Not for the weather, but the tax-climate!

“The ceiling on taxation of capital gains reflects the national belief that speculation is a more worthwhile way to make a living than work.”

– Calvin Trillin, Uncivil Liberties, 1982.

Time was when both death and taxes were considered unavoidable. But in the light of the latest revelations contained in The Paradise Papers, Death would now seem to be the only justifiable claimant to inevitability.

Of the 13.4 million files revealed by the Süddeutsche Zeitung, the International Consortium of Investigative Journalists (ICJI) and some 90 global media partners, 6.8 million of those files stem from the offshore law firm Appleby. A further half million derive from the Asiaciti Trust based in Singapore, with six million obtained from corporate registries spanning 19 tax havens.

Binoy Kampmark, a former Commonwealth Scholar at Selwyn College and a regular contributor to CounterPunch magazine, noted that ‘tax havens’ was “a field where denial is followed by qualification, and then, ultimately, a dismissive shrug.” Nothing exemplifies this more than the dispute over what a ‘tax haven’ constitutes, he added, recalling, for instance, that Bermuda’s Minister for Finance, Bob Richards rejected the suggestion that his country wa-s a joyful tax haven for the stinking rich and robustly powerful.

Language and perception is everything here, wrote Kampmark. “A tax haven, according to the Bermuda side of things, suggests terrorism and money laundering. A no-tax or low-tax threshold is an entirely decent incentive. ‘We didn’t pass a law to say ‘that the Googles of this world don’t get taxed,’ disclaimed Richards.

In fact, it was Bob Richards who was sufficiently irritated by the accusing finger being pointed Bermuda-way to throw out a counter-accusation – that Britain was itself a tax haven: “You have more billionaires resident in London than any place on earth. They are not there for the weather, they are there for the tax climate. We have a double standard going on here.”

Richards does have a point, noted Kampmark approvingly. “In the world of tax havens, countries with a supposedly more keen disposition to netting tax are found wanting. The Netherlands, for instance, is a the place of choice for General Electric, Heinz, Caterpillar, Time Warner, Foot Locker and Nike. In the sharp observation of Jesse Frederik, “The land of tulips and windmills, the home of the International Criminal Court, and the number one tax haven for American multinationals.”

The Paradise Papers have revealed the activities of a few big fish, though again, there are few surprises, wrote Kampmark, President Donald Trump, for instance, being the least surprising of all. “Despite railing against the unelected global elites who do boardroom deals, his circle is filled with that very same ilk. The corporate boardroom, in fact, stalks the land and haunts the cabinet.

Kampmark picked on US Secretary of Commerce, Wilbur Ross. His private equity firm W.L. Ross & Co., LLC was a company that became, in time, one of Appleby’s biggest clients. Despite divesting most of his empire, he retained a stake in the shipping company Navigator Holdings (NH), with Ross being its largest shareholder. NH makes millions from an energy firm whose owners include Russian President Vladimir Putin’s son-in-law and a sanctioned Russian tycoon, besides doing extensive business with the Russian gas processing and petrochemicals company SIBUR.

Democrat Senator Richard Blumenthal of Connecticut understandably took the opportunity to say Ross had misled Congress and the American people by concealing his ongoing stake in Navigator Holdings. “Only after a thorough investigation can Americans be sure Secretary Ross really has their best interests at heart,” Blumenthal charged.

“Do these revelations actually matter?” queried Kampmark. “The very fact that the Paradise Papers duly followed in the tracks of the enormous documentation in the Panama Papers is evidence that the enterprising accountant is always ahead of the plodding taxman.

“The problem is so endemic that even the ICIJ supplies a disclaimer noting how offshore companies and trusts have “legitimate uses”. “We do not intend to suggest or imply that people, companies or other entities included in the ICIJ Offshore Database have broken the law or otherwise acted improperly.”

“What is easy to ignore is the degree of collusion that many nations afford companies. Some are in the habit of encouraging companies to operate on their territory, the incentive here being a zero tax rate. When its documented as well as it has that companies like Apple and Google and Microsoft – these incredibly profitable companies – are just able to use the tax system like a piñata, that just reinforces the belief that no-one cares about the plight of middle-income families,” concluded Kampmark.

Suman Varandani, writing in International Business Times, noted that the Bermuda law firm Appleby Group Services Ltd., which was named offshore firm of the year by Legal 500 UK in 2015, has branches in Bermuda, Isle of Man, Jersey, Guernsey, British Virgin Islands, Cayman Islands, Mauritius and the Seychelles, and has a presence in Hong Kong and Shanghai as well.

“The Paradise Papers reveal offshore interests and activities of more than 120 politicians and world leaders, including Queen Elizabeth II whose private estate, as of 2007, indirectly invested in a rent-to-own loan company that controlled BrightHouse, accused by consumer watchdogs and MPs of predatory tactics such as selling household goods to cash-strapped Britons on payment plans with interest rates as high as 99.9 percent,” ICIJ said.

The leaked files from Appleby, the offshore law firm, include details of tax planning by nearly 100 multinational corporations, including Apple, Nike and Uber.

The offshore industry makes “the poor poorer” and is “deepening wealth inequality,” Brooke Harrington, a certified wealth manager and Copenhagen Business School professor said, adding: “There is this small group of people who are not equally subject to the laws as the rest of us, and that’s on purpose.”

These people “live the dream” of enjoying “the benefits of society without being subject to any of its constraints,” he said.

The leak has prompted Canadian tax authorities to review reports linking a key fundraiser for Prime Minister Justin Trudeau to offshore trusts in the Caribbean.

In a recent editorial, The Guardian of Britain (one of the ICJI’s 90 global partners) noted: “The Paradise Papers are a reminder of how erratic and sometimes downright obstructive the British government has been in its attitude to reforming domestic taxes, and in supporting international attempts to tighten up transparency and accountability rules. Less than a fortnight out from a budget that is set to maintain the cap on public spending, the discovery of so many who are so willing to flout the rules by which most of us live has provoked the kind of outrage that should be a watershed.

“Unlike last year’s leak of the Panama which exposed illegal tax evasion, the Paradise Papers have not uncovered criminality. Instead, they reveal a state of mind where it is entirely normal to ignore what most citizens regard as the wider obligations that accompany great good fortune. So, for example, while it is true that until recently the Queen did not even pay tax, it is shocking that her financial advisers saw nothing wrong with investing several million pounds of her personal wealth through such a convoluted offshore fund.

“This week, despite the revelations, Prime Minister Theresa May ruled out using UK financial clout to demand a public list of beneficiaries of offshore trusts. And Her Majesty’s Revenue and Customs (HMRC), the government department that polices tax gathering, is widely accused of having being captured by the tax avoidance industry.”