Saturday, 9 April 2016

The very rich and their taxes - systemic corruption impoverishing the UK

When the MPs’ expenses scandal broke, the airwaves were full of indignant MPs and their defenders explaining that charging the taxpayer to clean out a moat or build a duck-house was perfectly legal, and therefore, there was not really a problem. Here we go again, but this time the the British people have been ripped off on a scale billions - yes, billions - of times bigger.

On the all-important legality point, this is what Barack Obama said about the Panama Papers this week. “This is important stuff…A lot of it is legal, but that’s exactly the problem. …”  

Obama is right. The fact that there are laws in place which allow the very rich and only the very rich to cheat on their taxes is exactly the problem. What has been going on should be called “systemic corruption”.

This systemic corruption is hidden in plain sight. Everyone in the Westminster Village, all the politicians, advisers, journalists and the rest know very well how it works. Very rich people pay money and in return they get the tax loopholes they want.  

Of course, it is done with a degree of sophistication but that is essentially what happens. Journalists like Richard Brooks and Aditya Chakrabortty explain in some detail how it is done in practice.

No one really knows how much money the British  people have been legally cheated out of by the late father of David Cameron and others legal tax-cheats. But it is clear that the sum involved is huge. In his careful data-filled book, Capital in the Twenty First Century, Thomas Piketty says that on a global scale the amount of financial assets hidden in tax havens is probably 10% of the value of total global GDP and could be as high as 30%.

The group set up in 2010 with the purpose of getting very rich corporations and individuals to pay their proper tax, UKUncut, was so-named on the basis that if this were to happen, the Deficit could be paid off and there would be no excuse for the cuts that have blighted so many lives in the UK in the last 6 years. 

UKUncut based this claim on publicly available data and academic research and they may well have been right. The expenses scandal was small change. This systemic corruption has impoverished us all and, as always, the poor and vulnerable have been hit hardest. No wonder there is such anger.

And still, such is the culture of entitlement in our so-called elite, they just don’t get it. Or at least, not yet.

1 comment:

  1. Tom I would be interested to see you write about the Way the establishment works to have these arrangements made legal I know the work of the journalists but it would be good to see your take on it Also do you think that these issues play as a point of indignation with all of the British public or only some. ? Remember berluscini's thieving was by and large admired by his people.