Your article is excellent. I only recently became aware of the staggering amounts of money involved in tax evasion, because of a documentary about it on TV in England last year in which the Tax Justice Network was mentioned. I proceeded to access their website and read the information on it and have passed it on to some of my other ‘socially’ aware friends.

The problem of tax evasion is thankfully being increasingly mentioned in political debates that I have listened to recently and last weekend we had protestors in the UK forcing Barclays to close some of their Saturday opening banks when they protested over the pitiful amount of Corporation Tax Barclays paid last year, after it was published in the press.

It will, however, take concerted international ‘pressure’ by the public to change ‘the tax system’ into a fairer one – one can only hope.

I believe the situation with laundered drug money is as bad as you say, $500 billion a year at best guess. Can you explain why the FATF have so few offshore centres on their “Non Compliance” warning list ?

A large number of these centres will be involved in the laundering of massive amounts of drug money, so how do they lure the FATF into stating that they are complying with the process of identifying money launderers ?

Is it because monies held in corporate accounts are exempt from regulations ? Is it because banks run and owned by criminals – state they are complying with the regs and reporting suspicious customers, – but in reality, – just don’t?

Is the FATF just an exercise in publicity where as in reality it is the interests of Wall Street and the City of London which are being safeguarded ?

This seems a lot of questions !! Well. I expect you are very busy. But keep up the good work. I look forward to reading more.

Paul Jeffery

[ed: FATF is the Financial Action Task Force, set up by Western governments to address money-laundering. It has few powers other than "name and shame." ]

The USA national income accounts reveal a historical ratchet pattern. Every 15-25 years, Congress gets tough, closes some loopholes, and corporate income taxes as a fraction of GDP rises. But then that fraction gradually erodes, until the next burst of Congressional indignation. Over the past several
years, the fraction has been fairly high when compared to the 80s and 90s. But I very much doubt the problem has been eliminated.

I was taught in the 70s that national tax authorities are no match for multinational corporations and their Big Four tax advisors. And that the cunning of multinational business far outstrips tax law and accounting practice. What to do? I am not sure, but suggest the following:

1. The European Union, Switzerland, NAFTA, the Asian Tigers, Australasia, should negotiate a multi-lateral agreement on the taxation of the income from capital and on transfer pricing. This addresses the tax havens in Luxembourg, Switzerland, Monaco, Channel Islands, Isle of Man, Bahamas, Cayman Islands, and possibly more.

2. The European Union should consider adopting a common union-wide corporate income tax law.

3. Most radical of all, nations should adopt a form of the Hall-Rabushka Flat Tax. Warning: that tax has been oversold, in particular a flat rate of 19% won’t do the job, and the Flat Tax should be integrated with Social Security. Hence the required flat rate is more like 30%. The harshness of the tax for modest incomes would be offset by a payment of $250-$300/month to every legal resident of the USA. It would still be advantageous to sell to offshore subs at artificially low prices, and to buy from such subs at artificially high prices. This problem requires further thought.

4. Under a flat tax, the responsibility for paying income tax on interest paid by businesses could be placed on the borrower instead of the lender. Under such a system, there would be no incentive to channel bank credit and debenture ownership through shell companies in tax havens.

I am not sure just what will address the problems you rightly raise. But something must be done.

Allow me to further your argument by suggesting that the oligarchy of corporate/governmental individuals has locked into place a media blackout of any sane investigative reporting on this issue. Mostly because the “hidden” funds are perpetuating the global economy as it is (the recent $400 billion injection of FED and other central bank money and the lowering by 1/2% the prime rate).

As you must be well aware. Average listeners/readers/viewers of the explanations of the “facts” behind the lack of money for domestic/foreign aid programs etc. are in my view purposely blinded to accept the “government line” (“that the Iraq war is consuming all the available funds”).

I feel you are fighting the good fight; yet you/we must always realize as we did during the chaos of the 60′s anti Viet Nam war protest era that our pleas for peace were falling on deaf ears. The academic mood across the nation today is stifled. So much is invested in maintaining this feudal style 21st century eco-political/economic dictatorship that even if Michael Moore were to take up the charge and compose a film exposing this atrocity I am not certain that anyone viewing his film would know what/how to react.

Also one must ask whether this is being completely engineered to bring a halt to the daily neighborhood economies of the west in order to bring about a “new form” of feudal dictatorship? In that case all countervailing efforts will be forcefully hushed from above. Economic covert warfare has been an age old tool to transfer power from one group to another (see The formation of the FED; crowning of Charles I of England; who was Charles III of Scotland; or the Rothschild’s pigeon news report after Waterloo; or Mr. Soros’ attack on the British pound).

Clearly we are under an oligarchy of Bush-Clinton-Bush-Clinton (again?) criminal crime families. This may be no mistake.The amount of money accessible to those surrounding the center of federal government (K street lobbyists, etc.) have such a stranglehold on this nation that until we throw off the cult of personality and lavish lifestyles we may never see that the rising tide raises all boats (or as Mr. Sen McCain put it: “all yachts”).

I recently heard that the Greeks had another more powerful word to explain the “rule by scoundrels” (I’m afraid I don’t remember the Greek word for it). Regardless that is the functional definition of our so called democracy today.

I apologize if this comment seems cynical but I have survived a time in federal prison where one develops this attitude. I hope you rationally fight the good fight and as they have all the guns; and further that you are successful in exposing their greed and corruption in a way to bring awareness to the multitudes (even if you inform only their corporate stockholders).

Thanks
Richard Gordon CP