Is it time to take on the super-rich?

Denerick

A major story has just emerged on guardian online - the size of the 'offshore' economy is roughly of the same magnitude as the GDP of the US and Japan combined. Since the global super rich effectively act and live like a parasite - extracting profits from developing countries and recycling those monies in offshore bank accounts and tax havens, contributing absolutely nothing to the social and cultural betterment of these nations - why do we allow them to get away with it? Sure, their capital is useful in driving economic growth to some extent, but why should they be permitted to pay no taxes whilst working people pay anything from 20 to 45% of their income to fund the welfare state? When do we, as a civilised planet, demand that these parasites pay their fair share? Why should they enjoy the benefits of a civilisation that they do nothing to support, whilst we struggle and pay the burden of our societies obligations?

Why do we seem so incapable of tackling this immoral practise, and why do we permit tax havens to allow it? Why are we not exercising greater political and economic clout in preventing tax 'avoidance'?

*When I say 'we', I largely mean the European Union and other like minded, civilised nations with decent welfare states.

Denerick

As a postscript to the above:

6.3 trillion of assets is owned by just 92,000 people.

In a world where people are increasingly conscious of the gap not just between the wealthy and the poor, but the wealthy and the middle, social unrest on a tectonic scale is inevitable. This I believe without any kind of reservation. This insane accumulation of capital in ever fewer hands bears historical parallels with the downfall of the Roman Empire and descent of mankind in hundreds of years of internecine warfare and darkness. If the super wealthy had even an inkling of self preservation, they would act now to curb inequality and prevent the social unrest that I believe will define our future.

RichardAnd

Denerick wrote: »

why do we allow them to get away with it?

They (they being the most wealthy people on the planet) get away with what they do because they have designed the modern financial markets to favour them. Super rich individuals, I'm talking about billionaires here, have massive political influence and I think it is incredibly naive to believe that they don't use it for their own gain.

Each year, a group of the most wealthy individuals meet in what is known as the bilderberg group. I don't buy into alot of the conspiracy theories attached to this organisation but what I do know is that nothing of what is discussed is ever published and the people at such a meeting are men (and occasionally women) of enormous influence. Money is power and these people have an incredible collection of wealth. Do you think that they won't use their influence to protect their position?

Gentlemen, democracy is an illusion given to the masses to allow them to believe that they control their own lives. I've no doubt that the local TDs are able to get boilers fixed, pot holes filled, speeding tickets torn up and other vacuous favours carried out but when it comes to the really big decisions, the paper work is signed and seals long before it reaches the Dail.

This is why I don't get myself involved in petty bickering between "the left" and "the right". Choose the puppet on the left or choose the puppet on the right, at the end of the day, there's one guy hold the strings of both.

Chuck Stone

Seems that the vile maxim is true.

All for ourselves, and nothing for other people, seems, in every age of the world, to have been the vile maxim of the masters of mankind.

Sounds like something Karl Marx would say, right?

Nope.

Adam Smith: The Wealth of Nations. Book III, Chapter IV, pg.448

Good loser

We could waste a lot of time and money and get little in return.

Witness the Mahon Tribunal.

The super rich have to manage their money or it can dissipate quickly - note Sean Quinn, Michael Jackson etc.

With the working capitalist system we operate one of the consequences is that there will be super rich somewhere e.g. the owners of Lidl and Aldi.
Many people in Ireland agitated to have these guys stores set up in their towns - effectively to make them richer.

Some of the most feted people around are super rich footballers, actors, pop singers, artists.

The tax authorities in US and Europe etc are continually chasing the rich and presumably whittling away at their caches.

Chasing the super-rich? Wouldn't bother my arse. Time enough for that when SF are agreeing a programme for government with the ULA.

woodoo

Something should certainly be done. And a good start would be laws that prohibit media being owned by the same small pool of people. Make sure it is well divided. When is the last time you have seen tony o'reilly in the papers. No mention of him ever as far as i can see. Never seen a campaign against tax avoidance by any of the papers. No moral pressure put on these people. But the Indo has been running a campaign against the public service for the last 2 years.

An ever smaller group are going to own an ever greater share of the wealth. Some day there will be a financial revolution french revolution style.

Denerick

woodoo wrote: »

Some day there will be a financial revolution french revolution style.

