Remember meForgot password?
    Log in with Twitter

article imageUS, other wealthy countries block UN efforts to fight tax evasion

By Brian Booker     Jul 16, 2015 in Business
Leaders in the United States and elsewhere love to complain about international tax evasion. Millionaires and billionaires, they often argue, avoiding their tax bills. Turns out when it comes to action, however, government leaders are all talk.
When the United Nations sought to expand its power and ability to chase down tax evaders, numerous wealthy countries actually banded together to block the UN's efforts, which were backed by mostly developing countries. Tax evasion occurs in pretty much every country, with wealthy individuals sending their money abroad in order to hide it from the tax man.
The Congressional Research Service estimates that tax evasion costs the United States about $100 billion per year, a staggering sum, but only a small portion of all the money that is being shifted around the world. Global Financial Integrity estimates that nearly $1 trillion flowed out from developing nations alone as the wealthy and those engaged in illicit activities hide their money.
In some cases simply getting people to pay up won't work. When it comes to illicit cash flows, drug dealers and other engaged in illegal activities can't simply file their income on taxes, even if they should want to. In many cases, however, wealthy people engaged in legal activities also fail to report their income accurately and fail to pay taxes on their proceeds.
And while the U.S. is one of the most vocal critics of tax evaders, American officials also took the lead in shooting down efforts to expand the United Nations' powers. Reports indicate that the U.S. Treasury Department, in fact, was among the most vocal critics of the efforts.
Some arguments against expanded powers include the critique that the UN would basically be doubling the OECD's efforts to crack down on tax evasion. Critics note, however, that the OECD is too “cozy” with multi-national companies. Further, while developed countries may want to crack down on tax evasion, they likely don't want to give developing countries a full seat at the table.
For now it appears that the United Nations won't be leading any efforts to crack down on tax evasion around the world. This could set up a potential lose-lose situation for anyone not laundering their money.
More about United Nations, illicit outflows, Tax evasion
Latest News
Top News