It's not enough to say, in response to the Paradise Papers revelations, that we already knew that rich people parked their money in offshore tax havens, where their piles accumulate far from the scrutiny of our government. Nor is it enough to say that we were already aware that we live in a time of "inequality."
What we have learned this week is the clinical definition of the word. What we have learned is how much the rich and the virtuous have been hiding away and where they're hiding it. Yes, there are sinister-looking Russian capitalists involved. But there's also our favorite actors and singers. Our beloved alma mater, supposedly a charitable institution. Everyone with money seems to be in on it.
We're also learning that maybe we've had it backwards all along. Tax havens on some tropical island aren't some sideshow to western capitalism; they are a central reality. Those hidden billions are like an unseen planet whose gravity is pulling our politics and our economy always in a certain direction. And this week we finally began to understand what that uncharted planet looks like; we started to grasp its mass and its power.
Think about it like this. For decades Americans have been erupting in anger at what they can see happening to their beloved middle-class world. We think we know what the culprit is; we can see it vaguely through a darkened glass. It's "elitism". It's a "rigged system". It's people who think they're better than us. And for decades we have lashed out. At the immigrant next door. At Jews. At Muslims. At school teachers. At public workers who are still paid a decent wage. Our fury, unrelenting, grows and grows.
We revolt, but it turns out we have chosen the wrong political leader. We revolt again; this time, the leader is even worse.
This week we are coming face to face with a big part of the right answer: it's that the celebrities and business leaders we have raised up above ourselves would like to have nothing to do with us. Yes, they are grateful for the protection of our laws. Yes, they like having the police and the marine corps on hand to defend their property.
Yes, they eat our food and breathe our air and expect us to keep these pure and healthy; they demand that we get educated before we may come and work for them, and for that purpose they expect us to pay for a vast system of public schools. They also expect us to watch their movies, to buy their products, to use their software. They expect our (slowly declining) middle class to be their loyal customers.
But those celebrities and business types would prefer not to do what it takes to support all this. That burden's on us. Oh, they're happy to haul billions out of our economy and use us up in the workplace, but maintaining the machinery that keeps it all running – that's on us.
I don't want to go too far here. I know that what the billionaires and the celebrities have done is legal. They merely took advantage of the system. It's the system itself, and the way it was deliberately constructed to achieve these awful ends, that should be the target of our fury.
For decades Americans have lashed out against taxation because they were told that cutting taxes would give people an incentive to work harder and thus make the American economy flourish. Our populist leaders told us this – they're telling us this still, as they reform taxes in Washington – and they rolled back the income tax, they crusaded against the estate tax, and they worked to keep our government from taking action against offshore tax havens.
In reality, though, it was never about us and our economy at all. Today it is obvious that all of this had only one rationale: to raise up a class of supermen above us. It had nothing to do with jobs or growth. Or freedom either. The only person's freedom to be enhanced by these tax havens was the billionaire's freedom. It was all to make his life even better, not ours.
Think, for a moment, of how this country has been starved so the holders of these offshore accounts might enjoy their private jets in peace. Think of what we might have done with the sums we have lost to these tax strategies over the decades. All the crumbling infrastructure that politicians love to complain about: it should have – and could have - been fixed long ago.
Think of all the young people saddled with catastrophic student-loan debt: we should have – could have – made that unnecessary. Think of all the decayed small towns, and the dying rust belt cities, and the drug-addicted hopeless: all of them should have – could have – been helped.
But no. Instead America chose a different project. Our leaders raised up a tiny class of otherworldly individuals and built a paradise for them, made their lives supremely delicious. Today they hold unimaginable and unaccountable power.
We endure potholes and live in fear of collapsing highway bridges because our leaders wanted these very special people to have an even larger second yacht. Our kids sit in overcrowded classrooms in underfunded schools so that a handful of exalted individuals can relax on their own private beach.
Today it is these same golden figures with their offshore billions who host the fundraisers, hire the lobbyists, bankroll the think tanks and subsidize the artists and intellectuals.
This is their democracy today. We just happen to live in it.
- Thomas Frank is a Guardian columnist
Thanks for your comment mate.
Many will balk at it, but it is one of the main culprits :)
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It's about the law of the jungle. We have not been working hard enough to be and remain civilised, really caring about the other. Exposure is good, a first step to understanding, but now we have a huge fight on our hands.
ShareNo, it is most definitely not the law of the jungle.
It is an artificial en highly complex system constructed with the purpose of preventing any kind of challenge to the power of the already wealthy. Under the law of the jungle every top dog is challenged regularly and is defeated eventually.
