We know that the United States has, rather literally, two legal and two taxation systems: one for the rich, including corporations, and one for the vast majority of Americans. With lots of money at their disposal, the wealthy wield campaign contributions (and indirect financial support via SuperPac protected under the corrupting 2010 Supreme Court ruling in Citizens United vs FEC), hire legions of specialized lawyers, lobbyists and public relations specialists to make sure they get special treatment. With lots of loopholes carefully lobbied into place and a system of taxation that taxes income but leaves wealth mostly untouched, it is not a shock that very successful big corporations pay no taxes and wealthy executives, landowners, developers and shareholders pay taxes at a lower rate than their assistants, if they pay taxes at all. Like Donald Trump.
Wealthy corporations also lobby for environmental loopholes that allow them to pollute, like the exemption from environmental restrictions accorded to the petroleum industry from responsibility for fracking chemicals or the governmental inability to make companies that create constant toxic environmental emissions actually pay for the damage that they cause. Some of this is judicially and statutorily legitimized de facto “corruption,” but it becomes fascinating to look at the biggest issues facing the entire planet from this perspective.
Effectively, this notion of “entitlement of the wealthy” has created the two most consistently destructive forces created by mankind on this planet: corruption and climate change. Yes, we have conflict, genocide, torture and cruel autocracy, but those horribles come and go. Corruption seems incurable, and climate change will not flow away. A simple look at taxation tells us that so many of the rich all over the world will do just about anything to avoid (evade?) paying taxes. Money moves around the world seeking shelter from taxes. Power corrupts!
The October 21st BBC.com shows us a couple of examples of the problem: “Major tax evasion and avoidance schemes have cost governments an estimated €150bn (£127bn [$175bn]) in lost revenues, research shows… So-called cum-cum and cum-ex schemes are designed to exploit weaknesses in national tax laws… They apply to the payments, or dividends, firms make to shareholders… The new figures have been calculated by a team of experts at the University of Mannheim, in partnership with the German not-for-profit group Correctiv.
Evidence from leaked documents and people involved in the schemes suggests UK taxpayers have also lost out, potentially to the tune of billions of pounds….. The research forms part of a joint investigation carried out by newsrooms worldwide, co-ordinated by Correctiv, known as the CumEx Files 2.0. It casts new light on a growing scandal which first came to public attention in 2018… So-called cum-ex trades were transactions where shares were sold from one investor to another immediately before the payment of a dividend (cum, or with, dividend) but delivered afterwards (ex-dividend)… This tactic effectively created confusion over who owned the shares at the moment when the dividend was paid. It allowed both parties to claim rebates on withholding tax - a levy which had only been paid once, when the dividend was issued.
“This practice became popular in Germany in the early years of the century and continued until 2012, when the law was changed. It also spread to other countries, notably Denmark, but also France, Belgium, Italy and Austria… In Germany, prosecutors have launched a wave of criminal inquiries… Several individuals have already been found guilty of tax evasion. Some 1,000 people are currently under investigation, including junior and senior banking staff, lawyers and brokers…
“[D]ocuments show that bankers were able to carry out related trades to ‘recycle’ otherwise unusable German tax credits and generate profits at UK taxpayers' expense… The complex system relied on so-called ‘manufactured overseas dividends’ (MODs), payments made between parties involved in so-called short sales of borrowed shares in foreign companies… It allowed investors to generate liabilities which could be offset against German tax credits and at the same time, generate a credit against UK tax.
“Estimates vary as to how much this scheme actually cost the UK taxpayer. One individual who was involved in these kinds of trades in the past suggested it would have been several hundred million pounds a year until 2005 - and more than £100m [$138m] per year thereafter… Another whistleblower told the BBC that ‘these were not small trades’, and that the practice ‘must have been used on a significant scale’.” Add to these techniques the out-and-out lying on tax returns, bribing tax collectors and massive deposits in secret (often Swiss) bank accounts. The lost tax revenues go way, way up from there.
But entire countries seem willing to bend the rules, pressure international bodies to rewrite or ignore “facts” where such practices have devastating impact. China’s pressuring the World Health Organization to sanitize the extent of its COVID outbreak is a particularly toxic example that helped the pandemic explode before containment efforts were mounted. But in the world of climate change, the BBC.com also tells us of another nasty practice: “A huge leak of documents seen by BBC News shows how countries are trying to change a crucial scientific report on how to tackle climate change… The leak reveals Saudi Arabia, Japan and Australia are among countries asking the UN to play down the need to move rapidly away from fossil fuels.
“It also shows some wealthy nations are questioning paying more to poorer states to move to greener technologies… This ‘lobbying’ raises questions for the COP26 climate summit in November… The leak reveals countries pushing back on UN recommendations for action and comes just days before they will be asked at the summit to make significant commitments to slow down climate change and keep global warming to 1.5 degrees.
“The leaked documents consist of more than 32,000 submissions made by governments, companies and other interested parties to the team of scientists compiling a UN report designed to bring together the best scientific evidence on how to tackle climate change… These ‘assessment reports’ are produced every six to seven years by the Intergovernmental Panel on Climate Change (IPCC), the UN body tasked with evaluating the science of climate change.
“These reports are used by governments to decide what action is needed to tackle climate change, and the latest will be a crucial input to negotiations at the Glasgow conference.” We know that the United States has its share of climate change deniers and conspiracy theorists, tax evaders and mendacious current and former elected officials. But the whole world likes to play games that can kills us, shifting the cost burden of destructive actions from the rich to the not-rich.
I’m Peter Dekom, and since the United States has long since ceded the moral high ground on so many of these crucial issues, it takes committed individuals building broad constituencies to yell, scream, organize, vote and oppose these dark forces on a never-ending basis.
Posts
No comments:
Post a Comment