Get Red Pepper's email newsletter. Enter your email address to receive our latest articles, updates and news.


‘Paradise Papers’ tax dodgers should be behind bars for the world’s biggest robbery

The global elite have been stealing from society on an unprecedented scale, writes Tom Walker

November 7, 2017
5 min read

I have a question about offshore tax havens that no one has ever been able to answer. It’s not a riddle – it’s simple, really. It is: can you name one legitimate reason to keep your money in a tax haven? 

The media keeps implying that there must be one, as they point out (mostly to avoid the libel laws) that using a tax haven does not necessarily involve illegality or ‘wrongdoing’. But what form of activity that isn’t wrong could possibly involve stashing your cash offshore? Or more precisely – why should we shy away from saying that starving the public purse of money is itself wrongdoing?

In the Paradise Papers leak, the super-rich and global corporations have been caught masked up, carrying a gun and revving up the getaway car with a bag of money marked ‘swag’ – yet still they are being allowed to make excuses and tip-toe around the obvious.  They’re allowed to jealously guard sums which far outstrip anything that one individual could possibly need in several lifetimes.

The mega-wealthy like to see themselves as lone wolf entrepreneurs, building careers (and fortunes) purely on their own sweat, talent and determination. But this millionaire ego-trip bears little relation to reality – the truth is, you can’t make millions without public support. Their fortunes rely on publicly funded projects.  Building roads that let them transport goods from A to B. Enforcing laws that allow them to rely on contracts they set up, and trust that people with less money than them will have to respect their property rights. Supplementing the poverty wages they pay their staff with things like funded housing and free healthcare. Supporting the finance industry with a wealth of government guarantees.

And yet they refuse to pay back into the society that made them wealthy. The truth is that this elite have committed is the world’s biggest robbery: from you, from me, from our public services, from our entire society. And this theft has been happening all day, every day for decades, on a scale that is simply breathtaking.

Hidden fortunes

If you ask how much cash is hidden in tax havens, the answer is: no one knows exactly, but it’s big enough to distort everything you think you know about the global economy – and, because it’s the richest who hide their wealth, it means global inequality is far worse than it appears.

According to the Tax Justice Network, estimates of how much global wealth is held offshore range from $7.6 billion (£5.8 billion), by economist Gabriel Zucman, to their own higher estimate of $32 trillion. 

Big numbers get thrown around a lot in politics, but just stop for a moment to think about this one. Each of those dollars could be a grain of sand on one of those tropical beaches, and it would stretch for miles. It’s more than the annual economic output of the US and China combined.

Alex Cobham from the Tax Justice Network points out that, despite the media’s focus on high-profile individuals, this is not really about ‘individual criminality’ but ‘the systemic nature of the problem’. The entire Paradise Papers leak is just about one law firm – a tiny scratch on the surface of the issue.

Look at the UK alone. The PCS union – the trade union that represents tax collectors in the civil service – puts the annual cost to the UK of tax avoidance and evasion at £120 billion. 

Remember the ‘£350 million a week’ Brexit bus? UK tax avoidance comes to over £2 billion a week – more than six times as much as even that infamously inflated figure. That really is enough to fund the NHS: the entire NHS’ annual budget is £116 billion.

Shake the tree

The Tories said at the general election that austerity cuts are necessary because ‘there is no magic money tree’. But the tree has been found: it’s a species of palm tree, it turns out, that grows in the Cayman Islands, the Bahamas, the British Virgin Islands, and all the other places where the super-rich bury their treasure.

There are enough of these magic money trees to fund public services not only in Britain but every country in the world. A system of unitary taxation, with ‘country-by-country reporting’ so we know where multinational corporations are really making their money, could help us start to harvest their fruits.

Every penny the tax dodgers squirrelled away should have been spent on improving society for everyone. They have not robbed some anonymous ‘taxman’ – they have robbed your local school and hospital. Once you accept that there’s no such thing as legitimate use of a tax haven, then here’s another question: why shouldn’t all these people be thrown in jail?

