The real cost of tax dodging; soccer clubs for sale
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.
TAX JUSTICE
Here’s an interesting statistic: every second, tax dodging by wealthy corporations and individuals costs the world an amount equivalent to the annual salary of a nurse. It takes a complex calculation to arrive at that conclusion, and I have no doubt some people may quibble with it, but the point is an important one. This is a year that has shown us all the value of nurses, so perhaps it’s the year when – as a planet – we all start doing something about this pandemic of tax dodging. I hope so.
The headline figure from the Tax Justice Network’s inaugural State of Tax Justice report is that $427 billion is lost to governments each year through clever tax avoidance and evasion strategies. That is only the direct cost: TJN has not tried to put a figure on the indirect cost that results from countries lowering tax rates and loosening regulations as they attempt to compete with tax havens in the global race to the (non-existent) bottom.
Slightly more than half of the total – $245 billion – derives from multinational companies shifting money through tax havens to minimize the profits they report in places with higher tax rates, and the rest is lost to wealthy individuals stashing their cash offshore.