The Cayman Islands, off the West coast of Cuba, are home to a plethora of beautiful sun kissed beaches, glistening white sand, clear blue sea, and small buildings that magically home tens of thousands of U.S Companies. It’s a beautiful warm magical corporate Narnia.
Whilst the hypocritical Teabaggers sit at home complaining endlessly about the work the Obama administration is currently undertaking in order to clean up the failed Neoliberalist mess left by eight years of Republican destruction; the Administration itself is set to crack down on off shore tax havens, and rightly so. We spend far too long reading stories about benefit cheats, who, in 2008 were responsible for scrounging altogether £800m condemning them all to hell, and yet we appear to have no problem with the fact that £13bn was lost to Corporate tax evasion in the UK in 2008. We let that slip. For what reason? For all the complaining about the public finances David Cameron does, and how he’s so worried about our kid’s futures, he doesn’t seem too fussed about the tax haven scams.
Treasury Secretary Timothy Geithner told the House Ways and Means Commitee on Tuesday: “We fully support the legislation … on offshore tax centres, and we look forward to working with you as part of the broader effort to address international tax evasion and close the tax gap”.
To most of us, the fact that $13tn remains locked away in untaxed havens of the super rich across the planet, is despicable, and so intensely wrong it demands urgent action. The Chancellor over here in the UK announced in his 2009 Budget, that HM Customs and Revenues would name and shame those companies underpaying what they in fact owe in tax, with those individuals responsible for tax avoidance, for the first time ever, being held personally liable for the lost tax revenue. Fantastic steps. Obama appears to be doing the same over in the States. And rightfully so.
President Obama announced that along with much more transparency in American held bank accounts in tax havens; that regulation of offshore Tax Havens would save $210bn over ten years, and would be used “to reduce the deficit, cut taxes for American businesses that are playing by the rules, and provide meaningful relief for hard-working families.”
The plans would also stop companies deferring taxes on profits made overseas, and so should act as an incentive to stop shutting up shop and shipping jobs overseas. Overall, it seems like a great idea. The Future of Capitalism must be a responsible future. It must not reward those who ship overseas, or move their profits to tax havens, to avoid paying their fair share in the United States. The Republican culture of pandering to big business seems like it is being cleaned up.
In January 2009, The Government Accountability Office found that of the 100 biggest U.S Corporations, 83 have subsidiaries in offshore tax havens.
Where are the teabaggers now? Where were they when it was announced in July 2008 that 18850 companies are registered to a small apartment block in the Cayman Islands? Pandering to big business and defending their ability to cheat the system, whilst complaining that the poor folk of America can no longer afford to keep their homes due to disastrous Bush Administration policy, is hypocritically pathetic at best.
The Republicans have two courses of action, both wont help their cause. Firstly, they could come out against these plans, and just appear to be the same old Republican Party, sucking up to big business, the party of the rich, and claiming that anything other than letting Corporate tax avoidance happen is Socialism; or they could keep quiet and say nothing. Which, makes them look weak, no doubt the extreme Right (Fox, and Limbaugh) will then make a point to attack the GOP for being too Liberal, and further kill off their cause. Either way, i’m fine with.
The U.S Chamber of Commerce chief economist Marty Regalia said of the plans: “A huge tax hike on U.S. employers is not the way to stimulate our economy. Congress should reject this approach.” I never realised making companies pay the taxes they owe, is a tax hike? But what do I know, i’m not a chief economist.
Ryan Ellis, tax policy director of the anti-tax group Americans for Tax Reform echoed Regalia’s sentiments by saying: “This will force companies to leave the country, and they’ll take their jobs and capital with them,”. If Ellis had chosen a different career path, and instead became a counsellor for domestic abuse victims, I fear his message would be something like: “HEY! Let your boyfriend rape you, otherwise he’ll leave and find someone new to rape”. I say if the cancer of Capitalism wants to leave the Country because their infectious nature has been broken down and eliminated, let them. Fuck them. Competitiveness will not be killed off, it will merely create a fairer market within the United States for the companies that don’t piss all over the rule book.
I wait anxiously to see the Republican response to this in the United States, and what, if anything The Conservatives and David Cameron have to offer over here in the UK.