This is what terrifies me above all else. The French revolution witnessed the elemental fury of mankind at his most base. But then, so does all war. But the French Revolution was particularly ferocious and hysterical in its reliance on violence. And it ultimately led to a proto fascist dictator who basically conquered Europe.

I think libertarians and the super wealthy need to realise that social democracy, egalatarianism and wealth redistribution is as much in their interests as it is in the people's. What do they want? A new form of communism? Its the unremitting stupidity of it that agitates me so. No socially conscious group of people will abide ostentatious wealth in a period of mass hardship or stagnation.

RichardAnd

Denerick wrote: »

This is what terrifies me above all else. The French revolution witnessed the elemental fury of mankind at his most base. But then, so does all war. But the French Revolution was particularly ferocious and hysterical in its reliance on violence. And it ultimately led to a proto fascist dictator who basically conquered Europe.

Only for a few years. The adventures of the little man from Corsica shaped the Europe we live in today but let's not get into that . . .

The french revolution was a terrible period for the sheer violence unleashed but it stands as one of the best example of what happens when people are pushed too far. One of the greatest minds in history (Machiavelli) held stringently to the belief that to hold onto power and thus secure stability, a ruler must not bully his subjects and thus, become hated by them. Louis XVI and by extension, his government, totally failed to consider this and their repeated abuse of the French people led to most of them loosing their heads.

At the end of the day, power is a subtle thing. There is no way for a ruler to make thousands or even millions of people behave in a certain manner if they really don't wish to. A competent leader knows that all he can ever do is steer his people in the direction he wishes because the power that he thinks he has is entirely dependant on the masses' continued belief that he really has power at all. If it comes to the point that enough people just say "no more" and actively begin to rebel against the system then no amount of legislation, troika meetings and propaganda will stop what will follow.

KyussBishop

The core of it really is a de-facto two-tier system of law, where white collar crime is treated with leniency (when paid any attention at all), and everyone in the general population who can't afford the necessary political connections, feel the full force of law.

The laws are there in many cases (though not all cases, granted), but it's this selective two-tiered enforcement of the laws that enables so much criminality, and is so dangerous.
This can be caused by regulatory capture, political connections, simple bribes, media control etc., but in the end what it amounts to is a two-tiered system of law.


We're not going to approach anywhere near a violent revolution, as that's in nobodies interest, but I've no idea what we are going to see.

It's clear that most of the current political and economic systems around the world have serious dysfunctions, so going forward there needs to be a big rethinking of politics, economics and parts of society.
This is 'kind of' happening with economics, as mainstream economics has been shown to be largely flawed, so there is actually attention being paid to alternatives, but it is still largely mired in politics.

As for politics in general: There seems to be a large lack of new and coherently put together ideas of how to resolve the inherent problems in the current political systems (the ease with which they're captured by corporate or monetary interests being part of that), and there seems to be a lot of room for experimenting with untested and undeveloped political theories/policies.


With the Internet and the ease of publishing information, I think media control is going to have increasingly less influence over time and people in general will be able to become more easily informed on these topics (but this heavily depends on general interest in these topics).
Due to that, I think there will be a long-term progressive trend towards general political improvement (as it will cut out a lot of media propaganda), but there still seems to be a lack of 'big ideas' and development of new (and reignited development of old) political theories.

Chuck Stone

RichardAnd wrote: »

At the end of the day, power is a subtle thing. There is no way for a ruler to make thousands or even millions of people behave in a certain manner if they really don't wish to.

Very true. When you think about events that happened in Eastern Europe like the fall of the Berlin wall - nobody was really expecting it - it was a surge from below, there was no orchestration, just a groundswell of discontent that the elites had failed to predict or prevent.

One stark example of how the elite become detached from reality was the demise of Nicolae Ceausescu. N.C. went From all powerful dictator to execution in a barnyard in a matter of hours. The footage of his bewilderment when 'his people' turned on him makes for amazing viewing.

halkar

You need to look at the other side of the coin also. Most of those super rich provides jobs. People working in these jobs pays taxes too. Rich also pays a lot of taxes while maintaining their super rich life. Average Joe buys Toyota corrolla where super rich buys Bugatti. How many toyotos you have to sell to get the same tax on a bugatti? List can grow with properties, vat receipts etc etc. In short rich contributes to society too.

