Panama Papers part 2

Quoted from A Very Expensive Poison, The Assassination of Alexander Litvinenko and Putin’s War with the West by Luke Harding.

“Together the documents revealed a bitter truth hidden in plain sight. Namely that the secret offshore industry was not, as had been previously thought, a minor part of our economic system. rather it was the system. Those who dutifully paid their taxes were, in fact, dupes. The rich, it turned out, had exited from the messy business of tax long ago. So had many corporations, though the files didn’t show this.

“Taxes, it seemed, were for little guys.

“The sums involved were massive: $7.6 trillion stashed in tax havens, according to the California-based French economist Gabriel Zucman, with a loss to global tax revenues of $200 billion a year, including $35 billion in the US and $78 billion in Europe.

“The files give the lie to Reaganomics. This creed said that it was virtuous to give breaks to the super-rich because wealth would percolate down to the poor. Ed Miliband, the much-mocked former leader of the Labour party, defeated in 2015, pointed out to the Observer newspaper: ‘It doesn’t trickle down. It gets stashed.’

“As President Obama noted, tax avoidance was a huge global problem. It was made worse by the fact that using offshore structures was perfectly legal. The majority of Mossack Fonseca’s clients were what you might call the non-famous international rich. Others were heads of state and politicians, plus their relatives. And–as Obermayer put it–‘scumbags’. That included drug dealers, bank robbers, Ponzi schemers, sanction-busters and chancers of every description.”

In his 2013 book, Capital in the Twenty-First Century, French economist Thomas Piketty suggests the solution the global problem of income inequality is a modest annual wealth tax. I support the idea. There is enough hidden ill-gotten gains in the world to eliminate global poverty and provide everyone a decent income, IMHO. The wealth tax must be applied globally and divided locally. There are only three centers where data is held on the wealth that is hidden. Coordination among the three would ensure that wealth could not be shifted from one hiding place to another to avoid taxes.

Trump must go