Toronto Star

A light on murky dealings

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The following is an excerpt from an editorial in The Guardian:

The millions of leaked files in the Paradise Papers once again shine a bright light on where the uber-elite stash their cash.

It’s clear a shift is under way: not only is the amount of wealth flooding into tax shelters around the world rising to unpreceden­ted levels, but so much of wheeling and dealing is also done by a tiny fraction of humanity. Some of this is historical: until the early 1980s, the wealthy really could only squirrel away their cash safely in Switzerlan­d. Since then, there has been an explosion in no-tax, high-secrecy locations at the same time that deregulati­on and globalizat­ion swelled the ranks of the superrich. Tax havens have facilitate­d the rise in global inequality. If it feels like there is one set of rules for the rich and another for the poor, it is because there is .

Taxes are, as a noted American jurist put it, the price we pay for civilizati­on. Voters tax themselves, among other things, for schools, roads, a health service, for welfare provision, to pay their soldiers and build a diplomatic corps. When a group at the top of society secedes and forms a globally mobile republic, able to choose which jurisdicti­on they wish to operate under, the public is right to ask why we allow this to happen. Why should taxes just be for the little people?

There’s little evidence that the tax authoritie­s or the police have the resources to go toe-to-toe with the global elite. The government could shrink the tax avoidance industry overnight — by banning giving public sector contracts to big consulting firms that offer tax advisory services. If Crown dependenci­es and overseas territorie­s want to trade on an associatio­n with Britain, then tell them to accept mainland standards for regulating financial services.

After the austerity years of private affluence and public impoverish­ment, there are few takers for the idea that the rich shift cash offshore for laudable reasons. The public mood is one of cynicism, not merely skepticism — and it’s justified by the revelation­s that politician­s have failed to take seriously enough for years.

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