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The Recent Revelations of the Panama Papers Come as No Surprise - Will These Offshore Havens Finally Be Taxed? I Doubt It

13/04/2016 11:49

The recent revelations of the Panama Papers come as no surprise. As a Comparative Politics student at the LSE in the 90s I did a course on Corruption and quickly learnt that the culture of hoarding and hiding wealth, often obtained illegally, was endemic and still is. Working in the developing world I have seen the blatant wealth disparity between the super rich and super poor first hand - a gulf that has become unbridgeable. These differences in wealth are becoming more acute in countries like the UK, but with it comes a culture of acceptance that the super rich rule the land and always will.

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'Something stinks at the heart of London', photo taken from the top of the Shard

A friend of mine wrote to me from Bangladesh and said, 'We also have people on the (Panama Papers) list and no one seems to care enough.'

Corruption is rife in Bangladesh and the structures of accountability are not in place therefore people have become indifferent knowing that those that commit financial impropriety do so with impunity. Most countries that feature on the list include the richest 1 percent. Prominent figures from China, Iraq, Russia and Pakistan have all appeared. With expensive lawyers at their disposal they can make it hard to penetrate the intricate web they weave to protect their vast accumulated wealth. Fortunes have swelled to gargantuan proportions by tax avoidance, thus denying those countries precious finances that could be spent on schools, infrastructure and hospitals. What these people do with their wealth beggars belief, how many mansions can you buy, how many jets, how much useless stuff can you accumulate? Obviously a lot.

What it confirms is that democracy is a sham as the affluent wield their influence to ensure politicians acquiesce and protect their interests, which are diametrically opposed to the interests of the common man. This practice is occurring the world over, including the UK. Cameron is complicit in protecting the interests of this top 1 percent; well he is part of that elite club, isn't he?

When the 2008 financial crisis hit and people were outraged by the cowboy antics of bankers not much was done to hold them to account or reform the system, instead the government printed money and the UK citizens, albeit reluctantly, footed the bill. We were told they were too big to fail. For the super rich to be taxed on their billions and for all these offshore accounts to be investigated we need radical action - now. But we would be naïve to think that the system will be reformed and those that have been avoiding tax and hiding their assets will cough up happily.

For the rest of us, we can't hide what we earn, it's peanuts by comparison, but still they tax us and expect us to pay and most of us do, unless we are dodging the system. On the one hand you have the black economy, low paid workers being paid cash in hand or unscrupulous individuals milking the benefits system taking advantage of the glaring loop holes. At the other end of the scale the very richest of our society are loathe to pay what they owe on their stashed billions. We have a system of disparity and inequity that is just not tenable or healthy instead it breeds resentment and is not working.

If Osbourne did ensure that the taxman was able to access these hidden funds sitting cozily in offshore havens surely that would be one way to tackle the deficit rather then these heinous and incessant cuts that are hitting the most vulnerable of society.

What the Panama Papers highlights is that if you have money you have power. If you have billions you are above the law and you can operate by your own rules and flaunt your spoils, too.

People in London were justified in their protest, but will Cameron resign? Of course he won't. He's published his tax returns, others are following suit, but all this is superfluous because naturally his taxes show that everything is above board, he was careful to sell off his offshore tax haven shares worth 30K in a trust set up by his late father to avoid wagging fingers.

This sudden practice of tax transparency is a small step in the right direction, but it's loose change compared to the funds that could be acquired by properly taxing the super rich. Funds that could be used to transform the country and lives of those that need it most.

Will the furore of the Panama Papers simply die down and we return to the perpetuation of the status quo, with the global super rich club breathing a huge sigh of relief that they have got away with it again? Think how different the world would be if everyone emulated Buffet and Gates and did the sensible thing by giving away the vast majority of their useless accumulated wealth rather than stashing it.

Wealth, if it is hoarded, is another form of junk. Wealth if it is utilsed for the wider good can transform the world, diminish inequity and poverty and make lives, which are utterly miserable, a little bit better.

Post Thatcher we live in a world that is about the elevation of the individual and the accumulation of the wealth of the individual and the protection of the self interests of the individual at the expense of others. We live in a world that is governed by the wild fluctuations of the free markets, where decisions are based on short-term profit rather than long-term investment, and vast accumulation and secrecy rather than transparency. Without these structures of accountability at the top of the pyramid of our societies there is no democracy in the real sense, instead this culture of insidious corruption and avarice will trickle down and permeate all levels of society, which is what we have seen in countries from Bangladesh to the UK. In conclusion, the system as it stands makes a mockery of our democracy and stinks.

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