At the heart of the intensifying debate about fairness and inequality is tax. Who can think without shuddering of the opportunity costs incurred by needy economies robbed of the tax to which they are entitled?
Well, yes, if you stretch a bit, you can say opportunity cost there. Tax not paid means revenue which the government cannot spend.
But if we are to consider opportunity costs then we’ve got to consider them all. What is the rise in revenue from having a larger economy as a result of tax dodging foreign investment? Standard economics tells us it’s really rather large in a developing economy. Possibly (and this is contentious, whereas “large” is not) more than 100% of the dodging actually.
The blacklist does not include any western country, even though accountants, lawyers, banks and much of the infrastructure that lubricates global tax avoidance are located in the west.
Note the rhetorical shift there. “Entitled” should mean tax evasion. A government is only entitled to the tax that the law says is due. Avoidance isn’t the same at all, is it?
The issue of tax avoidance is not going away.
Well, no, obviously not. It’s actually a right to organise your affairs so as to reduce your tax bill.
The EU, the UK and other countries could also ensure that no individual or company under their jurisdiction would be able to import or export any goods or services from designated tax havens. The UK is being asked to pay a fee to secure access to EU markets after Brexit; by the same logic, a fee should be demanded from tax havens in the shape of better transparency and accountability. Persistently aggressive jurisdictions might suffer travel and visa restrictions, or be denied the use of international satellites that tax havens rely on for communications and financial transactions.
Can you say colonialism? Picaninnies must do as we European say or else.