Follow the rich- The scourge of Tax Havens
Hidden tax havens controls almost a tenth of the world’s financial wealth. Tax evasion by the super rich has pushed trillions of pounds out of government’s reach. This book is must read for all those interested in Future of democracy, inequality and global justice. This book provides the fascinating history of tax havens and what we can do about them, and tax havens are one the key driving points for rising inequalities of wealth in the world, and real threat to democracy.
The investigation in to the secretive activities of the off-shore accounts can rescue debt-ridden economies and reverse the trend of rich becoming richer and poor are getting poorer day by day.
This is the message by Assistant Professor of economics Gabriel Zucman’s latest book published by Chicago University Press ” The Hidden Wealth of Nations” is trying to convey. This book has foreword by Thomas Puketty author of bestselling “Capital in the Twenty First Century” who hails Gabirel’s plan for tackling tax havens. He has broken new ground which even eminent economist Adam Smith would be proud of, as he charts the offshore world of countries’ international investments, which by conservative estimate can surpass $7.6tn £5tn is held in tax havens including the Swiss bank accounts, Luxembourg and British Virgin Islands.
The poor working class has to pay tax by the pay as you earn scheme, while the rich hide their undeclared wealth which could amount to $200bn £130bn. Zuc,am’s estimate that 80 per cent of the assets are undeclared. Cash-strapped government have already pursuing culprits of tax evasion and avoidance, as they have sought to address rising tensions over austerity and inequality. Zucman thinks proposals for the reform of corporate taxation by the Paris-based Organisation for Economic Co-operation and Development are “unlikely to enable much progress”.
The Foreign Account Tax Compliance Act in the US and similar initiative elsewhere on automatic exchange of tax information is the right step forward according Zucman. However, there are some havens who refuses to co-operate and speculate that the regulation might be side-stepped by renegade banks and new computer technologies.
Zucman wants to strengthen information exchange with a worldwide public register of financial wealth, recording ownership of shares and bonds, with threat of massive sanctions on those countries who refuses to comply. With the World financial register in place, it would be easy to impose a wealth tax at source.
According to Zucman European’s have hidden wealth upto $2.6tn £1.7tn and the larger debts which some governments are struggling to service. A register of owners of companies and trusts is about to be set up under the EU anti-money laundering rules.
Attacking the tax havens are better than the Labours proposed mansion tax for ratcheting up taxation on the rich, as more information on offshore assets the harder for them to defend.
The Hidden Wealth of Nations the Scourge of tax havens by Gabriel Zucman
Chicago University Press £14/$20
142 pages