To honor Queen Elizabeth, Charles must end cobweb tax abuse
The estates now subject to King Charles III include a web of tax havens and secrecy jurisdictions which, along with American, Asian and European havens, allow taxpayers to hide $32 trillion in tax. This cross-border tax evasion causes public treasuries around the world to lose $483 billion in tax revenue each year, including $312 billion from multinational corporations and $171 billion from ultra-wealthy individuals.
This devastating drain on public resources, if reversed into a new source of revenue, could significantly contribute to the $7 trillion needed each year to achieve the United Nations Sustainable Development Goals, which constitute “a universal call to end poverty, protect the planet and ensure shared peace and prosperity.
Commendable and outspoken on climate resilience as crown prince, Charles must now use his bullying pulpit to urge Parliament to close ‘the UK spider’s web’. With the financial district known worldwide as the “City of London” at its centre, the spider’s web collects and secretes funds that are vital to advancing the public good and protecting our planet.
The city and the spider’s web
As Britain’s global empire crumbled in the 20th century, personal affection for Queen Elizabeth slowed the process of decolonization, but financial greed accelerated a remarkable transformation of the City of London. Not to be confused with Greater London, whose population of 9 million is ruled by Mayor Sadiq Khan, the City of London is a semi-independent medieval state within the modern British state. With a population of 9,000, ruled by Lord Mayor Vincent Keaveny, it is commonly referred to as “the city” by financiers across the British Commonwealth.
For centuries, the City has worked “beyond the authority of Parliament, [undermining] all attempts to curb the excesses of finance. The City tapped into the vast financial network of the British Empire. But as the empire shrank, its people turned relations with former colonies into a shadow empire of financial misbehavior.
Investigative journalist Nick Shaxson reveals how the City has transformed into “Wall Street’s giant escape route from the checks and balances of US financial regulation”; provider of “endless loopholes for American financial companies”; operator of a spider’s web of satellite tax havens (“simply booking offices: semi-fictitious way stations on secret routes through accountants’ exercise books”); silver extractor instead of natural resources from former colonies; and allows the “elite to do things – often nasty – that would not be allowed at home”.
King Charles should know about the misdeeds of the City. Almost a decade ago, Queen Elizabeth was warned that “Britain, in partnership with Her Majesty’s Overseas Territories and Crown Dependencies, [is] by far the most important part of the global offshore system of tax havens and secrecy jurisdictions.
The City of London plays an outsized role in catalysing the engagement of businesses and individuals with tax haven countries that are named, humiliated and ranked in the Tax Justice Network’s annual Financial Privacy Index. Top of the list in 2022: the United States of America.
The Spider’s Web and the USA Tax Haven
Tax havens like Britain’s spider web ‘are engaged in economic warfare’ against the United States, late senator Carl Levin has reported following extensive investigations into tax avoidance industry abuses . Treasury Secretary Janet Yellen points out that corruption flows both ways: “The best place to hide and launder ill-gotten gains is actually the United States” because, as Bloomberg reports, “States United are the most complicit nation in helping individuals hide their wealth. .”
The hosts of this economic war are not only national governments. The cannibalistic subnational governments of states including Delaware, Nevada, South Dakota, and Wyoming help make Tax Haven USA the most pernicious secretive jurisdiction in the world.
Billionaire King Tax Obligation
Elizabeth is mourned by millions (including me, as my grandfather grew up on the grounds of Windsor Castle Great Park during his grandfather’s reign.) But the Queen has her detractors, as does her son . Tax critics ask whether England’s first billionaire king has to pay inheritance tax on the $950million Duchy of Lancaster, part of the family’s $28billion crown estate royal. (The answer is no.) They asked if he and his late mother had to pay personal income tax. In fact, they brokered a deal. They noted that Charles was charged with tax evasion and that the Panama Papers revealed Elizabeth’s personal use of the spider web.
The more important question, however, is global: will King Charles III meet the moment on climate and corruption?
As the Queen’s loyal subjects and her fickle fanboys go through performative public mourning rituals, her son is expected to honor his mother through action. He is expected to mobilize public opinion to urge the UK Parliament to investigate, expose and close the web of global tax avoidance controlled by corrupt financiers within the City of London, which was shamefully allowed to prosper during the long reign of Charles’ mother.
My goal in this new column is to elevate public discourse on the public interest implications of international, U.S. federal, and U.S. state and local tax policy across types of taxes. I will explore corporate and personal income tax, commodity tax, property tax, etc. The three main areas of focus for this column will be: tax justice (crucial topics in tax theory such as gender, race, and wealth); social harms (subjects of taxation of externalities such as climate, public safety and public health); and tax evasion (avoidants, hosts, enablers, their schemes and, close to my heart, the “beneficial ownership transparency” solution). I hope you will join me on this bi-weekly journey to (re)think taxation.
This is a regular column of public interest tax policy analyst Don Griswold, who is also a senior researcher at the Digital Economist. Look for Griswold’s column on Bloomberg Tax and follow him on LinkedIn.