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The 1% hide their money offshore, then use it to corrupt our democracy
- jgrahamc 11y agoNewspapers so often bandy about the million unit that readers can get inured to its true significance. But if at the stroke of midnight on New Year’s Day you were lucky enough to get one pound coin every single second, it would still take 114 days to amass £10m. You would even now be waiting till Sunday week to collect the whole amount. I have a very hard time imagining that. Surely it would be better to describe what having £10m would allow you to do.
- zeeZ 11y agoYou and a 130 other people could eat a £1 cheeseburger three times a day for the rest of your lives.
- saiya-jin 11y ago3 cheeseburgers a day would make the rest of their lives a rather short period for those unfortunate 130 ones
- zeeZ 11y agoI guesstimated using the 66 years WolframAlpha spat out, while Google (sourcing World Bank) has 81.5 years (2012) with a more or less steady increase. Let's just say WA was smart enough to factor all that in. Edit: Google data is for UK, because currency used in parent.
- JoeAltmaier 11y agoActually, forever, because interest?
- eterm 11y ago£10m is 715 years working 40 hours a week at the minimum wage. Before tax.
- suvelx 11y agoThe best explanation for the super rich I've had is something along the lines of: (Hoping my numbers are right) If you make $30,000 a year, an xbox costs 1% of your income, and a loaf of bread costs 0.001% of your income. For the super rich, with a yearly income of $3,000,000. Teslas's Model 3 would cost ~ 1% of their income, and an xbox 0.01%. Add/Remove examples and values, or switch to 'savings', to suit your target wealth perspective.
- mikeash 11y agoI think this understates it, because necessities take up less of your income, proportionally, as you go up. That person making $30,000/year probably has to save for months or go into debt to buy an Xbox, while the rich person can probably pay for the car up front and hardly even notice it.
- l34ch 11y agoOf course they do...what are we supposed to do about it?
- infogulch 11y agoI know that "1%" has a nice ring to it, but articles like this that mention "billionaires," "David Cameron," and the "Koch Brothers" aren't talking about 1-in-100, they're talking about 1-in-100,000 or more. The 1% are your small town local doctor and lawyer, and they're not tax dodging on their (nonexistent) huge hordes of cash by moving them out of the country.
- peteretep 11y agoCameron is quite definitely a 1%er, rather than a 0.1%er.
- kspaans 11y agoHe even pays the same rate of tax as me! :D
- bitchypat 11y agoI think he means that technically the cutoff for the worldwide 1% of income is something like $35K/year.
- jimmytidey 11y agoAmbiguous in cash terms, certainly he's very rich and has millions of pounds. I'd assume he could live comfortably without ever having to work. More importantly, he is married to the daughter of a Baronet, and is the cousin of a Baronet too, so, socially, very firmly a 0.1%er.
- dogma1138 11y agoYou don't need that many millions to live comfortably for the rest of your life. 1M is 10 years of 100,000 worth of net income which is more than you would get if you just reach the 1% mark in the UK. 10M say a modest lottery payout would give you a 100 years worth of 100,000 net yearly income and that's before you count in any potential ROI on that money if you decide to invest it rather than just stash it under the mattress. One of the other issues with money is that most of the people even those who are just in the 1% have to work to live, if you have access to sufficient finance to not worry about needing a job for the rest of your life one could argue that it's a problem. Even if you take out 100% of the money out of politics it's not going to be enough, because those who do not need to work to survive can invest 100% of their time into politics and driving their agenda forward while the rest lags behind. Now I'm not arguing that there is a solution for it, but what people tend to focus too much is on flat sums and income inequality which is almost futile. You might dislike some one who's making 160K a year but in most cases they are just like you if they do not work they'll find them selves on the street just as fast (and sometimes even faster than you). So for the most part I discount those who work directly for their compensation from the so called "1%" while you might think that some CEO getting payed 700,000 is some wallstreet arsehole, the oil worker in Nebraska might think the same about a developer in NYC earning 300K a year. True wealth allows people to focus on building dynasties and true power and if you want to focus on anything you might focus on that, that said we are 65 there's a good chance that we'll be considerably less supportive of things like inheritance tax when I'll have children and grandchildren to worry about.
