That’s the theme this week as several leftist journalists, tax collectors, high tax crusaders and one professor dumped on tax havens.
I am not much of a believer in conspiracies, but in the last 48 hours anti-tax haven articles have appeared in the Financial Times, the U.K. Guardian & Observer, a New York Times blog, and The Nation. Opportunist have charged all offshore banks in general as being engaged in criminal conspiracies to launder dirty money and help the wealthy to avoid paying taxes.
The European Union Commissioner for Taxation, one Algirdas Šemeta, disclosed nothing new when he claimed in a speech that the EU will fight tax havens. “This is all about tax competition, tax fraud and tax evasion,” he claimed, lumping together for rhetorical purposes, legal and illegal conduct.”
The commissioner tells us: “Tax competition is accepted, and may even be a good thing, as long as it does not endanger the capacity of member states to collect the revenue that they would fairly expect.” Meaning we will ring every last dime out of you taxpayers.
Getting tough, he also reminded us that: “As for the fight against fraud and evasion, the EU agreed last year that bank secrecy will no longer be a reason to refuse cross-border cooperation. A dynamic approach on multilateral automatic exchange of information has now been launched.”
Twelve Is Not Enough
That “dynamic approach” means that the original standards set by the Organization for Economic Co-operation and Development (OECD) for tax information exchange requiring OECD defined tax havens to sign 12 tax information exchange agreements with other countries, no longer applies. The old rule was sign 12 TIEAs and you’re off the feared OECD black list and on the magical OECD white list.
One radical anti-tax haven crusader, Nicholas Shaxson, presages things to come: “The OECD should raise the bar on entry to its white list, to at least 60 TIEAs.”
He adds: “Even better would be a new system of automatic information exchange, as used in the European Union savings tax directive. The identities of those who control or benefit from companies and trusts must be on public record. Tax evasion must formally become a money-laundering offence and intermediaries caught helping must be sent to jail.”
Taxes Über Alles
Of course Mr. Shaxson has an axe to grind in that he has a pecuniary interest in selling his book about which few have heard, Treasure Islands: Tax Havens and the Men who Stole the World. From the title I think you can get the drift of his views.
Shaxson’s co-crusader is John Christensen, director of a letterhead group that calls itself the “Tax Justice Network,” about which I have commented before. (See No Justice In This Network).
The TJN’s major argument, supported by “facts” they conveniently invent to suit their needs, goes as follows: 1) the world’s richest folks supposedly are hiding $12 trillion of assets in offshore havens, mainly to avoid paying taxes; 2) these high-net-worth individuals are said to earn $900 billion each year from these hidden assets. Ergo claims TJN: Tax collectors of the world are losing $255 billion of taxes each year — enough to feed millions of starving children, cure hoards of old sick folks, educate all of Africa and even protect and neuter stray animals.[adcode]
For these leftist folks any excuse for higher taxes and less financial freedom and privacy.
A few years ago TNJ justified their radical demands by blaming tax havens as the major cause of the world recession.
Now they have seized on the lurid news that in 2010 General Electric earned $14.2 billion in international profits, including, $5.1 billion in the United States, but paid no U.S. corporate income taxes last year. And the reason for this is that G.E. took full advantage of the various tax loopholes in the U.S. tax code that are available to it. Wouldn’t you?
GE is not alone. Google used legal methods to reduce its 35% U.S. corporate income tax to just 2.4% saving $3.1 billion in U.S. taxes. And keep on mind you are the one who pays corporate taxes. The higher that tax is, the more you and I pay in higher prices for corporate goods and services.
As I have predicted many times during the last decade-long war against tax havens, the true aim of the Radical Left always has been the complete abolition of personal and financial privacy. Now they even demand laws that make tax evasion (which is already a crime) a double criminal offense of money laundering.
Indeed, high among these Leftists goals is the abolition of tax havens worldwide, an end to all financial privacy, automatic exchange of tax information among all national tax collectors, nullification of bank secrecy laws, and public records of all hitherto private beneficial ownership of trusts, foundations and corporations.
In other words, this is the radical, anti-free market, Left-liberal agenda espoused by Socialist politicians of welfare states like France, Germany, and the United Kingdom — and by the president of the United States, Barack Obama.
You Can Still “Go Offshore”
Notwithstanding all these left wing attacks on your financial freedoms, I continue to preach the gospel that for asset protection and investment you need an offshore bank account to keep assets outside the immediate jurisdiction of the U.S. government. While you are at it, you also might want to create an offshore asset protection trust (APT).
One of the major benefits of membership in the Sovereign Society is our extensive offshore banking advisory service and our banking connections in diverse jurisdictions. Join us.
The $54 Trillion Skeleton in Obama’s Closet
Nine months ago, this ex-Wall Street Journal veteran spotted an unusual pattern in a regularly published, though patently ignored government document. What he’s flushed-out is quite possibly one of the best-disguised paper trails in accounting history. Until now it’s been the State’s deepest, darkest secret. Click to find out why this maverick financial reporter believes this scandal is set to explode this month with strikingly devastating consequences for America…