The Effect of Tax Loopholes & Criminal Business on Economies
All these issues contributed to the economic meltdown, and underneath all the blame is the darker World of crime and criminal business, which dents the economy of any country, and in some countries the crime is the driving force behind a country's economy.
Although this article is not concise, I will point out many ways that wealth/money/cash/liquidity is hidden, abused and exported, and which rarely Government seems to put on top of their agenda. The article will also be focusing on the problem in Britain- but the problem exists to varying degrees from country to country.
1.) It is impossible to calculate the many billions of pounds that have been illegally exported out of Britain and banked in foreign nations, or which have been absorbed into the World economy via criminal or illegal business.
Tax loopholes and tax havens have allowed big business, corporations and individuals, to bank or hide money in overseas nations for many decades without scrutiny. Royals, businesspeople, criminals and anyone highly connected have been able to exploit Britain's tax loopholes without facing imprisonment, fines or prosecution. A lot of the time the tax system has allowed huge money to be made by a corporation in Britain, and not pay a penny in tax- such as Starbucks, who pay corporate taxes in Europe and so claim they do not have to pay to operate in Britain,hence paying no tax in Britain.
But one little coffee shop chain is just the smell you have to wake up to.
2.) Criminal business transactions such as the criminal import trade of drugs, weapons and other illegal goods have also lost Britain billions of pounds each year. Four of the worst drugs: speed/crystal meth, ecstacy, cocaine and heroine are all manufactured and grown in foreign nations. Speed/crystal meth and Ecstacy is dominantly from Europe, particularly Holland. Cocaine is dominantly from South America, and heroine is dominantly from Asia/Middle East.
British gangs buy these drugs wholesale from gangs in foreign nations- and billions of pounds sterling is transferred to drug gangs in foreign nations each year.
The money lost to foreign nations over the last 20 years of drugs sales/transactions does not come back to Britain- and drugs gangs in foreign nations have been making more money than ever before over the last 10 years because of the sheer demand and popularity of these 4 hard drugs. Other illegally or legally imported small goods also costs the nation billions, and has led to a large drop in British manufactured small goods and industrial/factory production as a whole.
3.) Britain's GDP growth is not large enough to maintain adequate increase of liquidity. The hundred billion pounds sterling lost through tax loopholes,tax havens and criminal gangs each year cannot be magically printed, becausee that leads to hyper-inflation. Nor will taxing the average-wage earners generate more money for Government, who are in so much debt that it is impossible for the economy to generate the money needed to pay the Government debt.
Much like America and other nations in deep Government and civilian debt, we continue to expect the money supply to quadruple, for wages to increase dramatically and for the debt to go down. In reality a nation that is in debt more than the earnings of their yearly GDP are in the same boat, borrow more money to keep the system afloat, but end up slipping further down in the economic slump, dragged down harder by criminal enterprise and corporate tax avoiders. How can a virtually bankrupt Government expect to pay off debts and generate a substantial GDP when the country loses over 100 Billion dollars per year in criminal or illegal tax avoidance/tax loopholes?
Likewise, bailing out banks with taxpayers money is merely shuffling money from place to place, and does not generate more money, because there is only 'x' amount of known liquidity (cash) in a country, and bailing out banks and financial institutions only puts the cash into the hands of the people who lent out too much cash, allowed laundering and tax avoidance loopholes in the first place.
4.) Is there a tipping point that Government have not declared if liquidity (cash) continues to be lost through tax loopholes, taxhavens and to overseas drugs gangs and criminal businesses?
(eg:) the United Kingdom only has 'x' amount of cash, but requires 'y' amount to keep the Government budget fulfilled and to fulfil Government debt repayments, but over the next 10 years illegal transfers of cash to criminal gangs, corporate loopholes and tax havens reduces cash supply from the British economy and causes a sudden collapse in banks/finance companies yet again?
When you look at how the money was lent out, hidden in tax havens and debt hidden in offshore accounts, you learn just what caused the economic meltdown, and you can also guesstimate that those who took advantage of the tax system have since realized that their activities are now being monitored more closely, and as a result have merely changed their money-hiding method to hide their tracks even better.
