Wednesday, May 6, 2009

Is Obama serious about tax haven reform?

At the G20 last month, one real sign of progress appeared to be G20 nations' renewed resolve to start clamping down on tax havens. Headlines across the US this week proclaim Obama's professed intention to crack down on overseas tax-havens.

I met Richard Murphy, an authority on tax havens, at the G20 summit in April. I wondered what he had to say about Obama's recent initiative. Murphy reflects on the shortcomings of Obama's much-touted "clamp-down":

What companies are seeking is a system of operating beyond accountability, without (in the literal sense) government control. In effect they have made the declaration that they are above the law; that for them there is no society. In so doing they reflect the attitude of the neo-liberal hard right who would demolish all semblance of society in the pursuit of individual greed – and will, if they succeed destroy civilisation as we know it.

Obama has made the mistake of tipping at the mechanics of this process. That is a mistake. I know his advisers have suggested he should have looked at unitary taxation as the solution to this issue. I have argued for this. We need it.

The reality is that in accounting and tax we are being faced with choices: choices about who governs. Not a choice about on whose behalf there is government: a choice about who governs. Is it government or is it corporations and the elite that controls them? The Left has to get its head round this issue. It has to tackle it, and embrace solutions that ensure the power of government by and for the people of the world survives. If it doesn’t we all go down with it.

Obama has done something useful. But he could have done so much more. It’s not a day to celebrate.

For the specifics, visit Richard's blog.

As Richard points out, business groups are acting ticked-off by Obama's recent proposal. Don't cry for them. As Richard hints, the fuss is likely for show; theater that has the effect of making the public believe that a "socialistic" president wants to over-regulate capitalism. When he's still doing nowhere near enough.

I think it should by now be clear to everyone that the Obama Administration is firmly on the side of the American banking and business establishment.

* Photo: by Jotman. Shows Richard asking UK PM Gordon Brown a question about tax havens at the G20 (for a video of the question, and Brown's response see this post)

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