The un-taxed $21 trillion

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tion anymore—though plenty of places like Singapore and Switzerland, he notes, still specialize in providing “secure, low-tax physical residences” to the world’s rich. insey & Co. He is the author of the book, “The Blood But today, “offshore” wealth is virtual. Henry describes Bankers,” as well as articles for publications including “nominal, hyper-portable, multi-jurisdictional, often The Nation and The New York Times. Henry obtained in­ quite temporary locations of networks of legal and qua­ formation from the Bank for International Settlements, si-legal entities and arrangements.” A company may be the International Monetary Fund, the World Bank, the located in one jurisdiction, but it is owned by a trust lo­ United Nations, central banks, and private sector ana­ cated elsewhere, and administered by trustees in a third lysts and found the outlines of the giant pool of cash location. “Ultimately, then, the term ‘offshore’ refers to La set of capabilities,” rather than to a place or multiple port omits real estate, yachts, race horses, art, and other It’s also important, the report notes, to distinguish forms of wealth the super-rich are hiding, untaxed, in between the “intermediary havens”—the places most offshore tax havens. Henry refers to it as a “black hole” people think of when they think of tax havens, like Mitt in the world economy and notes that “despite taking Romney’s Cayman Islands, Bermuda, or Switzerland— pains to err on the conservative side, the results are as­ and the “destination havens,” which include the U.S., UK, and even Germany. Those destinations are desirable be­ cause they provide “relatively efficient, regulated secu­ rities markets, banks backstopped by large populations of taxpayers, and insurance companies; well-developed cial wealth, and nearly half of all offshore wealth, is now legal codes, competent attorneys, independent judicia­ owned by world’s richest 91,000 people—just 0.001% of the world’s population,” the report says. Those top Thus, the people who avoid paying taxes by moving 91,000 have about $9.8 trillion of the total estimated in their money around are taking advantage of taxpayerthis report, and fewer than ten million people account old Chinese real estate speculators and Silicon Valley Just who is facilitating this process? Goldman Sachs, software tycoons,” and those whose wealth comes from UBS, and Credit Suisse are the top three, with Bank of oil, and from the drug trade. Drug lords, understand­ America, Wells Fargo, and JP Morgan Chase all in the ably, need to hide their ill-gotten gains, but plenty of the top 10. “We can now add this to their list of distinctions: other ultra-rich are simply avoiding paying taxes by con­ they are key players in many havens around the globe, structing complicated trusts and other investments just and key enablers of the global tax injustice system,” the to shave a few more points off the bill they owe in their By the end of 2010, the top 50 private banks alone were managing some $12.1 trillion in “cross-border in­ 10 SOCIALIST ACTION SEPTEMBER 2012 This article is drawn from information at www. taxjustice.net.

The world’s richest people are hiding $21 tril­ lion in offshore tax havens worldwide. Actually, it may be as much as $32 trillion.

While governments slash spending and lay off workers, citing a need for “austerity” due to the recession/depression, the ultra-rich—fewer than 10 million of the seven billion people on Earth—have stashed away an amount equal to the entire U.S. and Japanese economies—beyond the reach of the tax man. This is according to a new report by the Tax Justice Network, an in­ dependent organisation of economists, accoun­ tants, lawyers, and other professionals launched in the British Parliament in 2003.

The lost tax revenue from offshore tax shel­ ters, the report notes, “is large enough to make a significant difference to all of our conventional measures of inequality. Since most of the miss­ ing financial wealth belongs to a tiny elite, the impact is staggering.”

James S. Henry was former Chief Economist for McK­ floating in that nebulous space known as “offshore.”

Keep in mind that this refers to money only—the re­ tonishing.”

Meet the top .001% “By our estimates, at least a third of all private finan­ for the whole mountain of cash.

Who are those people? The report mentions “30-yearhome country.

“Offshore,” according to Henry, isn’t a physical loca­ (Above) Occupy Seattle protest on Tax Day, April 17.

places. ries, and the rule of law.”

funded services to do so.

Big bailed-out banks run this business report notes. their clients.” the problem. growth rate of over 16 percent. rich are banking with the big guys from the start.

tion? An incredibly shrinking share of the wealth!

In any case, as the report argues, “inequality is a po­ “Indebted” countries not really in debt Henry’s report breaks out a subgroup of 139 coun­ and their private bankers.” take advantage of sophisticated tax shelters.

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Socialist Action holds National Convention SOCIALIST ACTION SEPTEMBER 2012 11 ... Fall protests (continued from page 1: “Join fall protests against war abroad & repression at home!”) alism in the Middle East?

