MUST READ: Mossack Fonseca and Global Tax Avoidance – Economist Keith Rankin
Mossack Fonseca is just one of many firms who main raison d’être is to facilitate what some call “legitimate tax avoidance“. In the process firms like Mossack Fonseca may be facilitating tax evasion and money laundering. But their bread and butter is legal tax avoidance.
These firms are not the only facilitators of tax avoidance. It is our governments that make the laws that give so many opportunities for the rich to avoid their public obligations. Many governments do it openly, and these governments are not generally thought of as detrimenting their nations’ reputations; Ireland and Switzerland are among the most well-known for their corporate tax subsidies (Ireland) and secrecy (Switzerland). New Zealand – especially the Realm of New Zealand (yes, New Zealand has an empire) – is another of these polities.
(For a look at Ireland’s rorting of the global system, see my Ireland’s Economic Growth?, where I ponder how Ireland’s GDP managed to increase from 0.16% to 0.26% of world GDP in the 10 years to 2002. And guess what is driving Ireland’s present 9.2 percent growth rate? Large corporate tax subsidies to multinational businesses are good, for the moment, for the business of Ireland Inc.)
Many in the New Zealand mainstream media have been wondering, why the fuss if New Zealand laws facilitate rich foreigners to avoid their fiscal obligations in their own countries. Why is that our concern, they ask?
Imagine if we allow First Class and Business Class airline passengers to place undeclared and unscreened cargo in the rear cargo hold, as a privilege of their status. A few near-bankrupt airlines just might consider that this practice would give them a competitive advantage over their rivals, especially if they maintain the practice as an open secret. The privileged passengers might reason that the practice is OK for them because any damage to the aircraft that might take place would not affect them because the problem would be at the other end of the aircraft, next to the cheap seats. (Being privileged is not the same as being intelligent! See this famous David Low cartoon Phew, that’s a Nasty Leak, from 1932.)
Non-payment of taxes by the rich is severely detrimental to the global economy. New Zealand is a part of the global economy, so international tax-avoidance detriments us. If we encourage others to legally cheat on their own people, and encourage our people to help them cheat on their people, then the global market system fails (or, at minimum, becomes inefficient and unstable). When systemic failure happens, we all stand to lose: the aiders and abettors, the innocent bystanders who pay their taxes but also look the other way, and the billions of foreign victims whom too many of us care too little about.
The global markets and market economies have already failed as the wealth is concentrated in the top 1% of the worlds population meanwhile many are starving and most are living below the poverty line.
Is this a fair and equitable distribution of wealth and resources ?
Care for mankind has been tossed out the window ?
It seems very suspicious that this ‘ summit ‘ held in the UK… with Judith Collins attending… is held at this time…
And while some political heads might roll as well as criminal empires….doesn’t it strike you as all so convenient that if there was a new crackdown on all these tax havens … and with the repatriation of massive amounts of the worlds cash being recirculated ….
That it wouldn’t cause unprecedented inflation through commodity price re – fixing ?
And that it wouldn’t cause a massive run on banks , foreclosures of assets and business loans and mortgages reaching unprecedented interest rates?
And that global wealth would be repatriated back into the hands of the global banking elite , – which would ensure that the same situation that the Rothschild’s precipitated earlier in the 20th century – that of buying up assets and monopolizing business and controlling govt’s through loans and printing more money to cover those loans ( with interest on every dollar printed ) – before and after the 1930’s Great Depression,…
It wouldn’t happen overnight but over several years, .. then … all that would be needed was a series of incidents… ( middle east again , for instance with oil shocks? ) to tip this whole game end over.
We just might find the answer to this in the City of London… that 1 square mile of the worlds financial hub contained in the actual greater city of London …..
Stay tuned….
Or if your still confused about how it all works…
Watch your kids playing a game of Monopoly to see it in action…
‘ Verily…. from the mouth of babes ‘….
And perhaps a further article to wrap this whole thing up in case anyone is in any doubt here ….
http://www.huffingtonpost.com/avinash…/banks-cartel-money-laundering_b_4619464.html
The global markets and market economies have already failed as the wealth is concentrated in the top 1% of the worlds population meanwhile many are starving and most are living below the poverty line.
Is this a fair and equitable distribution of wealth and resources ?
Care for mankind has been tossed out the window ?
Yeah well… maybe I can put it simply in terms those those ‘ innocent bystanders who pay their taxes but also look the other way ‘ can understand….
Are you a murderer?
Most probably not. Last thing on your mind.
And yet you say you donate to international aid organisations?
You know the ones ,… that save pot bellied kids in Africa with flies crawling all over their mouths … or maybe those little tykes hobbling around with crutches because their legs got blown off in a land mine blast?
Or maybe your sponsoring a family in south east Asia or South America just so their kids can get an education so the family don’t have to live on top of a rubbish dump anymore ?
EIGHTEEN TRILLION DOLLARS , folks , – EIGHTEEN FUCKING TRILLION DOLLARS !!!!
More than the total combined wealth of the USA !!!
That is the amount that is estimated to be taken out of the global economy by these areswipes who think they are so fucking superior to the rest of you unwashed plebiscites by succeeding in putting that con job over you.
And how do they do it?
EASY !
A compliant global media employed by media moguls who give generous donations to political party’s if in return they only report story’s that put that political party in a good light!!!
