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WORLD CITIZEN LETTER: 529
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WCL 529 August 2006
'Only little people pay taxes'
This was the confident statement of a wealthy American woman who clearly knows the ropes (of pearls, no doubt) and is determined to hang on to them. One might expect her remark to be contradicted by the democratic politicians who have superintendence of the country's laws that are supposed to ensure justice in the levying of taxes, as in other things affecting their constituents. No such response has had any equally noteworthy circulation.
The twin devices known as tax avoidance and tax evasion usually ensure that the rich are well protected against the democratic impertinence of taxing them in ways consonant with their assets. The two may differ, in that one is legal and the other illegal, but the effect tends to be the same. Various different routes to safety for wealth are available and once someone smart or wily and rich in assets has reached a level where tax might seriously affect his personal fortune he will certainly have employed a tax-lawyer and accountants. One of the students graduating in economics in my days at college took up as his first job an appointment to a millionaire family to ensure their liability to tax was minimal.
The British Chancellor of the Exchequer, preening himself upon various measures adopted to ameliorate the lot of families living in poverty after years of prosperity, has yet to take firm steps to limit the use of tax havens. These bunk-holes for wealthy non-tax payers and dodgy companies are in some cases, like the Channel Islands, actually within U.K. jurisdiction. Nevertheless, the move of money and information through such hiding-places has regularly enabled the routine tax-avoidance and activities either illegal or simply not able to be checked.
The situation is worst in the United States, where for years virtually all the members of Congress have been millionaires with a few who were going into politics with that end in mind. It does not take much imagination to see the point and realise the result in the social policies of U.S. governments. If anyone needed proof, the failure to remedy the effects of the hurricane that devastated New Orleans last year was a reminder. But every free market economy that follows in the American wake, either perforce or willingly, as New Labour under Tony Blair, is in similar jeopardy.
There was a time when national movements - radical, liberal, socialist or communist - had apparently the opportunities and chances to overturn the drive to fortify wealth against taxation.This has been increasingly difficult or even impossible with the inexorable advance of globalization. Free markets mean, first of all, enlargement of the scope of big business and wielders of huge amounts of capital. The resistance offered by U.S. anti-trust legislation, despite occasional spectacular successes, has been doomed. Monopoly and quasi-monopoly power has grown to dominate much of our world and where it does not do so openly it is usually capable of winning control through compliant or submissive governments.
Even an institution like the European Union, founded with a full agreement of its constituents and the long-term aim of creating a democratic federation has become prey to the existing wealthy institutions among its members. That and the tendency of bureaucracies to seek administrative convenience above the untidiness and inefficiencies of democratic control is now having the dangerous effect of undermining support for the E.U., which probably offers one of the few ways of preventing the complete take-over of the world by the wealthy and their agents.
Because world citizenship requires democratic participation of people everywhere and government responding to their needs and wishes. While the United States is bidding for total global supremacy - military, economic and financial - and remains in the grip of its wealthiest class, who can imagine that we shall be able to move towards a world fit for those who are poor and under-privileged? If the U.S. treats its poor blacks in Louisiana in the way they have suffered in New Orleans, who can believe in the 'free world' offered by George W. Bush?
John Roberts
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