ALLIANCE FO§ DEMOCRACY

Politicians Run from Themselves

We remember well the off-shore accounts of France’s government ministers, 37 in all, with a million in each. There are also 40 German politicians who are supposed to be holding money abroad – according to the now 57-year-old Swiss accountant Rudolf Elmer, who worked from 2006 to 2008 for Julius Bär Bank on the Cayman Islands and for Standard Bank of South Africa on Mauritius. Unlike in France, where the disclosure of these accounts triggered a scandal, the German politicians ducked any penalties, and thanks to a lack of investigative journalism in Germany this chapter in German political history was never written. It is interesting that politicians from some euro countries continue to hold accounts that continue to earn interest and yields – and since tax authorities do nothing about these assets, no taxes, back payments or penalties are paid.
It’s odd that ordinary citizens who are found to have committed these kinds of crimes are required to pay up, but those who are federal employees, for example, or others who simply have the means, can keep their savings abroad without concern.
The question is: Why do people move their savings abroad? Could be that they do not consider the country they live in, or help govern, to have a very promising future with respect to the return on their savings, so they seek better yields elsewhere. This by itself is not scandalous, but it is when the returns from investments abroad are not disclosed and reported to the German tax authorities. When people see few opportunities to invest their money profitably in their own country, that is one thing, but when the law is not applied equally in cases of tax evasion, that is quite another. Ordinary citizens must receive the same treatment as the politicians. After all, they create the legal basis and tax laws for corporations and their subsidiaries operating in tax havens. Current regulations facilitate a kind of long-term tax break for corporations with subsidiaries in tax havens.
This is clearly a criticism of the unequal treatment received by ordinary taxpayers as opposed to the non-taxpaying corporations. The global civic organization AVAAZ has started a petition on this issue. Tax authorities in Western countries lose a trillion euros in tax income by favouring corporations – for Germany, this figure is €30 billion euros, about 10%, lost each year in the German budget, which could be spent on education, health, etc.
Politicians don’t seem to care about this enormous gap. German Finance Minister Wolfgang Schäuble did agree to a study in relation to the establishment of the future World Tax Authority (in Berlin), and this at a time when 37 states at the G20 Summit pledged to sign the corresponding treaty, but there was no majority resolution. This failure to act was a green light to those in high finance, because we all know where they send their money with a click of the mouse – wherever there are returns of any kind. This secures their assets while those of ordinary citizens are expropriated. Politicians flee from their responsibilities and either do nothing to stop these machinations or have a stake in them.
An initiative of the Left Party in the European Parliament to end these abuses failed. As long as their own savings are at stake, politicians will help the major financial institutions to achieve the best tax breaks they can abroad, while ordinary citizens will continue to pay high taxes.