Junius 160 - taxes and tax dodging

You might want to note the fact that the Bush II administration dropped efforts to eliminate or minimize the effects of off-shore tax dodgers.

Junius, fils
The American People
1 October, 2012
Ladies and Gentlemen:

Let’s get back to the report by Mr. James Henry titled “The Price Of Offshore Revisited.” From the press release of Mr. Henry’s The Price of Offshore Revisited, we learn that “at the end of 2010 the top ten private banks alone collectively managed more than $12.1 trillion in cross-border invested assets for private clients, including THEIR TRUSTS AND FOUNDATIONS.” (Emphasis added) Also, “the three private banks handling the most assets offshore are UBS, Credit Suisse, and Goldman Sachs.” Of the money hidden offshore, to summarize from the press release, the amount is huge, “enough to make a significant difference to all our conventional measures of inequality,” and it is growing. “The lost tax revenue implied by our estimates is huge.” “It turns out that this offshore sector – which specializes in tax dodging – is basically designed and operated, not by shady no-name banks located in sultry islands, but by the world’s largest private banks, law firms, and accounting firms, headquartered in First World capitals like London, New York, and Geneva.” Finally, Mr. Henry finds it scandalous that the International Monetary Fund and other international financial institutions have not studied this situation. By implication, he finds it scandalous that governments have allowed it to operate.

I have established that much of the bellyaching done by the Republican Party on behalf of their corporate owners revolves around just how TERRIBLY, HIGHLY TAXED the little corporate dears are. This is bull. They get tax and other breaks in order to “remain competitive” and to prevent them from having to “ship jobs overseas.” They then ship the jobs overseas anyway. Then, they, as people and as corporations (and corporations are people too) take advantage of tax havens to avoid taxes on much of their profits. Then, when anyone suggests that they pay their fair share, they first snivel and then threaten to move overseas. They, as people and as corporations (and remember, corporations are people too), oppose any measures to increase those taxes they DO pay and any measures which may prevent them from ripping off the rest of the world.

Now, let us address any objections to Mr. Henry’s report. I have found that the objections are just the usual bushel basket of lies, distortions, cop-outs, and ad hominem attacks super-glued to the usual ignorance and stupidity. The most common objection is the assertion, without anything remotely resembling proof, that the report is wrong. Now, it is perfectly acceptable to not agree with the report, but to claim that it is wrong without pointing out where it is wrong is simple mental flatulence. Another objection is to state that the report makes the claim that only a few individuals are responsible for these off-shore deposits and to then claim that this is impossible. A little effort involving reading comprehension proves that Mr. Henry is not talking about a “few” individuals. He is talking about “QUITE A FEW” INDIVIDUALS, LOCATED WORLD-WIDE. Then, whoever making this objection states that no evidence was presented that they had done so. It would help if anyone making such an objection actually read the report, which contains just such evidence. The existence of off-shore tax shelters proves such activities not only possible but actual, and the rest of the world is hardly responsible for the mental insufficiency of anyone doubting this. I have demonstrated, quoting references, not only that this is done but, without going into much detail, HOW it is done. If you want details, buy the books I used and read (or have someone read to you) what the books say. Not liking the truth does not make it any less the truth.

Many of the objections are simply a rehash of the traditional GOP tactic of attacking the source – ad hominem attacks. If you cannot (or are too stupid and/or lazy to) refute statements, attack the author. He has AN AGENDA or AN AX TO GRIND, or he is (are you ready for this) a MARXIST or A SOCIALIST!!! In support of this hallucination, the common tactic is to invent lies about advocating “confiscatory taxes” or having “weird” economic views. Of course, people accusing their opponents of “weird” economic views usually hold economic views more appropriate to residents of the local odditorium. Another tactic used is to triumphantly point out that the sources Mr. Henry (and I) have used made use of data from INTERNATIONAL ORGANIZATIONS!!! So what? Oh, yes. I forgot. We all are supposed to be terrified of international organizations – the new world order and that sort of thing. The issue of tax shelters is an international one. Data concerning (international) tax shelters comes, largely but not exclusively, from international organizations. To the sane, this makes sense.

