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article imageOp-Ed: Can closing tax havens really feed the world?

By Alexander Baron     Jun 22, 2013 in Politics
Shut down the world's tax havens, and global hunger will disappear. That is the message from the recent G8 Conference. If only.
A report that appeared on page 13 of the London freesheet Metro on June 10 is typical of the propaganda we are now being fed by both our leaders and charities.
Closing tax havens will feed world' it claimed.
A coalition of no fewer than 200 charities is said to be urging this, and if David Cameron succeeded, malnutrition could be "wiped out across the globe", because this would free up £100 billion a year.
This sort of rhetoric plays well with the man in the street, the housewife, the unemployed...but how true is it?
The Russian news website RT Dot Com reports that "some $18.47 trillion is being held by individuals in tax havens around the world. Of this some $7.18 trillion is in accounts situated in British Overseas Territories and Crown Dependencies."
This is said to be an estimate by Oxfam; we are not told how this figure is arrived at, nor how credible it is, but it sounds good, doesn't it?
We should ask though, do charities really want to close tax havens, or just other people's tax havens? because these organisations benefit enormously from the current tax system. When wealthy people and corporations donate to charities, there are benefits for both parties.
Furthermore, many organisations that have charitable status are not what most of us would call charities. There are numerous organisations that carry out research and disseminate their findings either to the world or to more select groups, but are they really charities? Certainly they are for the people who operate them. This list is a bit dated, but it shows the sort of salaries the CEOs of the bigger charities are paid, and this is only for the UK.
What is needed is not to close tax havens but to simplify the tax laws and reduce taxation. This could be done overnight by the implementation of Islamic finance principles or something similar.
If banks were not permitted to pay interest, depositors would either have to leave their money in non-interest bearing accounts or put it to work by investing in wealth-creating businesses. Among other things, this would greatly reduce the national debts of all nations and taxation would if not disappear entirely then be greatly alleviated. Taxation is cumulative, so a large reduction in say fuel duty would have an even larger effect across the board. It would mean not only putting more money into the pocket of the motorist but would reduce transport, production and distribution costs for supermarkets, manufacturers and many others.
On the other hand, tighter monitoring of so-called tax havens would require more law enforcement, more laws, and less confidentiality. This in the age of Assange and Snowden.
The choice is simple, which would you rather have? And don't for one moment think this projected clampdown is something that concerns only the super-rich or big corporations. Corporations have shareholders, and if you have a pension, then indirectly, that probably includes you.
This opinion article was written by an independent writer. The opinions and views expressed herein are those of the author and are not necessarily intended to reflect those of DigitalJournal.com
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