ShareIt's got nothing to do with the "law of the jungle". This transfer of wealth into the hands of a few has been a deliberate move by the GOP, starting with Reagan. Remember the "New Deal"? Rosevelt taxed the hell out of the wealthy and corporate monopolies that caused the depression, set up a social safety net, and created a robust Infrastructure deal that put millions to work. Well, it's clear that the GOP have been doing (for years) everything they can to claw that back. This year, they started with trying to claw back healthcare from the little guy, gut Medicare and now they're doing their best to give the .1%ers and big corporations a multi billion dollar gift, by saying it will create jobs. Bullshit. Today these corporations are rolling in profits, but rather than increase wages, or build new infrastructure, or hire new employees, they're buying back stock, giving dividends to their wealthy owners, and paying their executives INSANE SALARIES.
The liberals didn't put these laws into effect, the conservatives did!!! And, they're at it again! It's been proven time and again that "Trickle Down Economics" DOES NOT WORK. What's now being proposed in Washington is another round of "Trickle Down Trumponomics" (it's not a trickle down to the middle-class, it's a fire hose up to the .1%ers.
If you truly believe this tax bill will increase jobs, I've got a bridge you might be interested in.
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Les républiques finissent par le luxe; les monarchies, par la pauvreté.
Republics end through luxury; monarchies through poverty.
- Charles de Montesquieu, De l'Esprit, VII, Chapter IVAnd if the rich keep it up, they'll get the revolution they will so "richly" deserve.
ShareReform would be so much less disruptive and violent. They don't want it though so open the gates and let the fire do its cleansing work. From the ashes only more anguish for what humanity have wasted.
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You didn't read the article, did you? It's about how the system is fucked up because it allows these things to be legal.
ShareWhich is exactly what the article states too.
But there is this thing called morality too."Our kids sit in overcrowded classrooms in underfunded schools so that a handful of exalted individuals can relax on their own private beach."
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More anti-capitalism - the wealthy, talented and successful should be motivated to continue to provide growth and employment in the cultural/entertainment sectors, much as corporations seek to harness their money for R&D investment and the creation of future employment rather than give it to the state.
These individuals and entities are simply not like (many of us) - to pretend otherwise is simply to embrace unquestioning socialism. The bond markets exist for successful and frugal states to borrow a little extra for their public sectors.ShareCapitalism does just fine with regulation. What you are applauding is the law of the jungle, might makes right. Most people do not want to live in a society ordered on that principle.
Sharetalented and successful should be motivated to continue to provide growth and employment in the cultural/entertainment sectors, much as corporations seek to harness their money for R&D investment and the creation of future employment rather than give it to the state
Well, yes, that would be at least some sort of argument. However, the article explained quite clearly that this isn't happening with the billions - trillions, actually - banked offshore and doing nothing for the economy.
ShareThe wealthy very often are neither talented nor successful, yet this system ensures they remain wealthy.
ShareCreative types do very well in Sweden which has highly progressive tax scales. That's because they get early investment and encouragement (i.e. at school) and this has built up a strong infrastructure which starts allowing success to beget success. The wealthy are still wealthy, and the talented and successful can be so irrespective of which social strata they come from. Better than only having talented and successful people coming from the wealthy?
Share"These individuals and entities are simply not like (many of us)"
Indeed, a high proportion of them will be sociopaths.
ShareTax avoidance is anti capitalist.
Capitalism is intrinsically facilitated by the state. Without state, there can be no market. Without a market, there can be no capitalism. Avoiding taxation is anti capitalist.
ShareHuh. Adam "Invisible Hand" Smith, father of laissez faire economics, would disagree. He recognized that a completely unfettered free market would destroy itself by its own greed and therefore argued for a significant role for government regulation and oversight and, dare I say it, progressive taxation:
"It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion."
I don't think Smith can be considered an anti capitalist.
ShareThis is exactly why the system was created in the first place and the underlying philosophy behind capitalism - the sole purpose of which is to increase the capital (wealth) of those who already had capital.
ShareAs a Marxist, I thank you for quoting Smith.
Somehow, many libertarians and right-wing who like to pontificate about capitalism and the free-market only like to remember the invisible hand bit and not the rear.
Selective memory perhaps ?
Touché :).
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Your logical reasoning capacity really isn't very well developed, is it? Maybe some tax pounds or dollars could have helped with your education. If your parents paid for it, on the other hand, they were robbed. All that glitters...These individuals and entities are simply not like (many of us) - to pretend otherwise is simply to embrace unquestioning socialism.
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All so, so obvious. For many years they have even stopped trying to hide it. But still the masses vote for them and the maintenance of the systems that keep them in power. In the past, there seemed to be some collateral benefit but no semblance of that remains.
The collapse of the West. It's happening right now; slowly, ever more pai
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