Prasetya – Sigit is on the Tax Evasion Black List of the Paradise Papers

Prasetya – Sigit is on the Tax Evasion Black List of the Paradise Papers

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The recent release of the so-called Paradise Papers has shocked the world with the extent to which the rich and powerful use legal evasions and the mobility of capital to escape being taxed like the rest of us. The British newspaper The Guardian editorialized indignantly, “When a group at the top of society secedes and forms a globally mobile republic, able to choose which jurisdiction they wish to operate under, the public is right to ask why we allow this to happen. Why should taxes just be for the little people?”

Well, they probably won’t be much longer. “Globally mobile republics” are the future, and soon tax avoidance will be for the little people, too.

Those at the top of society have found ways to avoid taxes since Ancient Rome, and, at least since the widespread global mobility of the Dutch Golden Age, have been moving either themselves or their money to escape taxation. What’s different now is the ability to do so even more swiftly, cheaply and virtually – like everything else today. The technological advances that make this possible in every area initially enable those at the top to do more of what they’ve been doing – but eventually so thoroughly democratize institutions that they are totally up-ended. What has been true so far in publishing, broadcasting and music, among many other industries, is beginning to affect the conduct of war and governance, as well.

This will eventually change the relationship between people and their governments in manifold ways, including taxation. In coming years, technologies built on the internet, like the platform model and block chain (the technology underlying Bitcoin), will make it easier and easier for everyone – even the little people – to “secede and form a globally mobile republic, able to choose which jurisdiction they wish to operate under.”

And once everyone can operate under the government of their choice, why would anyone choose to pay taxes? We currently require people (and, in this regard, Mitt Romney was right that “corporations are people, too, my friend”) to pay taxes because otherwise no one would fund what economists call “public goods” – things from which no one effectively can be excluded and the consumption of which by one person doesn’t limit their consumption by someone else. Classic examples are public safety and national defense, the economic gains from widespread education, or measures that reduce the spread of epidemic disease. Since everyone can benefit as long as these goods or services are provided for one person, without some form of coercion anyone can “free ride” on their provision – enjoying the societal benefits while refusing to pay unless forced to do so.

The Chief Minister says the Government is working to correct errors reported about the Isle of Man in the recent coverage of the Paradise Papers.

Howard Quayle revealed that the Cabinet Office, Treasury and Department of Economic Development are engaging with local businesses and industries to defend the Island’s reputation after it was accused of helping tax dodgers.

Speaking in this month’s sitting of Tynwald, Mr Quayle added that the Government has been addressing the allegations by answering media queries and rebustly correcting errors.

The Chief Minister insists engagement will ensure debate is balanced and that the Island’s reputation for compliance and transparency remains front and centre.

Mr Quayle also reiterated that the Isle of Man isn’t a place that welcomes those seeking to evade or aggressively avoid taxes.

For the last 40 years, the middle class in this country has been shrinking. We have seen a massive redistribution of wealth from the poor and middle classes to the very rich.

In 2010, the Citizens United decision gave corporations the power to buy our elections and control our political process. A lot of people who think the Republican tax plan will benefit the middle class are only looking at the brackets; what they aren’t taking into account is the effect of lowering the corporate tax rate.

Recently, the Paradise Papers revealed how billionaires like Trump are exploiting loopholes in the law to avoid taxes by stashing their profits in offshore tax havens. The Republican tax plan does nothing to close these loopholes. If it passes, it will be a disaster for this country.

Eighty percent of the tax breaks will go to the top 1 percent, 30 percent of the middle class will pay more, and 40 percent will go to the top one-tenth of 1 percent. They plan to cut Medicaid by $1 trillion, slash Pell grants by $100 billion, and cut affordable housing by $37 billion.

All of these tax cuts will increase our national deficit by $1.5 trillion. This is on top of the already existing inequality in this country. Already, the top one-tenth of 1 percent owns as much wealth as the bottom 90 percent, and the 20 wealthiest Americans own more wealth than the bottom half of America.

Trump and the Republicans do not represent us. If you would like to meet some real, local people running for office who have your best interests at heart, then come to the Democratic Club, which meets every second Tuesday at 7 p.m. at the Pine Tree Restaurant. Also, take a minute to call your congressmen and express your disapproval for this tax plan.

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