If you wonder why I and my colleagues argue for tax reform to benefit the poorest people in the world look at this picture:
That might, just, look like a meringue. It could look like a poorly made clay pot. It isn't either: those are mud cakes. As the Guardian has reported today:
In Cit?© Soleil, one of Port-au-Prince's worst slums, making clay-based food is a major income earner. Mud cakes are the only inflation-proof food available to Haiti's poor.
Brittle and gritty - and as revolting as they sound - [mud cakes aren't eaten] for the taste and nutrition - smidgins of salt and margarine do not disguise what is essentially dirt, and the Guardian can testify that the aftertaste lingers - but because they are the cheapest and increasingly only way to fill bellies.
"It stops the hunger," said Marie-Carmelle Baptiste, 35, a producer, eyeing up her stock laid out in rows. She did not embroider their appeal. "You eat them when you have to."
These days many people have to. The global food and fuel crisis has hit Haiti harder than perhaps any other country, pushing a population mired in extreme poverty towards starvation and revolt.
The UN's Food and Agriculture Organisation predicts Haiti's food import bill will leap 80% this year, the fastest in the world.
According to the UN, two-thirds of Haitians live on less than 50p a day and half are undernourished.
And I know that the Right will say this is all the consequence of corruption and political instability. But that corruption could not happen without tax havens.
This is the reality, and tax havens directly contribute. It's sickening to me. It's life and death in Haiti.
There's one further point to add: people can't leave because, as the report says:
The only thing stopping an exodus are US coastguard patrols, said Herman Janvier, 30, a fishermen on Cap Haitian, a smuggling point. "People want out of here. It's like we're almost dead people."
It's sick that tax havens and corporation tax abuse are premised on the free movement of capital when we condemn people to eating mud cakes by denying their free movement. That too contributes to poverty. It's why I've given up believing in the free movement of capital: those who propose it say it increases wealth. I disagree, it increases the wealth of a few, and guarantees misery to many. It can't be part of any new financial architecture.
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This is such a classic one-sided left-wing argument that it could be framed.
Alright. Where would these people be if there was no capitalism? If there were no corporations and no banks and no tax avoidance because there wasn’t any wealth being generated that you could then demand be given over to Governments across the world in the form of tax?
Can you seriously argue that there wouldn’t be extreme poverty in areas of the world such as Haiti, where (as you correctly point out) corruption and incompetence have led to utter failure to develop, were capitalism to be neutered?
No, the result would be that instead of some people being very poor and other people being very rich, EVERYONE WOULD BE VERY POOR. All of your political arguments seem to me to be based in some way on this faulty assumption.
You say that poverty in Haiti is (at least partly – you are not clear) the result of political corruption, and that said political corruption could not happen without tax havens. Do you blame tax havens for the ‘political corruption’ that led to the starvation of over 10 million people in China between 1958-1961? I would hope not.
My first problem with what you propose is that you assume that the profits of the corporations you attack necessarily belong to “the poorest people in the world”, by proxy of the states. There is no economic justification for stating this. It is not as though if it weren’t for the wealth of said corporations these people would be richer – EVERYONE WOULD BE POOR! The alternative isn’t some sort of equality utopia!
My second problem is your suggestion, and that of the Guardian article you link to, that were the money to be given to states rather than stashed in tax havens, said money would somehow fall into the hands of the peoples of countries like Haiti, rather than gobbled up by corrupt Governments. The reverse has been observed over and over again in developing countries. How much of the money will actually go to “benefit[ing] the poorest people in the world” and how much to building the umpteenth lavish palace? Modern-day case in point: Zimbabwe.
Maybe I haven’t represented all your points as you would wish in this response – but that is how posts like this come across.
Question that
You assume I am opposed to capitalism. I am a chartered accountant. I have run ten companies. It’s an odd assumption for you to make.
I am opposed to corruption. Tax havens anable corruption by providing the secrecy that veils it.
Of course there are other forms of corruption, bit contrast with old communist regimes is pretty irrelevant: mass abuse of populations knows no political divide.
I am not asking for nationalisation: I am asking that leaders do not steal from their states, major corporations do not assist them to do so, and that corporations pay the tax they owe. That’s about ethical government, politics and business. If you don’t agree with those things what are you for?
Of course it will never happen, entirely. But we can eliminate the corruption that tax havens deliberately facilitate and we can eliminate the corrupt banks, lawyers and accountants of this world who use those places.
I live in the world of pragmatic possibility. Your dogmatically based argument has no place there.
Richard
Reading your second and third lines, I can’t help but think you missed one of the main points of my post.
To put it in one sentence: What makes you so sure that the money is better, in terms of good to humanity*, in the hands of governments of countries like Haiti than in the bank accounts of multinational corporations?
When you say “corporations [should] pay the tax they owe”, have you considered that in some cases this might actually be the more harmful course of action – for instance if the Government who receives the tax money is going to spend it on arms**.
Not that I’m saying your necessarily wrong about all of this and that corporations are not up to no good a lot of the time – just looking for a bit of balance. My argument appears dogmatically based because I’m trying to provide the yin to your yang, as it were.
* Leaving aside the argument regarding avoidance/evasion etc
** Lets not get into the morality of the arms trade; that’s a quite separate issue.