Pressure for Offshore Tax Haven Clampdown

There’s a new global movement afoot to raise public and political awareness of the multi national corporations and high net worth individuals who make use of offshore tax havens to reduce their overall taxation burden.

The movement is seeking to inform the public about how much taxation is avoided or evaded yearly by these corporations and individuals and to thereby inflame outrage that personal taxation increases are regularly necessary, that social security systems in the likes of the UK and USA are at breaking point and that in the future there will be no form of state pension or state assistance in retirement because social security systems are going broke.

In America the Tax Justice Network is leading the fight and seeks to inform the public and also the government about the amount of taxation the US loses yearly as a result of assets being held offshore.

According to recent statistics calculated and published by the Network the US loses over USD 225 billion per year in potential taxation from assets held offshore by high net worth individuals alone, and when you begin factoring in the estimated amounts held offshore by large multinational corporations the statistics are overwhelming. 

Apparently over 31% of the entire net profits of US multinationals are remitted offshore.  But that’s not the main factor upsetting pressure groups seeking fair taxation across the board.  More to the point, as far as they are concerned, is the fact that between 1996 and 2000 almost two thirds of the companies registered in and operating from the US actually reported profit figures so low that they owed no tax at all, and in the year 2000 alone the Network estimates that 82% of ‘large’ US companies and 76% of ‘large’ foreign companies operating in the US paid taxes amounting to less than 5% of their genuine income, allegedly.

The activists putting pressure on governments for a clampdown on the use of offshore tax havens point out the fact that for the average person taxation is not optional, and yet the richer you are the less liable you are to have to ‘opt in’ to the taxation system.  Not only is this universally unfair, it also means that social systems will continue to slide towards bankruptcy, and developing countries will cease to develop and will stagnate in poverty.

According to the fair taxation pressure groups, tax increases and the intensification of pressure on working and middle class citizens to support social systems and overall government spending is simply unacceptable.  These citizens are having their intrinsic wealth whittled away and are having their options for saving to afford their retirement for example, reduced significantly.  Every citizen and every company and corporation has a moral obligation to pay taxation and to be law abiding. 

And yet while there remains an imbalance more and more people are deciding to take the only action they can to secure their own assets, profits and financial futures and this is why there has been an estimated 1,500% increase in money and assets transferred and deposited offshore in the last 15 years.

It seems that the pressure for an offshore tax haven clampdown needs to highlight the fact that unless things change they will deteriorate further because the system as it stands helps those who help themselves.