Panama Papers, aspiration and justice

The Panama Papers, with their revelations in the Guardian and other news media, of cash deposited in financial arrangements far from the prying eyes of tax officials and with all the transparency of a lead-lined coffin[1] have created quite a stir.

Icelandic Prime Minister Sigmundur Davíð Gunnlaugsson has had to step down from office “amid mounting public outrage that his family had sheltered money offshore.”[2]

In the U.K. David Cameron, after a week of prevarication about funds managed by his late father and from which he benefitted, felt compelled to publish a summary of his tax returns, leading to a small flurry of similar revelations from senior politicians. One muses, in the light of these revelations, without casting aspersions on any who have revealed their tax affairs to date, that surely the point of these offshore trusts is that they do not fall within the purview of HMRC, and would not therefore appear on any returns to that body. But, we move on. And we move on, and backwards in time, to discover that it was ever the case that the rich use their wealth and power to create systems that favours their continued and increasing wealth and power, and to the moral dimension to this. I turned in my memory to the prophet Micah

Woe to those who plan iniquity, to those who plot evil on their beds! At morning’s light they carry it out because it is in their power to do it. They covet fields and seize them, and houses, and take them. They defraud people of their homes, they rob them of their inheritance. (Micah 2:1-2)

The arrangements in Panama and in places like the British Virgin Islands are often no more than complicated systems of smoke and mirrors to hide the beneficial owners of capital and property. Furthermore, in what Margaret Hodge called the “incestuous world” of tax professionals we find individuals swapping between the roles of poacher and gamekeeper in the game of making and enforcing tax regimes and avoiding, and sometimes evading, such regimes. Whoever does the technical work, they do it at the behest of their paymasters, who plan and plot their immunity from tax because they can, because they have power, because they control or influence the decision makers if not being those themselves. They accrue fields and houses, and much besides, at the expense of others. The London property market is a case in point, in a vast social cleansing[3] that sees the poor being driven from their homes by a combination of rising prices and a government imposed austerity regime that has enriched the already wealthy and impoverished still further those at the bottom of society’s financial league tables. Is it fraud? Is it robbery? It’s all perfectly legal goes the cry from those who benefit from these systems. And the cry goes back in answer: “Of course, it is! You made the laws which deem it so.” That the bent of such laws and such a culture is towards the wellbeing of the already wealthy is evident in the fact that there are ten times the number of government inspectors charged with tackling benefit fraud (Up to 3,250 from 2,600 in February last year making this the only area of the Civil Service experiencing growth?) than with tax evasion by the wealthiest UK residents.[4]

Such arrangements may not be illegal, but even David Cameron has said: Frankly some of these schemes where people are parking huge amounts of money offshore and taking loans back to just minimise their tax rates it is not morally acceptable.[5] Under different laws, under laws driven by a different and more democratic understanding of society (call that morality if you like) these systems created to avoid paying a fair share of one’s receipts (I hesitate to call them earnings) would indeed be called fraud or robbery as Micah calls them. Because, let’s be clear, where some become rich to such an extent that a person can hand over a £3.5 million Knightsbridge home to another for £1, thus avoiding stamp duty,[6] then that money is lost to the exchequer and therefore from others whose lifelong labours will never result in the purchase of a property costing even 10% of that Knightsbridge home, despite the fact that they may have paid tax week in week out on much more meagre income. As Jeremy Corbyn has said, How can it be right that street cleaners, teaching assistants and nurses pay their taxes, yet some at the top think the rules simply don’t apply to them?[7]

Thinking that wealth lifts one beyond the rules applying to ordinary mortals is a sign of that sense of entitlement the possession of which those in receipt of state benefits are often accused.[8] (One might say that national insurance benefits are indeed an entitlement but that is another issue.) That sense of entitlement felt by some wealthy and powerful people is articulated in former minister Sir Alan Duncan’s apparent view that wealth is the only sign of success worth measuring. He said that parliament risked being stuffed full of low-achievers who hate enterprise, hate people who look after their own family and know nothing about the outside world.[9]

There are many who have achieved a great deal in their lives, have looked after their families to the very best of their abilities, worked harder than Sir Alan Duncan can ever imagine, and know, I suspect, a good deal more than he does about a world well beyond the gilded streets in which he walks. And many of those will not envy Duncan or others like him but will ask only that they pay their way, that they contribute as they are able to our common life.

Indeed, they might suggest he and others follow the example of the New York state rich who, understanding that we are indeed all in it together, have recently asked their political leaders to raise their taxes.

This is an extract of their letter:

Dear Governor Cuomo and Legislative Leaders,

We are upper‐income New Yorkers who treasure the quality of life in our state.

However, we are deeply concerned that too many New Yorkers are struggling economically, and the state’s ailing infrastructure is in desperate need of attention.

We cannot afford to ignore these challenges. As business leaders and investors, we know that the long-term stability and growth of a company requires investments in both its human capital and physical infrastructure. The same is true for our state.

At the same time these people were supporting lower taxes for people in the lower wealth brackets.

