Editorial comment from the forthcoming edition of ‘The Socialist’
Early April saw the biggest data spill to date with more than 11 million documents leaked from the Panamanian law firm Mossack Fonseca.
Dubbed the “Panama Papers” the leak, revealed by the International Consortium of Investigative Journalists (ICIJ), exposed some of the ways the world’s top 1% launder their money and avoid paying tax.
At least 140 politicians and senior public officials from around the world were implicated including the king of Saudi Arabia, the prime ministers of Pakistan and Iceland and the president of Ukraine. The papers also showed that Mossack Fonseca made arrangements for at least 77 Australian clients to use offshore tax havens.
In reality the Panama Papers have merely exposed the tip of the iceberg. Some economists estimate that $15-$30 trillion is hidden in these havens. At the same time Oxfam estimates that it would cost a mere $60 billion a year to end world poverty.
This horded wealth deprives governments of hundreds of billions of dollars in tax revenue – wealth that could be used to fund much needed public services like health, education, housing and transport.
In the midst of an economic slowdown, big business backed governments are forcing ordinary people to endure cuts and austerity measures instead of cracking down on this thievery. Working people should not accept a single cut or austerity measure while this swindle continues.
Australia is far from the land of “the fair go”. The only ones given a leg up are the big corporations with the Australian Tax Office reporting that more than a third of these companies paid no tax in the last financial year.
It’s not just a matter of big business exploiting loop holes in the system. It’s also the case that both major parties have supported significantly reducing corporate tax rates in recent decades. They have represented their big business backers very well.
They told us that by allowing wealth to accumulate at the top it would then “trickle down” to the rest of us. The exact opposite has occurred. We have a situation where the richest 1% are as wealthy as the poorest 60% of Australians, and this is only getting worse.
The major parties support the maintenance of capitalism, a system that works exclusively for the top 1%. Capitalism allows capital to move freely around the world while those that work for a living lack the same mobility. The rich exploit this to evade labour laws as well as tax laws.
The Panama Papers have merely shone a light on what many ordinary people already knew, but the question now is how can the tax cheats be stopped?
Socialists call for immediate steps to close tax loopholes and for higher taxation on the wealthy and big business. But as long as the system itself is owned and controlled by the 1% they will always try to find ways to avoid parting with wealth that they have accumulated at our expense.
The solution is to fight to change the way society is run. Wealth can only be hidden in tax havens because it is held privately, instead of being publicly owned and democratically controlled.
We must wrestle control of society’s wealth off the super rich and use it to transform the lives of the entire world’s population. On the basis of a publicly owned and democratically planned economy we could start to produce things based on people’s needs. A break with the status quo is what’s required.
None of the mainstream parties stand for such a break. That is why we need to build a political alternative to the capitalist parties, and a movement of ordinary people that really fights for the interests of the 99%.
This scandal highlights the international nature of capitalist collusion. Because capitalism is international, the fight back must also be international in scope.
The first casualty of the Panama Papers was the prime minister of Iceland. After a mass protest he was forced to resign in disgrace. Such actions give us a glimpse of the potential power that ordinary people have when they mobilise to affect change.
The challenge is to ensure that we don’t just replace the personnel, but the whole rotten system.
For more reading on the Panama Papers click here.