Perhaps we are already at the stage of slow, gradual removal of wealth via the tax loopholes, criminal businesses and corporations who pay virtually nothing in tax but who make the most money. Usually the biggest corporations and biggest money earners do not face prosecution, or are merely handed a small fine that wouldn't even equal to 1 percent of one year corporate tax. A small-time employee is designated to be the one to take the blame, also known as 'taking the fall', and the bigger sharks swim off to hide until the storm is over...and they return to devour what's left of the little fish floating in the financial sea.
5.) The United Kingdom is not generating enough money to reduce Government debt, and is not generating enough money to keep liquidity flowing adequately through U.K banks, and there is no apparant way to claw back money that has been transferred to foreign nations through tax loopholes, the drugs trade/other criminal activites.
An obvious way to generate money for the British economy is
producing and manufacturing goods in Britain, and exporting more goods to other nations. Cutting imports means less money going out of the country. It makes some sense...
Don't Understimate The Power of The Dark Side...
But the criminal enterprises of today's World should never be underestimated. Corporate tax loopholes are a major crime syndicate, as are drugs, human trafficking and weapons. Major banks themselves have been found to be laundering drug money for cartels in South America, and the power of a cartel is far reaching, well connected and dangerous. Nobody can really stop the 'underworld' - and little can be done about the corporations and individuals who blatantly carry out their business in broad daylight, rob the nation in broad daylight, don't pay taxes and don't go to jail.
Do we really monitor and track the Worldwide buying and selling of all stock and shares, gold and silver and other business deals? Nobody could honestly put a number on how much wealth is being transferred around the World, who ends up with the wealth and if it was legal or not. For decades the business World was able to do everything on paper, and destroy the bits of paper quite easily. Now with electronic backups of transactions it is more difficult to fiddle books and not pay tax, but the problem still exists, regardless of how serious politicians claim to be on the issue- politicians have their hands tied by the financial World...and are puppetted according to the needs of the business World.
Collectively though, the money lost each year through the hidden
criminal networks and corporate/mainstream networks has an impact on any economy. Britain is at a crossroads, much like America, and it seems that we're only a couple more hurricanes away from being blown off the map- as sour as it sounds...
Can our nations truly cope with disaster and a flailing economy? While New York pieces itself together after yet another multi-billion dollar catastrophe, the economy is in no position to fix New York overnight, and the profiteers of corporations and the criminal underworld both don't really give a damn, only seek to make themsleves rich and powerful, and who haven't given a dime to the twenty thousand people whose homes were destroyed by Hurricane Sandy, nor care about the damage, the 50 Billion dollar clean-up bill and the hundreds of businesses destroyed.
But that's not a situation unique to America.
The problem is real and growing. Money is being stolen daily by the grabbing hands- they grab all they can. All for themselves.
After all, it's a competitive World...
Russell S.Wyllie 22/11/2012
http://Youtube.com/GlobalPrison - visit the Industry and Economics sections for videos on tax havens.
THE NEW STREAMLINED RSN LOGIN PROCESS: Register once, then login and you are ready to comment. All you need is a Username and a Password of your choosing and you are free to comment whenever you like! Welcome to the Reader Supported News community.
ARTICLE VIEWS: 2362
MOST RECENT ARTICLES
As a result of the elections 2013, the government led by a nationalist leader Chief Minister Balochistan Dr Abdul Malik Baloch has been established. Being progressive and moderate man, he ensured
Thursday, 06 March 2014
Every one knows that besides facing multi-faceted problems like acute financial crisis, unemployment, so¬c¬ial inequities, lack of security, lack of sound educational base, least technological
Wednesday, 05 March 2014
I’ve been thinking about this a lot lately. We spend so much of our lives immersed in our professions that in many ways our work has become our life. We may not like that fact; we may do what we
Tuesday, 04 March 2014
The only ordeal more daunting than delivering bad news today is the reluctant concession that good news exists. You'd think online readers, awash in doom and gloom, would break away now and again to
Tuesday, 04 March 2014
Wouldn’t it be just lovely to go nearly a quarter century without a raise?Astonishingly, that’s what restaurant servers--whose wage floor is set by the federal government--face.Despite opposition
Tuesday, 04 March 2014
By Bernard Weiner, The Crisis Papers (crisispapers.org) Governments cite "national security" concerns and "official secrets" as their justification for withholding information from the public.
Sunday, 02 March 2014
After the continued aerial strikes by the Pakistani jets and helicopters which have bombed militants’ hideouts including bomb-making factories in some tribal and surrounding areas of North
Sunday, 02 March 2014