Jonny7

halkar wrote: »

You need to look at the other side of the coin also. Most of those super rich provides jobs. People working in these jobs pays taxes too. Rich also pays a lot of taxes while maintaining their super rich life. Average Joe buys Toyota corrolla where super rich buys Bugatti. How many toyotos you have to sell to get the same tax on a bugatti? List can grow with properties, vat receipts etc etc. In short rich contributes to society too.

I agree but many of these off-shore accounts are specifically designed to avoid tax, Jimmy Carr was apparently paying 1% tax on his 3 million. He does n't provide many jobs. Let's face it - a large portion of these holdings are from movie stars, sports stars, music bands, celebrities, inheritances, famous painters, sculptors, cooks, you name it.

That said, the process of unwinding and regulating off-shore accounts would be nightmare-ishly complex.

RichardAnd

halkar wrote: »

You need to look at the other side of the coin also. Most of those super rich provides jobs. People working in these jobs.

True, but only partially. Some of the super-rich own companies that employ thousands but many of the said individuals simply have vast assets though inheritance or other means. Consider Sean Quinn, he has essentially lost all his billions yet his company continues to operate and employ people. Likewise, Steve Jobs has passed away yet his company is still going strong. The individual and the company are not the same thing.

There has been a concentrated effort in the media and though other propaganda outlets to use the words "job creator" to describe wealthy individuals. This has taken firm root in the minds of many and it can be seen on this very board whenever the idea of more tax for those with more money comes up.

For the record, I don't believe in extortionate tax on anyone but I'm seriously starting to question the right of a single person to control vast amounts of wealth when so many others have so little. By all means, someone should be able to enjoy the fruits of hard work but why is reward always regarded as money by so many people? Surely, when someone is comfortable and secure in life, there comes a point when they don't need more?

Chuck Stone

halkar wrote: »

You need to look at the other side of the coin also. Most of those super rich provides jobs.

They do?

Based on U.S. tax return data, only 3% of the wealthiest 130,000 Americans are entrepreneurs. Most are in management or finance.

Source

Looks to me like most of the rich are hoovering up wealth as opposed to creating it.

Duggys Housemate

Chuck Stone wrote: »

RichardAnd wrote: »

At the end of the day, power is a subtle thing. There is no way for a ruler to make thousands or even millions of people behave in a certain manner if they really don't wish to.

Very true. When you think about events that happened in Eastern Europe like the fall of the Berlin wall - nobody was really expecting it - it was a surge from below, there was no orchestration, just a groundswell of discontent that the elites had failed to predict or prevent.

One stark example of how the elite become detached from reality was the demise of Nicolae Ceausescu. N.C. went From all powerful dictator to execution in a barnyard in a matter of hours. The footage of his bewilderment when 'his people' turned on him makes for amazing viewing.

A communist system has a centre of power, capitalism doesn't. 40 million people could march against the rich and they won't be any less rich. The State has to intervene.

Duggys Housemate

Chuck Stone wrote: »

halkar wrote: »

You need to look at the other side of the coin also. Most of those super rich provides jobs.

They do?

Based on U.S. tax return data, only 3% of the wealthiest 130,000 Americans are entrepreneurs. Most are in management or finance.

Source

Looks to me like most of the rich are hoovering up wealth as opposed to creating it.

Would Steve Jobs have been entrepreneurial or managerial?

EDIT: I agree with your main point though.

Chuck Stone

You're absolutely correct about power concentration - it's much easier to cut the head off a snake than round up rats.

Duggys Housemate wrote: »

Would Steve Jobs have been entrepreneurial or managerial?

EDIT: I agree with your main point though.

Entrepreneur in my books anyway. Wozniac was the innovator and SJ was the entrepreneur.

Thrill

On the BBC site today.

21 trillion dollars in tax havens :eek:

Tax havens: Super-rich 'hiding' at least $21tn

http://www.bbc.co.uk/news/business-18944097

Chucky the tree

Denerick wrote: »

Why do we seem so incapable of tackling this immoral practise, and why do we permit tax havens to allow it? Why are we not exercising greater political and economic clout in preventing tax 'avoidance'?

*When I say 'we', I largely mean the European Union and other like minded, civilised nations with decent welfare states.

It odds to see this topic started and also such support for this in an Irish forum considering how important we value our low corporation tax and are willing to fight tooth and nail to make sure it isn't increased. Also when we often complain about our supposed lack of sovereignty do we not expect or want EU to ban all EU wide tax havens?

