setback for Developer of SC Farm Land
More problems at Shutdown San Onofre Nuke
Change Links 2018 July posted
More Pix: "Families Belong Together," Pasadena
"Families Belong Together" March, Pasadena
Short Report on the Families Belong Together Protest in Los Angeles
Summer 2018 National Immigrant Solidarity Network News Alert!
Watch the Debate: Excluded Candidates for Governor of California
Change Links June 2018 posted
The Montrose Peace Vigil at 12 Years
Unity Archive Project
Dianne Feinstein's Promotion of War, Secret Animal Abuse, Military Profiteering, Censorshi
CA Senate Bill 1303 would require an independent coroner rather than being part of police
Three years after OC snitch scandal, no charges filed against sheriffs deputies
California police agencies violate Brown Act (open meetings)
Insane Company Wants To Send Nuke Plant Waste To New Mexico
Change Links May 2018
Worker-Owned Car Wash on Vermont Closed
GUIDE TO REBEL CITY LOS ANGELES AVAILABLE
lausd whistle blower
Help KCET and UCLA identify 60s-70s Chicano images
UCLA Luskin: Casting Youth Justice in a Different Light
Change Links April 2018
More Local News...
Cybermonde, cyberguerre, cyberespace, cyberterrorisme
Paraphysique de psychosomatique
Chuck Grassley: Women Abusing, Animal Murdering, Illegal War Supporting Criminal
Finance Capitalism and the Digital Economy
Muselières syndicales, muselières patronales
Jeff Bezos, Amazon, The Washington Post, Whole Foods, Etc
Why Choose Nut Milk Over Cows' Milk
Antrhopocène, le grand effondrement
The Dictatorship of Corporations
18 Lethal Consequences Of Hunting
Paraphysique de l'outplacement déontologue
Shopping du bashing
After Lehman Brothers, Experts Say Global Financial Crisis Can Happen Again
“Animaniacs in Concert!” Starring Voice Legend Rob Paulsen
Probabilités de fin d'humanité
Florida Area of Migrant Farmworkers Denied Right to Construct Health Clinic near NaplesCIW
Steer clear of work morality!
The Shortwave Report 09/07/18 Listen Globally!
August 2018 Honduras Coup update
Brett Kavanaugh Filled The 5th Circuit With Execution Judges
Augusta Georgia Woman Gets 5 Year Prison Sentence for Writing About Russians Crime Acts
Paraphysique de contextualité
Crisis Regulation in Global Capitalism
Ex-voto de réification
Please Oppose Warmonger, Execution and Torture Supporting Bush Operative Brett Kavanaugh
Paraphysique d'exploitation occultation
Ryan Zinke Is Charging Taxpayers For A Trophy Hunters' Council
More Breaking News...