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NEWNATIONS BULLETIN 15 JUNE 2011
Tax Havens
The Threat to Democracy
These aberrations of the modern financial and commercial world, were once widely thought to be peripheral and technical. Indeed long ago, perhaps before WWII, that might have been what they amounted to. Now the IMF estimates that a third of global GDP passes through small island tax havens.
In 2011 as our report shows, they are not only a major factor in the affairs of many of the world's top corporations, but an industry in their own right, sealed tight against the diffusion of information about their widespread activities.
This need for secrecy must have made them enormously attractive to the likes of Bernie Madoff, as they were to the US giant Enron that collapsed, with its affairs spread over 881 offshore subsidiaries, 692 in the Cayman Islands alone. Dictators from around the world, drug barons from South America, Asia, Russia, gangsters and extortionists of all stripes also tend to choose such favoured locations to hide their wealth from the authorities. They share that desire and these facilities with some of the world’s largest corporations and richest individuals, household names taking advantage of what is still legally available to them - such is their lobbying power in the nations in which they operate.
Our report collects and presents the sources of much of what is known in the public domain. Our concern pivots on the erosion of democracy by the continuation of these practices, which is demonstrated.
How can it be right that in the US in 2010, their largest Corporation, General Electric on worldwide profits of $14.2 billion, of which $5.1 bn was from US operations, paid no tax at all on these proceeds? The UK’s Barclays Bank didn’t do quite as well but in 2009 paid just 2.4% in tax of its £4.6 billion global annual profit.
We examine what is known, the cause and the effects - and sources of further information.
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