They concluded their letter with these words:

Everyone does better when everyone does better. We urge Governor Cuomo and the New York state legislature to expand the current millionaires tax and ensure that upper-income New Yorkers like us keep doing their part to invest in our state.[10]

Everyone does better when everyone does better.

We are all in this together. That mutual dependency is what democracy must be about or it is not democracy. And, as Aditya Chakrabortty has said, the Panama Papers reveal not merely issues of wealth and taxation but more importantly the corruption of our democracy.^{^[11]} Corrupt democracy where the rich set the agendas, control the debates (despite the niggles of Twitter and the blogosphere), make the rules and opt out of any responsibility for their neighbours is a breeding ground for injustice.

Of injustice, there is only so much that a society can bear before breaking down. Ian Jack wrote of a visit to Port Talbot in 1980 during the three-month long steel strike. He wrote of meeting people who described themselves as “middle-of-the-road socialists” who were quite likely to put a good word in for Prince Charles or a Tory such as Ted Heath (“a decent chap, old Ted”). “Our father brought us up to be courteous, always to treat other people with respect.”[12]

That word respect seems to be key to me. Perhaps that word has undertones of deference given the era but at heart it is about treating each other as human beings whatever our wealth or social status. I remember well my grandfather’s still present anger when telling me about a time many years before when, working as a mason on a wealthy woman’s house, he asked for some water. It was brought to him in a jam-jar, a glass clearly being too good for a common working man. Respect. Its absence is palpable, and it generates lasting anger.

Jack ended his article with these words, articulated in what he sees as a gathering sense of misgovernment and betrayal: Many of the people I meet now in London seem angrier and more disaffected than anyone I encountered in Port Talbot. Really, who doesn’t feel it? The other day, watching the TV news, I heard the person beside me shouting: “Heads on poles! We need heads on poles!” [13]

Cameron has announced new rules to end tax evasion without deterring “aspiration.”[14] Well, time will tell but as the economist Thomas Piketty has said in this area there is a huge gap between the triumphant declarations of governments and the reality of what they actually do.[15]

We will wait and see but we will do so in the knowledge that when political channels are closed off, when the state looks like it is being run for the benefit of the rich and powerful then cries for heads on poles might not be far away. The likes of Occupy and Nuit Debout, among other protest movements should alert us to the fact that people will not tolerate nor acquiesce to such injustice forever.

And while we wait and hope to see action resulting in a fairer tax distribution and a more just society for all, I return to that word used by Cameron in my previous quote from him. Aspiration. Cameron, like Duncan, seems to see wealth as the only valid and worthwhile outcome of aspiration.

I will tell you my aspirations, Prime Minister, as one who, apart from a couple of spells on benefits when I could not find work and previous receipt of benefits when even two jobs didn’t reward me with a living wage, has worked hard all his life, and who has studied hard and paid my way and contributed to society as best I could through political engagement and volunteering; I will tell you to what I aspire. It is this: a just society, wherein we each recognize our dependence on the other, our common humanity, our duty to those who are in need and our responsibility to use our gifts and graces and assets for the common good. If my taxes help to achieve that then I pay them gladly. I ask only that we all do the same, and that laws are made and enforced to ensure that happens.

You have spoken, Prime Minister, about your support for this nation’s Christian values, so I end with another quote from that biblical prophet: What does the Lord require of you but to do justice, and to love kindness, and to walk humbly with your God? (Micah 6:8)

It is that to which I aspire, not to a wealth which at best ignores the needs of my sisters and brothers and at worst tramples them in the dirt. That is not aspiration; it is selfishness and it is the evil of which the prophet spoke, and speaks still.

[1] http://www.theguardian.com/commentisfree/2016/apr/12/frankie-boyle-tax-havens-panama-papers

[2] http://www.theguardian.com/world/2016/apr/05/iceland-prime-minister-resigns-over-panama-papers-revelations

[3] http://www.theguardian.com/uk-news/2015/aug/28/vast-social-cleansing-pushes-tens-of-thousands-of-families-out-of-london

[4] http://www.theguardian.com/uk-news/2016/apr/13/benefit-or-tax-evasion-row-over-the-tories-targets

[5] http://www.belfasttelegraph.co.uk/news/panama-papers/panama-papers-david-cameron-repeatedly-condemned-tax-avoidance-as-immoral-34610868.html

[6] http://www.theguardian.com/news/2016/apr/09/tory-donor-was-trusted-middleman-for-oil-firm-involved-in-bribes-inquiry

[7] Guardian 12-4-2106

[8] http://www.dailymail.co.uk/news/article-2052749/Our-Shameless-society-How-welfare-state-created-age-entitlement.html

[9] Guardian 12-4-2016

[10] http://www.theguardian.com/commentisfree/2016/mar/21/new-york-millionaires-who-want-taxes-raised

[11] http://www.theguardian.com/news/commentisfree/2016/apr/10/money-offshore-corrupt-democracy-political-influence

[12] http://www.theguardian.com/commentisfree/2016/apr/09/port-talbot-our-rising-anger-about-the-status-quo-has-deep-roots