The Kochs, the Crooks and The Profitable Business of Not Paying Taxes

August 3, 2015

By Joe Rothstein
Editor, EINNews.com

A new report by the British economic research organization Tax Justice Network estimates that the amount of world wealth parked in tax havens is far greater than all previous estimates. According to work compiled by James S. Henry, former chief economist for McKinsey & Co., that amount is at least $21 trillion and likely much more, as high as $32 trillion.

It’s hard for mere mortals to wrap their heads around figures that go into the trillions. But for one reference point, compare it to the 2015 U.S. federal budget of $3.8 trillion. A budget that includes all federal spending for Social Security, Medicare, military costs---everything. The amount hidden in tax havens is 5 to 8 times greater.

These numbers just reflect hidden cash. They don’t include untaxed estates, yachts, gold, art and other things big money buys. These were outside the scope of Henry’s report.

(the report itself can be accessed at
http://www.taxjustice.net/cms/upload/pdf/Price_of_Offshore_Revisited_120722.pdf)

If you don’t have time to read the report, let me just give you the shocking headlines.

Money laundering and tax avoidance no longer are just the province of secretive places like the Cayman Islands. It now takes place in the financial capitals of the world: New York, London, Geneva, Singapore, Hong Kong,

And it’s not the work of a dark network of off-the-books rogues. So called "wealth management" is the most profitable and fastest growing revenue stream for the biggest banks and money funds in the U.S. and the world, abetted by many of the world’s most prestigious legal, accounting and PR firms.

At least a third of all the private financial wealth and nearly half of the offshore wealth is now owned by the world’s richest 91,000 people, 0.001% of the world’s population.

Perhaps most discouraging of all, a growing number of U.S. states like Nevada and South Dakota are passing legislation to entice this money to get the same no-tax, low-tax advantages they would get off shore.

This all takes on particular relevance with news filtering out of the recent Koch Brothers retreat, where 450 carefully selected attendees were recruited to support a political agenda specifically designed to increase the wealth of the wealthy and lower their contribution to public services even more. It’s a good bet that all or most of those at the retreat were among those 91,000 richest people who already fail to pay their fair share.

The Tax Justice report opens with recognition that there is no interest group more rich and powerful than the rich and powerful. That interest group now cuts across state and national borders, industries and economic activity, legal and illegal. It includes those who made fortunes running corporations, developing real estate, selling drugs, laundering money, exploiting resources, and running dictatorial regimes. And, in no small measure, it includes, like the Waltons, those lucky enough to be born into the right families.

Most people don’t begrudge the wealthy their wealth. What’s not forgiveable is their greediness in not paying their fair share of the cost of providing education, national defense, infrastructure, public safety, a social safety net, and other costs that keep civil society civil.

And now, as with the Kochs and their clones around the U.S., we’re seeing a massive effort, financed by unlimited secret money, to change the rules so that what they’ve been doing illegally or immorally offshore for years can be considered legal here at home.

What the Tax Justice report shows is that if the billionaires and their acolytes who work so hard to avoid taxes would pay their fair share, the U.S. would not be struggling to finance the cost for basic public services.

The capture of those rogue dollars should be front and center the most important issue discussed in the 2016 presidential campaign. Win that fight and all other problems become that much easier to solve.

(Joe Rothstein can be contacted at joe@einnews.com)