- Date published:
7:38 am, April 16th, 2016 - 78 comments
Categories: accountability, class war, tax - Tags: nothing to hide nothing to fear, open, panama papers, sunlight, tax, tax evasion
In continuing fallout from the Panama Papers:
UK and European allies plan to deal ‘hammer blow’ to tax evasion
Britain and its European allies have announced new rules designed to be a “hammer blow” against tax evasion in direct response to the Panama Papers leak that exposed how the world’s richest and most powerful people hide their wealth from tax authorities.
George Osborne announced on Thursday, in partnership with his counterparts from France, Germany, Spain and Italy, regulations that will lead to the automatic sharing of information about the true owners of complex shell companies and overseas trusts.
The chancellor said the rules, agreed this week, were “a hammer blow against those that would illegally evade taxes and hide their wealth in the dark corners of the financial system. …
Taken at face value this is excellent news. But a cynic might wonder whether this proposal is just a sop to public anger, a distraction that will never be implemented effectively.
Here’s one suggestion that seems to me the only way to be sure about eliminating tax evasion (an excellent piece by Martin Van Beynen):
Let’s open our tax returns for all to see
With the wave of tax scandals still cresting – thank you leakers and journalists – momentum is gathering for a tax revolution around the world. No more hiding assets, no more tax shelters, no more secreting profits in the Bahamas, no more foreign trusts is the increasingly strident cry.
One measure that needs to be seriously looked at is making every taxpayer’s return publicly searchable. … It sounds revolutionary. New Zealand has inherited an English coyness about talking about income or how much tax people pay. Money is vulgar and a gentle woman or man does not discuss anything as down to earth as salaries and tax.
Income is regarded as an intensely private matter because of the strong feeling that it’s no-one else’s business. But this is clearly wrong. It is very much our business what other people earn and pay in tax.
Madness? It would never work?
It’s not as bizarre as it seems. In Scandinavia tax returns have been public for over a century. In Sweden, the returns of middle to high income earners are searchable. The Finnish tax administration publishes tax returns online, with searches costing about a dollar. Norway goes a step further by publishing every single taxpayer’s income, tax payment and net worth.
I have a friend in Norway who finds nothing to worry about in having his details publicly searchable. I’d be happy to sign up for it in NZ.
Such transparency would be a great weapon against tax evasion. … The greatest advantage of an open tax system is that it would change the culture of secrecy. If every income earner’s tax return was available for scrutiny, business would have to bend to the pressure of releasing their own tax payments. If neighbour’s could search each other’s returns they would expect to be able to do the same to a big corporation or the local garage business.
With better compliance would come greater tax income for the state, a fairer tax system and perhaps a reduced tax burden on all of us.
Serious about cracking down on tax evasion? This is the way to go.