Chuck Stone wrote: »

They do?


Looks to me like most of the rich are hoovering up wealth as opposed to creating it.

It's a bit naive to think people in management and finance don't create jobs. They create plenty of jobs.

troposphere

The graph on the Guardian website has Ireland as a tax haven

Duggys Housemate

troposphere wrote: »

The graph on the Guardian website has Ireland as a tax haven

Then the guardian is being an ass. One assumes that tax withheld by the rich is personal tax not corporate tax. Personal tax is 55% marginal.

Eggy Baby!

Is relocating money to tax havens generally illegal or is it just d*ckish practice?

RichardAnd

Eggy Baby! wrote: »

Is relocating money to tax havens generally illegal or is it just d*ckish practice?

I believe it's a case of cheating within the rules.

Eggy Baby!

RichardAnd wrote: »

I believe it's a case of cheating within the rules.

So finding loopholes then?

RichardAnd

Eggy Baby! wrote: »

So finding loopholes then?

That's my understanding of it. The competent crook gets away with the act because he's clever, a brilliant crook gets away because he never broke the law to begin with.

Scofflaw

Duggys Housemate wrote: »

The graph on the Guardian website has Ireland as a tax haven

Then the guardian is being an ass. One assumes that tax withheld by the rich is personal tax not corporate tax. Personal tax is 55% marginal.

Not on foreign-earned income income for the non-domiciled: http://www.independent.ie/business/european/ireland-a-possible-tax-haven-as-exiles-desert-uk-1342909.html (read all the way to the end). Must be some reason why we're regularly (and, importantly, still) around the no.12-13 spot in the top 20 millionaires per capita worldwide.

cordially,
Scofflaw

Channel Zero

KyussBishop wrote: »

The core of it really is a de-facto two-tier system of law, where white collar crime is treated with leniency (when paid any attention at all), and everyone in the general population who can't afford the necessary political connections, feel the full force of law.

Exactly. This two-tier system, as you said, it of course pervades not only local law, but also infests the world economic system. Rigged rules and Double Standards as Oxfam put it.

We're not going to approach anywhere near a violent revolution, as that's in nobodies interest, but I've no idea what we are going to see.

No idea either. Let's hope it's non-violent change.
It does seem when looking at the figures and reading about it, that there will come a breaking point eventually. Knowledge is power as they say.

The depressing fact that's worth bearing in mind though, is that so much of the world already lives in grinding poverty, under conditions of shocking inequality. Sprawling shanty towns and gated luxury mansions co-exist side by side in developing countries. And it's not improving by any acceptable rate imo.

We might well ask ourselves why hasn't social unrest on a tectonic scale not happened already in these countries?
The sad answer to that seems to be is that these people have been rendered virtually powerless by the current system that favours a small powerful elite to the detriment of the vast majority; the triumph over the last 30 years of transnational tax-avoiding capital over labour and basic human rights.

Duggys Housemate

Actually the developing world has, in fact, made great strides in the last 30 years.

Channel Zero

Duggys Housemate wrote: »

Actually the developing world has, in fact, made great strides in the last 30 years.

I'm not disagreeing with that, but it would be interesting if you could provide figures so we can have a look and link it to the system that's been in place over the last 30 years.

Duggys Housemate

Channel Zero wrote: »

Duggys Housemate wrote: »

Actually the developing world has, in fact, made great strides in the last 30 years.

I'm not disagreeing with that, but it would be interesting if you could provide figures so we can have a look and link it to the system that's been in place over the last 30 years.

http://www.youtube.com/watch?v=jbkSRLYSojo&feature=youtube_gdata_player

Channel Zero

Duggys Housemate wrote: »

http://www.youtube.com/watch?v=jbkSRLYSojo&feature=youtube_gdata_player

Nice vid. Saw it before actually, being a big fan of Hans Rosling. Unfortunately it doesn't link it to the system that's been in place over the last 30 years.

It's quite obvoius that mankind has improved its lot over the last 200 years as Rosling beautifully illuminated in his bubble graph thingy.

To be honest though, that reply stinks of libertarian apologetics. The last 200 years progress has absolutely nothing to do with what we're talking about, am sure you'll agree. It's giving credit where credit isn't due.

Am looking forward to you providing something a bit more substantial than a 4 minute vid as to why our current system has been such a benefit to the state of affairs.