The basic truth of the matter is that Mr. Henry (and the other sources I have used) have presented verifiable (verifiable by the literate, that is) facts to back up their claims. The GOP attack chipmunks simply don’t like the findings. Finally, the old “class war” schtick is trotted out. Anyone wanting rich people to obey the laws the same as everyone else ENVIES THE RICH and wants to take away their hard-earned dollars, dollars earned by speculation, shady deals, and out and out theft. As for envy of the rich and class warfare, would someone please tell me just who the hell CAN play around with that much money who IS NOT rich? While we’re at it, there is a book on the subject of these poor, mistreated, demonized, rich people: Frank, Robert. Richistan, A Journey through the American Wealth Bloom and The Lives of the New Rich. New York: Three Rivers Press, 2007. (P). All of them can and many of them do spend more on luxuries than the rest of us earn through years of work. They also can afford the services of lawyers and accountants to avoid taxes, and most of them do so. As for the rest of us? Well, we’re just freeloaders. “The overwhelming majority of voters who back President Barack Obama do so because they are ‘dependent on government’ and ‘believe that they are entitled to health care, to food, to housing,’ Mitt Romney told a closed-door gathering of about 30 major donors earlier this year, according to video of the event that has surfaced on the Internet.” (http://www.huffingtonpost.com/2012/09/17/mitt-romney-video_n_1829455.html?utm_hp_ref=politics and many other sources, to include videos of the Mittster making that statement). While this attitude is typical of the Republican Party and many of the business community, it does not constitute anything even remotely resembling ethics, morals, religion, or qualification for the office of the Presidency, an office which is supposed to represent ALL of the people, not just those with bank accounts in off-shore tax shelters. Tell me, no, tell US, Mr. Romney – which are we now – sparrows or raccoons? Your father, sir, was an honorable man. Heredity, it seems, doesn’t work.

Back to taxes. Moving right along, attempts to close the loop holes have failed. “How could the leading industrial countries allow these small jurisdictions to rise and flourish? Well, they did and did not. Countries such as the United States, UK, France, and Germany sought from time to time to close certain loopholes, pressuring this or that tax haven to change some or its rules and policies. There were some feeble attempts, dating back to the interwar period to try to develop a coordinated international response to tax havens. But frankly, not much was accomplished. Worse, the very same countries with the possible exception of France and Germany, were major players in the development of the tax haven phenomenon after World War II”( Palan, Ronen, Richard Murphy, Christian Chavagneux. Tax Havens, How Globalization Really Works, Ithaca, NY: Cornell University Press, 2010. (P), Pages7-. Here, let me first explain a few short titles. EU means European Union. Most of you knew that. OECD is probably new to you. It means the Organization for Economic Cooperation and Development. The OECD originated as the OEEC, the Organization for European Economic Cooperation, in 1948. It has, as its purpose, the advancement of economic progress and world trade through the encouragement of democracy and world trade. As relates to tax havens, “While the OECD campaign was largely in the doldrums, the EU has emerged as the effective leader in the global struggle against tax havens – a mantle unlikely to pass to the United States despite the results of the November 2008 election. The issue was certainly known to both the Clinton and the George W. Bush administrations, and the former was one of the drivers of the multilateral efforts against tax havens. But one of the first acts of the Bush administration was to withdraw support from multilateral efforts to combat harmful tax competition. The new Obama administration is an entirely different kettle of fish. As a senator, Barack Obama played an important role in various initiatives to combat tax havens. Once in power, he signaled important changes in policy allying the United States with France and Germany in the fight against tax havens.” (Palan, Page. We can, however, go further back in time. “U.S. officials have periodically tries to crack down on offshore tax abuse, at least since 1961, when President Kennedy asked Congress for legislation to drive these tax havens ‘out of existence,’ but have been thwarted each time by powerful interests on Wall Street.” (Shaxson, Nicholas. Treasure Islands, Uncovering the Damage of Offshore Banking and Tax Havens. New York: Palgrave Macmillan, 2011. (H), Page20)

Just in passing, another quote from Palan, this one on Page 240, is in order. “Yet there are reasons to believe that some havens (especially those closely linked to major financial centers, such as Cayman with New York, Jersey with London, and Switzerland with both) have moved beyond mere booking locations and become significant nodes of investment banking.” Just thought I’d mention it. Investment banking…wasn’t that the field in which Mr. Romney made his millions?

No wonder the Republicans oppose such efforts. Of course, the GOP has demonstrated that they oppose ANYTHING proposed by the Obama administration, even policies they once advocated (Romneycare/Obamacare/health care reform comes to mind). Still, in this case, international efforts to shut down or, at least, minimize the harm done by tax havens would be BAD FOR BUSINESS (excuse me, BIDNESS)! Heavens to Milton Friedman, people (and, remember, corporations are people too) might have to close down their Swiss bank accounts or their accounts in the Cayman Islands. Add to this, the famous tendency of the GOP to undergo carefully orchestrated bowel movements at the very mention of any sort of international involvement with or control of anything relating to the United States. Such acts MUST be part of that NEW WORLD ORDER and must be a threat to our sovereignty. I should modify that a bit. The GOP opposes any international involvement which they do not control. If they (or their owners) can make a profit out of it, then it’s OK, the rest of the world be damned.

To be continued.

I am, Ladies and Gentlemen,
your most humble and obedient & etc

Junius, fils