Hard Times for Tax Evasion

 

Drawing by Bruce Eric Kaplan.

Here's a little gratification, from John Cassidy at The New Yorker: 

at the start of this week, the EU Tax Observatory, an independent research laboratory based at the Paris School of Economics, released a new report on global tax evasion, which contained some positive news. “We estimate that offshore tax evasion has declined by a factor of about three over the last 10 years,” the report says. “This success shows that rapid progress can be made against tax evasion if there is the political will to do so.”

That's literally a factor of more than three: before the 2010 passage of the Foreign Account Tax Compliance Act (FATCA), 90 to 95% of offshore wealth went unreported to the tax authorities, and the US government alone was losing $100 billion a year to rich Americans parking their gains out of reach. Now it's more like 25%. Other countries, including the members of the OECD, followed suit in 2014, adopting a Common Reporting Standard for accounts opened by foreign residents:

This agreement effectively set up a global system of exchanging private banking information. As of October of 2022, the new report notes, more than a hundred tax jurisdictions, including many offshore tax havens, have applied the new rules, and countries have reached nearly five thousand bilateral agreements to exchange financial information: “This revolutionary development shows that new forms of international cooperation, long deemed utopian, can emerge in a relatively short period of time.”

Sadly, the US has refused to join the CRS, making it easier for the ultra-rich from elsewhere to use our country as a haven from their own tax obligations. This doesn't seem to be entirely the fault of the Trump administration (it has a good deal to do with the problem of reconciling federal law with the laws of bank-loving states like Joe Biden's Delaware and Donald Trump's Florida, along with Nevada and Wyoming), but it was in March 2017 that the European Parliament announced the refusal, so I figure that's when negotiations broke down. And guess whose very large real estate business hugely depended, and I imagine still does, on laundered money from plutocrats in petrostates like Russia and Saudi Arabia.

To me, this is the kind of issue that really matters in the core struggle between those who own almost everything already and aim to have it all, and the rest of us. It's not as exciting to talk about as abortion, or book bans, or even voting rights, but this is what those people truly care about—the other "conservative" stuff is to keep their voters engaged, and is changing all the time as the situation changes—and it looks like a victory for our side.

Did the special craziness of the right start, in point of fact, with the 2008 financial crisis and the efforts to fix the situation, such as they were, of the incoming Obama administration? The Astroturf Tea Party certainly did. Is there a new vulnerability among the incredibly rich, dating back there, making them more irrational than they were before? Between Elon Musk (Wall Street Journal reports that seven banks that loaned him $13 billion for the Twitter purchase can't sell the loans, and are expecting to lose at least 15% of their investment)

and the Republican majority in the House of Representatives, which seems unable to elect a Speaker. These people are not well.