A new report from Oxfam gives an insight into the ways in which insatiably greedy mega banks are using tax havens to hide their huge profits from the taxman (therefore us).
The research shows that Europe’s 20 biggest banks reported over £18 billion in profits squirreled in tax havens last year — with UK-based banks being some of the worst offenders.
Oxfam notes that by depriving countries of the tax revenue owed to them, greedy and selfish bankers are creating yet more poverty for people in countries in which public services are being slashed through brutal austerity — the so-called medicine inflicted on us for the bankers recklessness that led to the financial crash of 2008 — for some reason…..WE have been forced to pay for it ever since — and now they continue to simply take the p*ss out of us.
A study conducted by the IMF a few years ago showed that the profit of US banks was almost entirely due to government subsidy — the situation is unlikely to be too different here — meaning that the banks profits are essentially funded by the state — a large portion of which we don’t even get returned: socialism for the rich, neo-liberal poverty and misery for everybody else.
Oxfam notes the grotesque, growing global wealth inequality between the top 1% and everybody else:
Since the turn of the century, the poorest half of the world’s population has received just 1 per cent of the total increase in global wealth, while half of that same increase has gone to the rich- est 1 percent
Commenting on the damage that the ultra-rich inflict on the rest of us by using tax havens just to secure yet more profit they say:
This extreme concentration of wealth at the top is holding back the fight to end global poverty. Consequently, when governments lose tax revenues, ordinary citizens pay the price: schools and hospitals lose funding and vital public services are cut.
They note that the tax burden is then passed onto everybody else, meaning that we all pay for the use of tax havens:
Alternatively, governments make up the shortfall by levying higher taxes, such as value added tax (VAT), which impact disproportionally on poorer populations. At the same time, increased profits as a result of lower corporate taxation benefit wealthy companies’ shareholders, further increasing the gap between rich and poor.
This describes quite adequately the neo-liberal experience, I’m sure we can all agree on that.
They go on to say:
Public resources, funded by government levies, are key to development and the well-being of citizens, but they are constrained by a system which allows wealthy individuals and multinationals to circumvent or reduce their tax liabilities, choking out the revenues that societies need to function. Major banks play a pivotal role in tax dodging practices globally.
The report says that the Banks claim to have made a quarter of their global profits in the tax haven countries, despite the fact that they account for only 12% of their turnover and 7% of staff.
The UK banks are even worse than this: between them, HSBC, Barclays, RBS, Lloyds, and Standard Chartered reported profits of £9 billion in tax havens — an incredible 67% of their profit.
Over £500 million of this profit was supposedly made in six British overseas territories and crown dependencies, such as Jersey and the Cayman Islands where banks pay just 7% on profits — compared to 20% in Britain (which is still one of the lowest rates in the Europe, and is due to be cut to 17% by 2020.)
They highlight some of the ludicrous ways that banks are using these tax havens — Barclays being the worst example:
Barclays’ 42 employees in Luxembourg beat all records and managed to generate €557m of profits in 2015, putting the average productivity per employee at €13.255m, 348 times higher than the bank’s average of €38,000.
The report cites Luxembourg as being one of Europe’s most popular tax havens, calling it:
With Ireland, and Belgium not being far behind:
The banks are also using Delaware in the US to avoid tax, employing this rather bizarre set-up.
Oxfam concludes that it is time for the banks to start paying their fair share, and that they must be held accountable through tougher legislation, and that they should start to show some responsibility to the rest of society.
Unfortunately for us all — banks — or politicians, such as the Chancellor Phillip Hammond (whom last week was found to be benefiting directly through his own business rate cut from his own budget by as much as 10%) — don’t seem to be in the habit of listening to moral arguments.
Perhaps if we nationalise the banks, and take these state funds out of the hands of the greedy bankers, we can put an end to tax dodging once and for all.
After all, if we owned the banks, why would we dodge tax and defund our own public services?
Would we allow our NHS to be run into the ground — victims dying in the process — would we avoid tax like this?
With banking profits booming — isn’t it time we are started to share in the glory of the banker’s wealth? We, after all, have funded this boom, the least they could do is pay some of it back.
Once again the answer is quite simple, the question is how to get there.