NZ exporting poverty

Written By: - Date published: 8:23 am, May 9th, 2016 - 14 comments
Categories: accountability, capitalism, class war, Ethics, International, overseas investment, poverty, scoundrels, tax - Tags: , , , ,

Not content with a fine crop of domestic poverty, it seems that NZ is in the poverty export business.

To quote an earlier post: Tax evasion is illegal. Tax avoidance is a moral grey-zone. They both cost governments income that could be used to further the public good. This interesting piece by Colin Holtz in The Guardian looks at the costs of tax evasion, and how (in America) the missing funds could be used to fund a UBI:

The Panama Papers prove it: America can afford a universal basic income

If the super-rich actually paid what they owe in taxes, the US would have loads more money available for public services

Called a universal basic income by supporters, the idea has has attracted support throughout American history, from Thomas Paine to Martin Luther King Jr. But it has also faced unending criticism for one particular reason: the advocates of “austerity” say we simply can’t afford it – or any other dramatic spending on social security.

That argument dissolved this week with the release of the Panama Papers, which reveal the elaborate methods used by the wealthy to avoid paying back the societies that helped them to gain their wealth in the first place.

But while working and middle-class families pay their taxes or face consequences, the Panama Papers remind us that the worst of the 1% have, for years, essentially been stealing access to Americans’ common birthright, and to the benefits of our shared endeavors.

The Tax Justice Network estimates the global elite are sitting on $21–32tn of untaxed assets. Clearly, only a portion of that is owed to the US or any other nation in taxes – the highest tax bracket in the US is 39.6% of income. But consider that a small universal income of $2,000 a year to every adult in the US – enough to keep some people from missing a mortgage payment or skimping on food or medicine – would cost only around $563bn each year.

A larger income, to ensure that no American fell into absolute abject poverty – say, $12,000 a year – would cost around $3.6tn. That is a big number, but one that once again seems far more reasonable when considered through the lens of the Panama Papers and the scandal of global tax evasion. Because the truth is that we have all been robbed, systematically, by the world’s wealthiest people, for decades. They have used those stolen dollars to build yet more wealth for themselves, and all the while we have been arguing with ourselves over what to do with the leftover pennies.

Enough. We have the money to solve our problems. The first step is to stop the global elite from hoarding and hiding it. …

It’s not just America:

Offshore finance: more than $12tn siphoned out of emerging countries

More than $12tn (£8tn) has been siphoned out of Russia, China and other emerging economies into the secretive world of offshore finance, new research has revealed, as David Cameron prepares to host world leaders for an anti-corruption summit.

Oil-rich countries including Nigeria and Angola feature as key sources of offshore funds, the research finds, as do Brazil and Argentina. Henry said the owners of this hidden capital were often so keen to secure secrecy and avoid their wealth being appropriated back home, that they were willing to accept paltry financial returns rather than investing it in ways that might promote economic development. Charging just 1% tax on this mountain of offshore wealth would yield more than $120bn a year, almost equivalent to the entire $131bn global aid budget. …

By enabling tax avoidance/evasion for the rich in other countries we are depriving those governments of income. It seems on the basis of the Mossack Fonseca leaks that NZ is particularly popular with the South American rich. In short, for the sake of some lawyer’s fees here, New Zealand is exporting poverty to those countries.

Key says we have no obligation to other countries. That it’s all perfectly legal. Yes, that’s exactly the problem.

14 comments on “NZ exporting poverty”

  1. save nz 1

    Good post, but it sounds like much of it has crossed the line into being illegal….

    Star wars becomes real…

    “Henry, a former chief economist at consultancy McKinsey, told the Guardian his research underlined the fact that tax-dodging was not the only motivation for using tax havens – criminals and kleptocrats also made prolific use of their services to keep their wealth secret and their money safe.

    He said the list of users of offshore jurisdictions was like the cantina scene in Star Wars, where a motley group of unsavoury intergalactic characters is assembled. Henry said: “It’s like the Star Wars scene: you have the tax dodgers in one corner, the arms dealers in another, the kleptocrats over here. There’s also those using tax havens for money laundering, or fraud.”

    https://www.theguardian.com/business/2016/may/08/offshore-finance-emerging-countries-russia-david-cameron-summit

  2. save nz 2

    NZ exporting poverty

    It used to be milk and fish now NZ seems to be exporting transnational profits and poverty…

    Go IDU!

