A report by the charity Oxfam, published ahead of EU talks on tax evasion, shows that there is £12 trillion hidden in tax havens around the world.
This figure is enough to eliminate “extreme poverty” worldwide, twice over. The figure represents a daily loss of £156 billion. Two thirds of the amount is stored in EU tax havens, including Luxemburg, Andorra, and Malta. £4.7 trillion of the total sits in British Overseas Territories or Crown Dependencies.
A 2012 study by the Tax Justice Network into similar practises showed that 0.001% of the world’s population control 30% of its financial wealth, with the bottom 99.9% controlling just 19%.
Such figures explode some of the key mantras of austerity politics — that there simply isn’t enough money to go around, and a collective social belt-tightening is necessary to ride out the financial crisis. There is enough money; the issue is with who controls it. The rich are doing very well indeed out of the crisis, with not much belt-tightening. On the contrary, the number of billionaires in Britain increased from 77 in 2011/12 to 88 in 2012/13, with the combined wealth of the richest 1,000 people in the UK increasing by £35 billion.
The Oxfam scheme does not even necessitate increasing taxation. It simply requires closing loopholes that allow the super-rich to legally avoid tax. That the world’s wealth contribute so directly to the continuation of poverty by dodging taxes they ought to be legally required to pay is an obscenity.
Only the rich can access the offshore havens and other loopholes that allow them to dodge so much tax.
Working-class people have to pay the full amount. Loopholes and legal tax avoidance is so grotesque that, in 2007, even the Daily Mail was publishing exposés of private equity bosses paying less tax (proportionally) than the workers who cleaned their offices.
Pointing out these injustices and inequalities is an important part of the socialist critique of capitalism. We should demand not only that tax loopholes are closed, but that taxes on the rich and big business are massively increased.
But a focus on “tax justice” is not enough. The “Robin Hood Tax”, a proposed global tax on financial transactions, is often presented as something of a magic bullet, but would in reality leave the real inequalities of wealth and power untouched. To win a real shift of power, workers must take control of bosses’ wealth – at a workplace level, by taking over production, and at a societal level, by building a movement capable of taking social power and expropriating the massive wealth of the banks and the financial sector.
We are light-years away from the existence of such a movement, but fights for immediate reforms — including for increased taxation of the rich and business — are a key part of the process of building it.
