by JOHN FEFFER
The wealthy rob governments of at least $200 billion a year in lost tax revenues. It’s time to force them to pay up.
The rich have always flaunted their wealth. It was rarely good enough to enjoy financial success, you had to be conspicuous about it.
They build enormous homes for everyone to gawk at. They throw lavish parties. They commission paintings, statues, biographies. They endow institutions so that their names can live on in granite forever.
At the same time, the rich withdraw into gated villas, travel in their own private jets, and buy their own Picassos so that they don’t have to mix with the hoi polloi at museums. The rich want us to know about their wealth, but they also want to be left alone to enjoy it. They engage in an enormous game of peekaboo with the public. Now you see my wealth, now you don’t
In our globalized era, this game of peekaboo has become a vast enterprise. Enormous fortunes are generated by multinational operations and transnational financial flows. The profits in turn are protected by a baroque system of secret bank accounts and tax shelters. The rich will give away their money, occasionally, but as little as possible to governments. Their gifts to private charity are often just another way of robbing the public. Global tax shelters, meanwhile, are grand theft.
The recently released Pandora Papers, a trove of nearly 12 million documents, shines some light on the mechanisms by which the wealthy squirrel away their gains. One example jumps out: Tony Blair.
The former British prime minister and his lawyer wife Cherie purchased a multi-million-dollar townhouse in London as her office but did it in such a way as to avoid paying a tax on the sale. In this offshore financial sleight of hand, they skipped out on paying several hundred thousand dollars to the very government over which Blair once presided.
The maneuver, which was perfectly legal, is salient for two reasons.
First, Blair himself had initially railed against tax dodges of this nature. “Offshore trusts get tax relief while homeowners pay VAT on insurance premiums,” he said as Labor Party leader. “We will create a tax system that is fair which is related to ability to pay.”
Second, Blair celebrated a “third way” that was supposedly an accommodation between socialism and capitalism. When it came to global markets, Blair wanted “to remove regulatory burdens and to untie the hands of business,” as he put it in a celebrated 1999 speech.
It’s no surprise, then, that he took advantage of the very mechanisms that he initially opposed and subsequently facilitated through deregulation.
Blair is by no means alone in his opportunism. The Pandora Papers are full of politicians who campaigned on anti-corruption platforms and are now being hoisted by their own petards.
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