The so-called Paradise Papers confirm what those of us who have been looking at for tax havens for a long time have always known: which is that tax havens are places where those with wealth hide their money from view, aided and abetted by the lawyers, accountants and bankers who run these places.
It's precisely because the main aim of tax havens is to provide secrecy to those who would rather hide their affairs from legitimate view because they make use of companies and trusts that from 2009 onwards I, and others who are concerned about their impact on the world, renamed these places 'secrecy jurisdictions'.
I define secrecy jurisdictions as places that intentionally create regulation for the primary benefit and use of those not resident in their geographical domain with that regulation being designed to undermine the legislation or regulation of another jurisdiction and with the secrecy jurisdictions also creating a deliberate, legally backed veil of secrecy that ensures that those from outside the jurisdiction making use of its regulation cannot be identified to be doing so. No one has ever seriously challenged this definition. And there is good reason: that's because it is true.
The Paradise Papers raise important questions about these places.
They show that investments are made in ways people would not want to be known about if they had to be on public record.
They raise questions about the use, and abuse, of trusts.
They raise questions about the use of secrecy jurisdictions by politcians.
They pose questions about probity.
They let us ask about the role offshore lawyers really play.
The same could be asked of offshore accountants as well.
And those questions suggest that action is needed.
To require transparency in secrecy jurisdictions, including all those that that the Queen's head on their flag.
And to require regulation of offshore lawyers.
And of offshore accountants as well - including all the well known firms such as the so-called 'Big Four'.
And all the offshore banks - including most likely the one you have an account with, who may well have branches in many tax havens.
And the evidence is that action is needed to make sure that these places and those who use them are forced to pay tax, which is possible.
Minimum corporation taxes could ensure this.
So could worldwide wealth taxes that automatic information exchange from tax havens should now make possible.
And so too could the simple requirement that tax be deducted at source from all payments made from countries like the UK to tax havens like Jersey, Guernsey, the Isle of Man, Cayman, the British Virgin Islands, Bermuda, Gibraltar and beyond achieve this result if they will not cooperate in any other way.
The simple fact is secrecy jurisdictions exist to undermine fair competition.
And that they exist to undermine tax systems in countries like the UK.
And that they also exist to increase wealth and income inequality.
Now, when will something really be done about them? I've been working on this issue for fifteen years and I am beginning to think that's long enough.
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I think you’ve answered your own question at the end – you’ve been working at the problem from the wrong end.
It’s the US First Amendment and the technological skills of the hackers who are exposing the secrets.
They wouldn’t have looked if they have not been pointed in the right direction
There would be no solutions if a few of use had not been working on them since 2002.
There’s a 1998 report from the UN attacking tax havens that predates you by 4 years. I suppose it’s a figment of my imagination.
And I’m pretty sure stealing data on the rich and famous to sell papers began before 2002. Unless you know better.
There were no civil society organisations doing this before 2002
The claim is beyond dispute
And it was the OECD, not UN
In some quarters you will be granted no credit for your labours, Richard.
But I guess you have grown accustomed to that.
Aggregate all The UK dependents and territories and I sure we’d come out top for secrecy. Whose office is the City of London.
We do
See TJN financial secrecy index
I missed this panorama report but hope to catch it later. I am looking forward to hearing your interview in the program. I know you enjoy your TV contributions.
I am not in the programme
This may be obvious but I would also contend that offshore is a threat to democracy as well.
Courageous politicians would not allow this.
A system that can hide the movement and sources of funding is not helpful. Money is power. Power should be accountable. Tax havens ‘hide’ – they do not reveal. We know that money funds political ideas. We have every reason to be concerned.
We need to see who is blocking improvements at the Government level and target them to begin with. Name and shame.
You are right: it is a threat to democracy
Pigrim,
“Courageous politicians would not allow this”
Courageous politicians are an embarrassment to their parties and get little preferment. The only thing a politician of integrity can do is resign.
Look, if the Queen’s doing it it must be OK mustn’t it?
Tax Havens by Appointment to the Firm.
Expect your Royal Invitation to be to the Tower rather than Buck House, Richard.
I wonder where the arms dealers, the drug runners, the kleptocratic political leaders, the oligarchs and all the other scum skimming the poor, the needy, the starving, the unwell hide their money and I wonder who helps them do it? Answers on the back of Cayman Islands postage stamp, please.
I thought the Queen was head of state of many of those tax havens.
However, given that you keep telling us that government spending is not determined by tax, wouldn’t it be easier to reach for equality by creating money and distributing it via the tax code to ensure everyone had equal resources? I am sure I must be overlooking something otherwise you would have suggested it before. I am sure you will expose the gaping flaw in my thinking, as you always manage to do. It is difficult to keep up with you, sometimes, Richard.
Inflation
In a word
Tax exists to control it
So weimar Germany could have been taxed back to health?
The scenario was totally different
It was required to pay an impossible debt in a foreign currency that it had no chance of earning
Your comment ignores facts and as such makes no sense
And we’re still living with the consequences of a German nation having a collective volk memory of the Wiemar inflation.
It has profound effects on the working of the EU economy I think.
“…..tax havens like Jersey, Guernsey, the Isle of Man, Cayman, the British Virgin Islands, Bermuda, Gibraltar and beyond …..”
Why are so many of these offshore tax regimes in UK protectorates and former colonial footholds.?
Are Tax Havens a British invention? And are we still leading the field? Is this perchance what the ‘Special Relationship’ with the US is based on? Or do the Americans have their own arrangements?