- whatok 11y agoReally disappointed with the recent flood of clickbait Guardian articles submitted.
- whitegrape 11y agoIt's The Guardian, what do you expect? Lots of HN users like reading trash it seems.
- prawn 11y agoYou don't find these articles to be interesting discussion starters amongst your HN peers? These are generally amongst the big problems facing developed countries. I like that potential problem-solvers are reminded of the opportunities out there, and we get the chance to read the full gamut of opinions surrounding them.
- apsec112 11y agoHmmmm, strange how these supposedly all-powerful billionaires who own all the politicians through their nefarious offshore tentacles can't manage to get a bridge built: http://www.mercurynews.com/ci_18423887 http://www.mercurynews.com/ci_18423887 http://www.mv-voice.com/news/2013/12/12/council-deadlocks-on-google-bridge-idea http://www.mv-voice.com/news/2013/12/12/council-deadlocks-on... (note that the second article is two and a half years after the first - two and a half years of fighting for a simple two-lane bridge)
- Terr_ 11y agoWell, it is easier to destroy than create...
- Loughla 11y agoHere's a non-snarky question. What can we do about this? I've seen coverage about all of this, and the question I'm hearing across everyone I know is - what can we do? Any thoughts?
- theklub 11y agoExpose them, vote, protest. Pick one.
- tim333 11y agoVote Corbyn/Sanders?
- merpnderp 11y agoIt's a real problem, but not as bad as people think. The current US presidential election has seen several massively financed candidates get nearly nothing for their money. Trump and Cruz spent relatively nothing in the early parts of the election compared to Jeb Bush who spent 10's of millions. Hillary dwarfs Bernie's fundraising, yet is remaining highly competitive. About as competitive as one would believe if they had the same finances. People don't like to admit it, but representatives are usually pretty popular locally even if highly detested elsewhere. The US Congress's ~10% approval rating is only possible because local representatives maintain ~>50% approval ratings. I believe the real problem is that people don't actually know what their representatives are doing. If people understood the level to which health care insurance companies were allowed to influence the ACA, I doubt a single supporter would survive reelection. Health insurance companies writing health care reform bills is pretty much the definition of evil in the US.
- chumich1 11y agoIt has a more significant effect on the smaller elections. When people are distracted by the presidential contests they forget that Joe Shmo stands no chance against the guy with all the rich friends. He can't buy local ads or get his name on all the billboards.
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- windexh8er 11y agoWhile I've been meaning to read Noam Chomsky's: "Understanding Power" I ran across the documentary: "Requiem for the American Dream" over the weekend and this is clearly showcased within the first 5 minutes as he begins to describe "The 10 Principles of Concentration of Wealth & Power" and starts out with this infographic: http://imgur.com/QVcagot http://imgur.com/QVcagot. Quoting Chomsky from this portion of the film: "Concentration of wealth yields concentration of power. Particularly so as the cost of elections skyrockets which forces the parties into the pockets of major corporations. And this political power directly translates into legislation that increases the concentration of wealth. So fiscal policy like tax policy, deregulation, rules of corporate governance, and a whole variety of measures - political measures designed to increase the concentration of wealth and power, which in turn yields more political power to do the same thing." The documentary has spurred me to start reading the book, but falls in line with what's coming to light in the mainstream media today unfortunately. Edit: Honest question - why the downvote? Directly falls in line with the original post.
- golergka 11y agoRegardless of political meaning, it's not the infographic, it's a sad excuse for a caricature. _Info_graphics are supposed to have much more actual information that that.
- kjdal2001 11y agoI agree. Thats a political cartoon, not an infographic.
- windexh8er 11y agoSorry for the mixup of terminology. While I will agree it's not an infographic it's a representation of the ideas being explained in the context of that portion of the film. It's not a "cartoon" by any means and it does represent, at a very high level, the distinct notion of the original content of the thread. Money yields power and power yields legislation that yields money. My point is that I found it interesting Chomsky has succinctly been defining these problems for quite some time.