The government will um and er, as ever, and is already leaning on the argument that not all of this activity was necessarily against the law. The answer is simple: if it’s not illegal, it bloody well should be.

Red Pepper is an independent, non-profit magazine that puts left politics and culture at the heart of its stories. We think publications should embrace the values of a movement that is unafraid to take a stand, radical yet not dogmatic, and focus on amplifying the voices of the people and activists that make up our movement. If you think so too, please support Red Pepper in continuing our work by becoming a subscriber today.
Why not try our new pay as you feel subscription? You decide how much to pay.
Share this article  
  share on facebook     share on twitter  

Labour Party laws are being used to quash dissent
Richard Kuper writes that Labour's authorities are more concerned with suppressing pro-Palestine activism than with actually tackling antisemitism

Catalan independence is not just ‘nationalism’ – it’s a rebellion against nationalism
Ignasi Bernat and David Whyte argue that Catalonia's independence movement is driven by solidarity – and resistance to far-right Spanish nationalists

Tabloids do not represent the working class
The tabloid press claims to be an authentic voice of the working class - but it's run by and for the elites, writes Matt Thompson

As London City Airport turns 30, let’s imagine a world without it
London City Airport has faced resistance for its entire lifetime, writes Ali Tamlit – and some day soon we will win

The first world war sowed the seeds of the Russian revolution
An excerpt from 'October', China Mieville's book revisiting the story of the Russian Revolution

Academies run ‘on the basis of fear’
Wakefield City Academies Trust (WCAT) was described in a damning report as an organisation run 'on the basis of fear'. Jon Trickett MP examines an education system in crisis.

‘There is no turning back to a time when there wasn’t migration to Britain’
David Renton reviews the Migration Museum's latest exhibition

#MeToo is necessary – but I’m sick of having to prove my humanity
Women are expected to reveal personal trauma to be taken seriously, writes Eleanor Penny

Meet the digital feminists
We're building new online tools to create a new feminist community and tackle sexism wherever we find it, writes Franziska Grobke

The Marikana women’s fight for justice, five years on
Marienna Pope-Weidemann meets Sikhala Sonke, a grassroots social justice group led by the women of Marikana

Forget ‘Columbus Day’ – this is the Day of Indigenous Resistance
By Leyli Horna, Marcela Terán and Sebastián Ordonez for Wretched of the Earth

Uber and the corporate capture of e-petitions
Steve Andrews looks at a profit-making petition platform's questionable relationship with the cab company

You might be a centrist if…
What does 'centrist' mean? Tom Walker identifies the key markers to help you spot centrism in the wild

Black Journalism Fund Open Editorial Meeting in Leeds
Friday 13th October, 5pm to 7pm, meeting inside the Laidlaw Library, Leeds University

This leadership contest can transform Scottish Labour
Martyn Cook argues that with a new left-wing leader the Scottish Labour Party can make a comeback

Review: No Is Not Enough
Samir Dathi reviews No Is Not Enough: Defeating the New Shock Politics, by Naomi Klein

Building Corbyn’s Labour from the ground up: How ‘the left’ won in Hackney South
Heather Mendick has gone from phone-banker at Corbyn for Leader to Hackney Momentum organiser to secretary of her local party. Here, she shares her top tips on transforming Labour from the bottom up

Five things to know about the independence movement in Catalonia
James O'Nions looks at the underlying dynamics of the Catalan independence movement

‘This building will be a library!’ From referendum to general strike in Catalonia
Ignasi Bernat and David Whyte report from the Catalan general strike, as the movements prepare to build a new republic

Chlorine chickens are just the start: Liam Fox’s Brexit trade free-for-all
A hard-right free marketer is now in charge of our trade policy. We urgently need to develop an alternative vision, writes Nick Dearden

There is no ‘cult of Corbyn’ – this is a movement preparing for power
The pundits still don’t understand that Labour’s new energy is about ‘we’ not ‘me’, writes Hilary Wainwright