Certainly, the U.S. was thwarted in its plans to main­ tain huge military bases on Iraqi soil as part of its greater efforts to retain control over access to strate­ gic energy resources vital to its international econom­ ic competitors, including China. Yet redeployment has not seriously impeded the suppression of the oil workers, the privatization of Iraqi oil, or its exploi­ tation by British Petroleum, Exxon, Chevron, Shell, and other U.S. and European companies. According to Greg Muttitt, author of “What Ever Happened to Iraqi Oil?”, Iraq’s output now places it in the numbertwo position in OPEC, a position previously held by Iran, whose oil exports have been cut in half by U.S.ordered sanctions.

The U.S. government’s momentary preference for “light-footprint warfare”—raids by special operations forces, drone assassinations, proxy militias, cyber­ warfare, etc.—are the options available to an imperial power that has no real military competitors in most regions of the globe. This shift, however, does not cor­ relate to a slowing of military intervention in terms of geography or dollars. The latest Congressional Re­ search Service annual arms sales report was widely commented on by the antiwar community because it documented the fact that in just one year, 2011, the Obama administration boosted export arms sales by $42 billion. In the recent period, the U.S. government has facilitated a jump in arms sales to the developing world from the $9 billion level of the Bush administra­ tion years to $56 billion in 2011.

A stunning proportion of those sales have gone to U.S. allies in the Middle East. John Rees of the Stop the Wars Coalition UK recently wrote, “Between 1950 and 2006 Saudi Arabia purchased $63 billion worth of weapons and equipment through the Pentagon’s For­ eign Military Sales programme. In 2010 it announced a similar amount of military purchases—but in just 15 years, not half a century.”

Proxy warfare, however, is not the only game plan. The U.S. has been upgrading or building new bases in Kuwait, Bahrain, Oman, Qatar, and Jordan. In Kuwait, 15,000 troops are stationed in Camp Arifjan alone.

In addition, the U.S. buildup for war with Iran is in­ disputable. Prof. Vijay Prashad recently described the U.S. naval deployment in the Persian Gulf, a deploy­ ment just boosted by the floating base known as the USS Ponce, as a “traffic jam of American power in the Persian Gulf.” The Ponce joins USS Enterprise and USS Lincoln, both first-class warships that are supported by a considerable battle group, as well as the various marine and amphibious task forces of the U.S. Fifth Fleet based at the Naval Support Activity station in Manama, Bahrain.

The softening up of Iran via sanctions, assassina­ tions, and covert ops continues with the new sanc­ tions designed to lower Iran’s ability to export oil below the current level, which is already only 40% of their previous exports. The British Guardian has re­ ported that the sanctions against the regime were al­ ready having a huge impact on the population, leading to the quadrupling of food prices and dramatic short­ ages of medicine, including for hemophiliac children.

Clearly, the U.S. is not running from the Middle East with its tail between its legs. In short, Washington’s inability to establish a puppet Iraqi regime effective enough to make massive and permanent basing a re­ ality was a setback but has not in any way forced the U.S. to contemplate giving up its military and imperial hegemony in the region.

The reason is that the world capitalist economic cri­ sis is intensifying inter-imperialist rivalry and moving the U.S. capitalist class to undertake a significant ex­ pansion in terms of dollars spent and in terms of the geographic swath of the planet on which they hope to exert military hegemony. Mass responses to the eco­ nomic crisis by events like the Arab Spring and the Greek general strikes have alerted the big powers to the fact that their current method of economic rule, be it through despots or social democracy, is not guar­ anteed.

Thus, not only the United States but every major power is striving to increase its military arsenal. Those who were formerly dependent on the U.S mili­ tary to protect their interests now understand that either they develop their own military capacities or they will be shunted aside in the intensifying race for resources and profits. The U.S.-led NATO war against Libya served as a perfect example, when the U.S., Eng­ land, France, and Italy jockeyed for position regarding whose military forces would predominate in the de­ struction of that nation and which would secure the largest percentage of the oil booty.

The already severe sanctions and covert operations against Iran and Syria and the increasing threats to implement a “no-fly zone” in Syria (which could only More than 100 members, supporters, and friends of Socialist Action (U.S.) attended the Aug. 16-19 National Convention, Educational Conference, and public civil liberties rally in Minneapolis. Special guests included members and supporters of the Fourth International from Greece, Ireland, and Canada.

A broadly sponsored rally initiated by Socialist Action in defense of civil liberties and democratic rights included speakers from nearly a dozen organizations that have been victims of government persecution and are organizing broad defense efforts. (See photo above.)

