In the EU, it’s tax haven for me and not for thee; Dubai’s terrifying new model for hiding money
Hello, and welcome to Oligarchy. We are tracking how Covid-19 and the world’s response to it is affecting the super-rich — and what that means for power and politics.
THE EU’S TAX HAVEN DOUBLE-STANDARD
It’s been widely reported that various European states — Denmark, Poland, France, Belgium — have blocked companies registered in tax havens from accessing their Covid-related bailout plans. If you don’t pay in during the good times, the reasoning goes, then you can’t take out in the bad. This is all well and good, of course, in that anything that forces the world’s oligarchs to stop freeloading on society by hiding their assets offshore is beneficial.
- It’s not nearly as good as it looks, however, and will probably achieve nothing.
The problem is that the European Union does not think any of its own members, or even any of its friends, are tax havens. So, the Netherlands, Ireland, Cyprus, Malta or Luxembourg – all of which would meet any rational test for places that help hide oligarchs’ secrets – don’t count. The United States doesn’t count either, despite some of its states – Nevada, Delaware, South Dakota – being even murkier than their EU counterparts.
These days, no one admits to being a tax haven, just like no one admits to being rich. One’s enemies run a tax haven, and deserve to be sanctioned; but one’s friends run an international financial center, and deserve to be encouraged. If the Europeans genuinely want to help, they need to set a standard definition of wrongdoing, and block any companies that meet it from accessing public cash, rather than relying on a politicized definition that makes no sense.