Note: This blog uses humor to discuss serious issues, but don’t ever take it too literally.
I thought it was time to turn our attention to tax evasion, which is a big factor in the accumulation of the richest 1% worldwide. As Leona Hemsley (1920-2007) once memorably said to her housekeeper: ‘We don’t pay taxes. Only the little people pay taxes.‘ Though she only served a small part of her 19 year sentence:
Scale of the Problem
In March 2005, Tax Justice Network published The Price of Offshore, based on data from Boston Consulting Group; McKinsey’s; Merrill Lynch/Cap Gemini, and the Bank for International Settlements. This document estimated that the world’s High Net Worth Individuals (HNWIs) held around $11.5 trillion of assets offshore, which would generate a return of about $860 billion a year at a 7.5% rate of return, and a consequent tax loss of $255 billion (let’s call it $250 billion as it’s hard to be precise on this secret data) as a result of it being held offshore. In addition, there are estimated cross-border flows of global dirty money in a range between $1.1-1.6 trillion annually, about half from developing and transitional economies, and two thirds of which is commercial dirty money. So its big money and we the ordinary tax payer/aka ‘the little people’ pick up the resulting bill either through paying higher taxes than we need to or running a larger fiscal deficit. And these numbers are very conservative.
See the excellent blog: http://taxjustice.blogspot.com/
Location of the Problem
No two commentators can generally agree on a “list of tax havens”, but the following countries are commonly cited as falling within the “classic” perception of a sovereign tax haven.
- The Bahamas
- San Marino
- Cayman Islands
- City of London (OK maybe leave that one out as the island it is on is just too big)
- Delaware (OK let the FBI handle that one)
- Switzerland (too far from the sea)
- Ireland (hmm bad for Irish-American vote, leave well alone)
Well, we invadedIraqfor non-existent Weapons of Mass Destruction, so why not invade the tax havens, which represent known very real Weapons of Mass Financial Destruction via their tax evasion, and throughput of criminal, hot money. How on earth could we do that?
Well some far sighted Senior Officer in the US Marines had the amazing foresight to foresee the problem and as a result commissioned the Tarawa and Wasp Classes of amphibious assault ships that are almost perfectly designed to seize undefended tax havens (most of which are on small islands or close to the sea) and there are 8 of each class, so 16 to go round the tax havens, and four to spare, so we could invade them all at once! This is surely the most impressive piece of value for money anticipatory defense procurement ever and the amount of undeclared wealth seized should pay for the ships many times over. Like $11 trillion dollars would pay off the deficit. 🙂 QED.