Socialist Action’s convention was preceded by a three-month pre-convention discussion period begin to be implemented after the massive bombing of strategic air bases with adjacent civilian areas) have but one objective, to re-integrate these nations into the economic and military framework of the great powers and to stymie competition from trade blocs led by China as they relate to energy resources, pipelines, and markets.

The heroic democratic upsurge of the Syrian people to depose Assad has to overcome not only the nor­ mal obstacles faced by a people without a well-orga­ nized working-class or revolutionary party but also U.S. intervention with arms via the Saudi and Gulf Coast monarchies, CIA operatives on the ground, and U.S.-backed NGOs advising from neighboring coun­ tries—all designed to prevent the taking of power by genuinely democratic and anti-imperialist groupings based on the Local Coordinating Councils. And soon, perhaps, the Syrian masses will have to face a Libyastyle NATO intervention.

Simultaneously, Israel and the US are theatrically playing hard cop / soft cop regarding a military as­ sault on Iran’s nuclear facilities. Both countries are also creating the kind of propaganda that will allow them to justify an assault on Hezbollah in Lebanon as a military escalation occurs. Palestinian activists fear a scenario in which a regional conflagration will allow Israel to take over the entire West Bank once and for all.

The expansion of the U.S. military on the African continent, a continent already wracked by the most destructive interventions—proxy imperialist wars over mineral resources, dramatic land grabs that are destroying subsistence agriculture, and other tools of the new scramble for Africa—now includes a “war on terror” game plan whose operatives are sited in continuous swaths from Algeria to Mali to Nigeria to Uganda and Somalia beyond. Glen Ford recently point­ ed out that the U.S. has pushed for renewed sanctions on Eritrea, one of only four countries on the African continent that have refused to work directly with the U.S. military command, Africom. By 2013, the U.S. plans to have a new 3000-soldier-strong roving unit of rangers, housed in safe spaces in Africom friendly nations, available for dramatic strikes anywhere on the continent.

The so-called military “pivot to Asia” that is accom­ panying the efforts of the U.S. to challenge Asian cen­ tric trading blocs via the Trans Pacific Partnership and other measures is not mere propaganda. The new U.S. base on Jeju island is designed to hold Aegis war ships, 38 of which make up President Obama’s U.S. missile-defense system. Secretary of Defense Leon Barry Weisleder / Socialist Action that saw members from branches and at-large units across the country discuss and debate a range of key political issues. Some 170 written contributions were circulated through SA’s e-mail discussion bulletin. The convention adopted a comprehensive Political Resolution plus several addenda on the Cuban Revolution and the fight for women’s liberation and LGBT rights.

A panel of international guests and a representative of Socialist Action’s Political Committee presented their critical views on developments in the Fourth International, the world party with which SA maintains fraternal relations. A complete report will follow in the October issue of Socialist Action newspaper.

Panetta announced in June that by 2020 the greater part of American naval forces—including six aircraft carrier battle groups as well as a majority of the na­ vy’s cruisers, destroyers, Littoral Combat ships, and submarines—would be stationed in the Asian Pacific.

The Americas are not exempted. Washington is greatly expanding the so-called “drug war “ in the Americas, with U.S. troops recently killing fisherman in the part of Honduras that is home to the most radi­ cal elements of the ongoing fight for land and sover­ eignty.

In short, the global crisis guarantees that while the imperialists’ strategy and tactics may change—less counter-insurgency but more counter-terrorism, few­ er troops but more drones and special ops, a “Presi­ dential Kill List,” etc.—imperialist wars are not on the wane but on the upswing and will be a permanent fea­ ture of the political landscape. The efforts by the Unit­ ed National Antiwar Coalition and many other peace groups to use the Oct. 5, 6, and 7 weekend to educate new activists and regroup the veterans is a modest but important step toward deepening consciousness and sustaining an antiwar infrastructure. To find an organizing effort mounting activity for the 11th anni­ versary dates, visit http://october7actions.net/word­ press/. See the UNAC site at www.unacpeace.org. n ... Untaxed trillions (continued from page 10)

inheritance taxes, and other taxes would bring in even more.

The problem with seeking a tax solution to systemic inequality is clear. The super-rich con­ trol governments, armies and states—which are dedicated to preserving their power and wealth.

They have shown great capacity and a ruthless will to crush any serious challenge to their ac­ cumulated privileges.

Even the most radical tax reforms can be re­ versed—by electoral fraud, a capital strike, a military coup, etc. So, if fighters for social jus­ tice are in for a penny, we may as well be in for a pound. It’s the system that must be replaced.

Thus, if lasting social justice and genuine eco­ nomic democracy is your goal, it’s important to prepare to expropriate the bourgeoisie and build the institutions of workers’ power, from the bottom up. n

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Stephane De Sakutin / Agence France-Presse