Money and power

The latest revelations from the leak of the Paradise Papers raise troubling questions, not only about government’s failure to collect what’s owed, but also about the power of money to subvert our democracy.

They serve as a reminder that those who can afford to hide income from the taxman can also afford to hire the very best lobbyists to help ensure that, whatever the public interest, governments don’t close the loopholes that allow tax avoiders to get away with it.

In 2013, the leaks reveal, as G8 countries prepared to launch a regulatory overhaul seeking finally to put an end to the secrecy in which offshore tax schemes flourish, a powerful lobby group got to work. The International Financial Centres Forum, funded by 11 of the world’s biggest offshore law firms, achieved what it called “superb penetration” into the highest ranks of government, managing to water down significantly the transparency rules that were eventually adopted.

The Paradise Papers are doing nothing to soothe those who worry about the unseemly intertwining of money and power in politics or about the extent to which the economy is rigged by the few against the many. The government can do something about that. It can, for instance, close unfair and ineffective tax loopholes and collect what’s owed. Or it can sit back, defend the current arrangements and watch the cynicism grow.