The Spark

“The emancipation of the working class will only be achieved by the working class itself.” — Karl Marx

Tax Shelters:
Capitalists Have Free Rein

Dec 7, 2020

Translated from Lutte Ouvrière (Workers’ Struggle), the newspaper of the revolutionary workers’ group active in France.

Tax shelters hide 427 billion dollars from taxation worldwide—245 billion by corporations and 182 billion by very wealthy individuals, according to a recent report by the Tax Justice Network. The group also reports that corporations sheltered 1.3 trillion dollars of their profits in fiscal paradises, while individuals sheltered 10 trillion in assets.

But these numbers are surely underestimated. Much tax sheltering, legal and illegal, is protected by privacy laws, so it’s impossible to measure its true extent. Governments might wish to collect some of the tax revenue they are losing, but not by restricting the liberty of capitalists to roam the world in pursuit of the highest profit—which translates to the lowest taxes.

The group explains that the main fiscal paradises are inside the world’s richest countries and are supported or authorized by the most powerful governments of Europe and the U.S. The leading tax shelter is the Cayman Islands, which officially remain a British overseas dominion, sheltering 16.5% of the total hoard; in second place, the United Kingdom itself, with 10%; then Belgium, 8.5%; Luxemburg, 6.5%; and the U.S., 5.5%.

Telling governments to fight against tax shelters is like asking the fox to protect the chickens. When governments pass measures that are the least bit restrictive, big corporations and their owners resort to their armies of lawyers to find the loopholes—legal or not—to get around them.

So long as society remains the prisoner of capitalism, the right of capitalists to avoid taxation will remain guaranteed.