  3. Murray Simmonds 3

    “Key says we have no obligation to other countries.”

    Eh??? I thought the twit was IN FAVOUR of globalism!

    Where did i go wrong in my reasoning?

    • Bill 3.1

      Well, you assumed that globalisaton was a kind of internationalism. It isn’t. Whereas internationalism has a geographical component (alongside such things as solidarity – read ’empathy’), globalisation is about the formation and protection of global elites via the promotion of an abstraction that does not entail those elites having any sense of obligation to any place, country or persons.

      Something like that anyway 😉

  4. Draco T Bastard 4

    Key says we have no obligation to other countries. That it’s all perfectly legal. Yes, that’s exactly the problem.

    Just because it’s legal doesn’t make it right.

    When you look at the laws that National put in place there are quite often laws that make that which isn’t right legal.

  5. Sabine 5

    and it should not be forgotten that for many in NZ poverty has increased.

  6. Colonial Viper 6

    When was there ever a real shortage of electronically generated, keyboard made money to spend on services and goods for the poor?

    • Draco T Bastard 6.1

      Once the rich decided that they needed all the people to work harder to make them richer. In other words, always.

  7. whispering kate 7

    The PM and his “we have no obligation to other countries”. Don’t presume PM that the “we” are in agreement with you. I presume that is his attitude to the many NZ wealthy tax avoiders who also hide their wealth in other tax haven jurisdictions, and who deny this country tax revenue for health, social services, defence etc. Does he also have no obligation as well to this country? I can imagine that the PM has got all his bankster funds stashed in tax havens and doesn’t have a moral problem with that either along with his other low life mates. What a disgusting attitude to have. This government can beggar people who are vulnerable and on benefits, cut taxes for the wealthy and capture PAYE slaves and feel righteous about it while deliberately avoiding paying their way as they should.

    Because it “might be legal” is no excuse and this country has become a nation to be ashamed of. We may never be able to rise out of this filth ever again and its unforgiveable. Why have we the electorate allowed this to happen? Have we all lost our moral compass?

  8. joe90 8

    It’s not just America:

    Looting and plundering, 21st century style.

    The twin sister of DRC’s leader Joseph Kabila twin sister, the nephew of South Africa’s President Jacob Zuma and business people allegedly linked to Zimbabwe’s President Robert Mugabe are all named in the Panama Papers. The Mossack Fonseca leak – the biggest data leak ever – have revealed the names and alleged financial affairs of top officials from at least 15 different sub-Saharan African countries or people linked to them have been named.

    […]

    At a conference last year, former South African president Thabo Mbeki noted that a report commissioned by the AU had found that Africa was losing $50 billion (43 billion euros) a year through illicit cash flows – money that could go into education, health care or investments on the continent. A report by the Organisation for Economic Co-operation and Development (OECD) even puts the amount at $150 billion

    http://www.dw.com/en/the-panama-papers-growing-impact-on-africa/a-19174621

    https://www.odi.org/comment/10385-hidden-heist-%E2%80%93-offshore-plunder-hurting-africa

    http://allafrica.com/stories/201604111064.html

    • Draco T Bastard 8.1

      And that’s the rich for you – they simply don’t give a shit about anybody or anything except themselves and how rich they are. This is why we simply cannot afford them.

  9. Bernard 9

    At last someone is getting to the central point. This must look good on Helen Clark’s CV as head of the UN Development Programme (aimed at reducing poverty and furthering human development). Here’s her previously proudest moment on her CV heralding leading a country that doesn’t give a rat’s arse to the thievery of millions of dollars from overseas societies. It cares more for coming up with fairy tale stories of why trusts are good and spins lines about how we are so good at disclosure even nobody could possibly know which string to pull first. John Key on the radio talking about the agreements we have with over 100 countries then naming automatic disclosure with ONE country (Australia). Wow, how easy is it then to avoid a trans-tasman tie up between trusts I wonder. NZ, clean-green (yeah right) and exporting misery, poverty, exploitation to the people of the world. It’s all right here eh Jong Kee.

  10. I don’t see why we need to treat people differently based on their income. At the end of the day, whether a person needs a loan to pay for his cars or a mortgage to pay for his house versus having the upfront cash for it, people should want to give a portion of it back to the society that has made it possible to even have any money at all to begin with.

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