- barney54 11y agoI didn't see anything in this article where the author explain how offshore money corrupted democracy. He also throws out the Koch Brothers as some kind of left-wing talisman, even though I haven't seen them implicated in the Panama Papers. It is certainly possible that offshore money could be corrupting democracy, but I don't see any evidence in this article.
- lucozade 11y agoWhen I was at school, we used to play a game in English whereby we each had an obscure word that we had to get into compositions as often as possible without the teacher spotting it. The record, if I recall correctly, was something like 6 mentions of chiaroscuro. I sometimes feel that Guardian political journalists aren't paid by the word but using some form of buzzword bingo similar to the game we played. So the more times they get terms like 1%, neo-liberal, progressive etc the more they make. Polly Toynbee is definitely the master at that but Chakrabortty is pretty good too.
- soared 11y agoKeyword stuffing?
- merpnderp 11y agoWhen I see the Koch brothers mentioned, but not George Soros, who's donated far more money and influenced far more country's politics, it always strikes me as highly partisan. When it comes to influencers of US politics, the Koch brothers are relative pikers.
- partiallypro 11y agoThe Kochs donate far more to charity than they do political causes too. Really, if it weren't for FreedomWorks, they would not have much dirt on them. FreedomWorks is just terrible. Otherwise, they donate to Cato, Reason, etc.
- knowaveragejoe 11y agoDo you have a source for this assertion? So far as I have seen, Soros has donated more money personally than the Kochs have - but the Kochs have an extensive network of "grassroots" political organizations which in aggregate have funneled far money to politicians than Soros has done personally(on the order of hundreds of millions). I suppose at some level they are all using tricks and loopholes.
- pakled_engineer 11y agoClinton's FOIA emails are full of Soros literally giving orders to her and other reps. Use Wikileaks archive to read them/search for Soros. He's also bought electronic voting corps and managed to get them into primaries like Utah. There were all kinds of shenanigans with them recently like denial of service to some voters.
- knowaveragejoe 11y agoSources would be good for this. I'd like to see him literally giving orders via email.
- merpnderp 11y agoThis is a highly partisan site, but they do source most of their links. And keep in mind this is just a list of US political organizations he funds. I'm not sure not what you mean by the Koch's extensive network. They're either giving their money, or it is other people's money. They can't be held responsible for how other people donate their money. I don't hold Soros responsible for all the ACLU's actions, even if he is a major backer. When they ACLU stands up for something I believe in, I donate, but I'm certainly [not responsible] for all their actions, especially in years I don't donate. http://www.discoverthenetworks.org/viewSubCategory.asp?id=1237 http://www.discoverthenetworks.org/viewSubCategory.asp?id=12...
- alva 11y agoEven more tax hypocrisy being spouted by the Guardian. http://order-order.com/2012/11/26/the-guardians-offshore-secrets-guardian-media-group-still-operates-caymans-company/ http://order-order.com/2012/11/26/the-guardians-offshore-sec... http://www.forbes.com/sites/timworstall/2013/06/28/the-insufferable-hypocrisy-of-the-guardian-on-corporation-tax/#4ec0bd22b232 http://www.forbes.com/sites/timworstall/2013/06/28/the-insuf... http://www.independent.co.uk/news/business/news/guardian-media-firm-makes-186m-but-pays-only-200000-tax-8675818.html http://www.independent.co.uk/news/business/news/guardian-med...
- x5n1 11y agoAd-hominem. Does not make their articles any less relevant or wrong. Specifically: https://en.wikipedia.org/wiki/Tu_quoque https://en.wikipedia.org/wiki/Tu_quoque
- alva 11y agoad hominem "directed against a person rather than the position" The Guardian position is that avoiding tax using offshore companies is morally wrong. The Guardian avoids tax using offshore companies hypocrisy "the practice of claiming to have higher standards or more noble beliefs than is the case." edit: You are right that it does not make their articles any less relevant and I did not claim that it did.