Dumbing down and advertising revenues are king !!!
$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$
And those same political party’s are the ones who arrange affairs through banks to enact policies:
How? … example:
We have a PM at the moment who is a shareholder in the Bank of America – how DO YOU THINK he enabled tax cuts for the rich yet was able to pass legislation to squeeze middle and lower NZ for more punitive by ratio taxation and at the same time decimate our social services?
And then use our media to narrate a story about how we ‘ cannot afford funding so it has to be privatized” …….???????????????????????????????
Funny how the Bank of America was done recently for money laundering , isn’t it…
” Say what ? ”… you say ?- yes – it was !
And as for so many of the idiots who call themselves reporter’s in this country – here’s a case in point – although it must be admitted in conjunction with a gullible and naive political Left :
Key gets ejected from parliament yesterday and everyone goes ” Ooooo – look at that – Keys a bad boy too – first time ”!!!
And instead of seeing the pony tail pulling , shower pissing moron for what he is the Left falls right into it and lets itself be railroaded and subverted into focusing on that issue instead of keeping up the pressure on NZ being turned into a tax haven under Keys watch !!!!
And now the ball-less reporters breathe a huge sigh of relief and go ” whew”! …now we don’t have to risk our jobs !!!… now we can just focus on the circus in parliament instead !!! ”.
AND THAT’S HOW ITS DONE !!!!
And its as easy and basic and idiotic as that !!!
No wonder this country’s turned into a farcical remnant of what it once was.
This isn’t an issue of Left or Right either – its an issue of a stable , honest and transparent democracy which is translated into doing its part to contribute to a fairer and more equitable global economy. And as long as these conditions are enabled by a voting public who has allowed itself to be dumbed down by these sorts of arsehole’s we are going to hear more and more of it.
So the choice is yours and in your court.
Thanks for explaining things so clearly unfortunately 99.9% of the population do not have the ability to read between the lines and do not really understand how the world works.
It is like the inter relationships between the worlds arms manufacturers, oil companies and wars which occur around the world.
One word describes it GREED!!!
+100
Brilliant summary, thanks! That basic information should be front and centre in all our media to try and wake the morons up. Perhaps the depressing truth is that self-centred greed trumps (pardon the phrase) social conscience and the hope for a fairer, more equitable future for all? Perhaps a change of heart rather than a change of government?
Thank you, you’re right on the button there. Our media is useless.
The Tragedy of the Commons nears its inevitable ghastly conclusion.
(whose, not who, by the way)
“If we encourage others to legally cheat on their own people, and encourage our people to help them cheat on their people, then the global market system fails (or, at minimum, becomes inefficient and unstable).”
National are not just encouraging them to legally cheat, but also to buy our land, property, businesses and so forth.
Cheaters, come this way, invest in NZ, a pristine international reputation you can launder your money through!
PM’s own lawyer will help you out!! We guarantee no changes from IRD!!
Yes the Greedy will destroy all the good, as history is about to repeat the past.
These greedy grubby leeches, will be swallowed up in the cavity of the impending massive Global economic crash they helped to bring.
http://www.prepperfortress.com/finance-experts-warn-economic-meltdown-2016-global-financial-collapse-is-imminent/
Tax evasion is an inevitable conclusion of free market ideology. It is the culmination of greed and shunning of society by a few mega-rich money-hoarders. What follows is increasing poverty, degraded social services, and the Middle Class that has to borrow more (usually from the mega-rich money hoarders) to stay afloat.
We’re already seeing the first inkling of this in the Auckland property market as our kids are locked out of home ownership.
The really frightening thing is that so many New Zealanders can’t see what is happening in their pursuit for tax-free capital gains.
The Auckland Housing Ponzi Scheme is driven by offshore purchasing and a supply and demand problem, it is basic economics. The National Government trying to deny this is actually mind boggling ?
>> the Realm of New Zealand (yes, New Zealand has an empire) <<
Ae, as I've been trying to tell people for decades, "New Zealand" is not a country, it's a colonial occupation on behalf the British Crown, whose administrative umbrella includes Aotearoa, Rēkohu, the Cook Islands, Niue, Tokelau, and the Ross Dependency in Antarctica.
There is a great deal of hypocrisy around this issue:
Key and the National Party have fed Kim Dotcom to the FBI wolves for his alleged sins. Key and the National Party (and probably other parties) have been complicit in tax evasion for the 1%ers and money-launderers as outlined in the Panama Papers.
The USA led the indignation and hunting out of FIFA corruption where bribes and money were paid to individuals and groups to buy political favours. Lobbyists in the US do exactly the same to politicians and political parties, but the US turns a bind eye to their own backyard.
“Bank of America, Western Union, and JP Morgan, are among the institutions allegedly involved in the drug trade. Meanwhile, HSBC has admitted its laundering role, and evaded criminal prosecution by paying a fine of almost $2 billion. The lack of imprisonment of any bankers involved is indicative of the hypocritical nature of the drug war; an individual selling a few grams of drugs can face decades in prison, while a group of people that tacitly allow — and profit from — the trade of tons, escape incarceration.” http://www.huffingtonpost.com/avinash…/banks-cartel-money-laundering_b_4619464.html
“Oh what a tangled web we weave, when first we practice to deceive” – Sir Walter Scott (Marmion, 1808)