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Tax shelters for the rich, and the Republicans who want to keep them secret

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In a little-noticed event, a high-ranking United Nations official is urging the world to make the elimination of tax havens a priority to ensure that corporations, billionaires and ‘kleptocrats’ pay their fair share of taxes.”

The richest one percent is hiding “as much as $32 trillion…held offshore in secrecy jurisdictions escaping just taxation,” the official said. The prime hiding places are Switzerland, Hong Kong and the United States, with “other high-profile jurisdictions” being Luxembourg, the Netherlands, Belgium, Malta, Cyprus, Singapore, Liberia and Panama.

The U.N. official is Alfred de Zayas, a human rights expert; in his press conference he urged the U.N. to “take concerted action” against “speculators, hedge funds and transnational enterprises.”

This fits in well with the current discussion about disparities of wealth and the governments that permit it to exist—a powerful discussion here in America, where Bernie Sanders used it as a centerpiece of his populist campaign.

It used to be thought that the extremely wealthy were blessed by God, and so were beyond criticism. We now know that the one percent got their money, and hold onto it, not through God’s intervention, but through a tax system that does not function properly or democratically. When the extremely wealthy have undue access to the highest levels of government—including elected officials and regulators—they often are able to persuade them that laws which would more heavily tax the wealthy actually hurt the poor. This is, of course, Orwellian, but it is an argument to which the Republican Party is particularly receptive.

Even so, at some point, popular disgust with the rich avoiding taxes—a primary cause of income inequality—has risen to such an extent that even Donald Trump is attempting to take advantage of it–falsely, of course. The likely election of Hillary Clinton, as well as the probability that Republicans will keep the House of Representatives, means that if income and estate taxes do go up on the rich, something Hillary Clinton has proposed, Paul Ryan will have to go along. However, the Speaker is adamant in insisting that he will never be party to any plan to raise taxes on anyone.

This would seem to let the rich off scott-free: so much for income and estate taxes. But there is a possibility that, at the very least, Republicans and Democrats could come together on the de Zayas proposal. It’s not clear what the U.N. itself could do; the world organization cannot mandate laws for individual countries. It can, however, place pressure on member states to create their own laws restricting the extent to which the one percent, including corporations, can park their money in tax havens. Even Republicans, after all, might be susceptible to moral arguments concerning the unfairness of tax havens.

Bernie Sanders of course railed against the one percent, and as this position paper he wrote during the primary campaign suggests, he is well aware of tax havens, which he deemed “unacceptable.” As for specifics, Sanders called for new laws to “prevent corporations from avoiding U.S. taxes by claiming to be a foreign company through the establishment of a post office box in a tax haven country. However, it’s not clear how such a new law would work, or whether it could effectively recover large amounts of money currently out of reach of taxes, or whether it also would apply to the wealthiest individuals and families.

Even if a Clinton administration were to craft specifics about regulating tax havens, would a Ryan-led House go along? Back in 2011, the Obama administration did indeed propose new laws to “crack down on offshore tax havens [that] could produce $210 billion in new tax revenue over the next decade.” Republicans staunchly opposed it, and the proposal went nowhere. And earlier this year, once again, Obama urged Congress to end corporate tax havens that, he said, are “gaming the system.” Republicans again opposed, and the proposal died in the Republican-controlled Congress. The Republican rationale for opposition was expressed by one of the organizations that represent the one percent: This is a misguided approach that could have a freezing effect on attracting global employers and will damage U.S. competitiveness, which may very well be measured in lost jobs, wages and GDP.” That’s the standard Republican pitch for not regulating tax havens. Who said it? The CEO of the Organization for International Investment, a Washington-based nonprofit funded by some of world’s biggest corporations, including GlaxoSmithKline, Toyota, Deutsche Telekom, Credit Suisse and Chubb. These clearly are the kinds of wealthy entities that hide their money in tax havens. Of course they would be opposed to transparency and paying their fair share. They, with their Republican friends, can be expected to strongly oppose any attempt to regulate tax havens, which means that—even if the Senate turns Democratic–as long as the House of Representatives remains controlled by Republicans, wealthy individuals and corporations will continue to hide their money overseas, and avoid paying their fair share.

We can only dream about how much better America would be if we could recover even a portion of the trillions of dollars now being hidden by the rich. The money could go into roads, bridges, tunnels and the rest of our decaying infrastructure. We could increase teacher salaries, as well as those of our volunteer military. Cities and local jurisdictions could better invest in affordable housing for the middle class. We could invest more in alternative energy, in early childhood education, in daycare, in preventive healthcare, in training and career education. The wish list goes on and on. Sadly, Republicans, for some bizarre reason known only to them, do not appear to want such good things to happen. When they say they do, they lie: watch their deeds, not their words.

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