- x5n1 11y agohttps://en.wikipedia.org/wiki/Tu_quoque https://en.wikipedia.org/wiki/Tu_quoque
- devishard 11y agoOne of the most valuable realizations I had in my mid-20s was that just because someone is a hypocrite doesn't mean they're wrong.
- alva 11y agoAbsolutely agree. I am not saying they are either wrong, or wrong because of this hypocrisy, in fact I agree with them regarding this issue. I do think it is important that those who read the Guardians moralising stance on tax are fully aware of it.
- x5n1 11y agoWhy is income from money, you know that which is earned because you have lots of capital, taxed at a much lower rate than incoming from labor? The < 1% are hiding their money in plain sight and not paying the same level of taxes as people who trade their labor for money.
- ska 11y agoPartially from economic theories about the use of capital in a market economy. Partially because the socio-economic class of people who benefit from such tax laws overlaps heavily with the socio-economic class of people who create tax laws.
- rlucas 11y agoPlease don't forget the economic theorizers, and the subtle and not-so-subtle pressures that keep them in line. (Put another way: in "[1] economic theories about the use of [2] capital in a [3] market economy" there's a whole lot of assumptions and underpinnings, at least three of them, that are not laws of physics, but rather are ways of perpetuating and recapitulating our present system.)
- ska 11y agoI fail to see how my statement did not include what you are saying, or how it suggested anything else.
- rlucas 11y agoWanted to give the same critical emphasis to the economic theory explanation as you had given to the socioeconomic class interest bit. The statement articulated two "parts" of the explanation. The second "part" was phrased as a matter of class self-interest, with a critical tone. But the phrasing of the first, as being "from" economic theories, can very easily be read as giving those theories a pass, esp. in environments like HN. If we wanted to explain with some finality, we might answer, "why do we mandate lead shielding around radioisotopes" by saying the reason is "from physical and biochemical theories [about harm from ionizing your DNA]." Or we might answer, "why are some traits observed to be epigenetic / both heritable and environmental" by saying the reason is "from biological theories." The appeal to science-y authority is pretty conversation-ending in technically-oriented conversation venues like HN, I find. Or more properly, it might not end conversations but it makes that piece a leaf node. I just like to remind people that economic theories are far, far more than their hard-science counterparts, political products.
- sickbeard 11y agoMeh can we keep this hyperbole shit off HN?
- cpncrunch 11y agoI'm disappointed both in the Guardian and HN users for posting this crap. The article doesn't even have any evidence that Cameron evaded tax (which is the implication). Cameron says he paid tax on the capital gains, so why the doubt? I know Cameron is a huge ass, but that doesn't mean he's guilty of tax fraud. In the UK you can't legally avoid tax by investing in an offshore fund. If you are UK resident you must pay capital gains tax when you sell the asset.
- moosey 11y agoI, for one, would much rather read the comments about this here than on reddit or other aggregators. Even then, I'll admit that it's off topic, and that doing so too often could alter the makeup of the community.
- pigpaws 11y ago"1%" is a joke. if you apply that to the entire world, and not just selectively to western countries (as is the habit): According to the Global Rich List, a website that brings awareness to worldwide income disparities, an income of $32,400 USD a year will allow you to make the 1% cut. Using current exchange rates, that amounts to roughly: 29,185 euros 2.2 million Indian rupees, or 211,126 Chinese yuan http://www.investopedia.com/articles/personal-finance/050615/are-you-top-one-percent-world.asp http://www.investopedia.com/articles/personal-finance/050615...
- MichaelBurge 11y agoMaybe the phrase "1%" is a tool used by 1%'ers like Aditya Chakrabortty(the author of the article) to manipulate the innocent masses against other 1%'ers like David Cameron. Those rich people and their political infighting. I have no doubt that Aditya - being a member of the 1% - is at this very moment twirling his mustache and plotting to enslave some poor African children. As soon as anyone crosses the income threshold of $32,400, they immediately start foaming at the mouth with an urge to bite the common man.
- golergka 11y ago> As soon as anyone crosses the income threshold of $32,400, they immediately start foaming at the mouth with an urge to bite the common man. Replace $32,400 back with 1%, and you get a statement that audience of this article seems to sincerely believe in.
- pigpaws 11y agothat's because it relieves them of any feeling of responsibility for contributing to said global disparity.
- pigpaws 11y ago...or maybe the term is used by folks trying to look more humble than they are. When people use the term 1%, they don't think they're IN it - they compare things nationally or globally depending on when it suits their argument. If you're bringing Africa into the argument, then by the nature of your (global) argument, you are in the 1% if you make more than $32,400 USD (or equivalent). Some people just don't want to accept that FACT. 1% of my pocket change is different than 1% of my bank account. funny how no one wants a pay-CUT...
- pdkl95 11y agoWe're still linking to The Guardian? The government stenographers that are protecting the intelligence community by sitting on their part of the Snowden archive? https://www.youtube.com/watch?v=KJValv4YQcY https://www.youtube.com/watch?v=KJValv4YQcY (warning: video contains strong language. Jacob Appelbaum isn't pulling his punches at The Guardian)
- golergka 11y ago1) Avoiding tax is in legal bounds is completely moral and is practised by everyone who is able to do that. I know a _lot_ of programmers in US who establish private consulting companies to write off all their private expenses and get 15% effective tax rate. If you think avoiding tax is immoral, you should hate them just as much as you hate billionaires. 2) Most of the people believe in political causes that are likely to directly benefit them. College students and young professionals are upset about college loans, old people are concerned with pensions, etc. 3) It's completely legal and moral to put effort and money to support political causes you believe in. So, everything the article describes is completely normal and moral for an ordinary man — but it seems that when billionaires exhibit the same behaviour, scaled with their personal wealth and it's influence, everyone thinks it's awful, immoral and illegal. How so?
- Eridrus 11y ago> 1) Avoiding tax is in legal bounds is completely moral and is practised by everyone who is able to do that. I know a _lot_ of programmers in US who establish private consulting companies to write off all their private expenses and get 15% effective tax rate. If you think avoiding tax is immoral, you should hate them just as much as you hate billionaires. Morality is not binary, and it is quite reasonable to think that while programmers evading taxes is bad, billionaires doing so is worse.
- golergka 11y agoWhy worse if it's the same %?
- rlucas 11y agoWhen does a difference in degree become a difference in kind? (Not arguing the specific point -- but differences of degree do matter in the messy empirical real world.)
- jtuente 11y agoWhether morality is or isn't binary isn't quite the point you should be making. It's that not everyone shares the same views of morality. Some people find private property immoral, for instance. The reason that we have moral "gray" areas isn't so much because morality isn't binary, but more because what different people view of as moral varies. In a purely utilitarian sense, non-binary morality is more concerned with how closely an action comes to the "greatest good" in that an action can be morally good but not morally greatest good. But what defines the greatest good depends on how person defines morality.
- fblp 11y agoWhy does this line of investigation happen with British leaders but not in the US? Australia has also recently had a lot of media coverage of misuse of government benefits by political leaders. I feel that US media is awash with coverage on the presidential race, immigration, wars etc, but the integrity of politicians in congress isn't explored as deeply.
- JustSomeNobody 11y agoBecause the media in the US are star struck. They wan't to be on the red carpet. They want to be at the big parties. They want to clink glasses with the rich and powerful. That's why.
- lostInTheWoods3 11y agoDepends on where you get your news from. If all you do is watch the evening news, you will never get the full picture. Most of what is on television is so dumbed down as to be useless.
- jtuente 11y agoThe Panama Papers did not have any information with regards to anyone in the US (leaders, celebrities, or otherwise).
- cmrdporcupine 11y agoWhile I appreciate the general thrust of the Occupy emphasis on "the 1%", as an old school socialist I believe the real issue with the distribution of wealth is on who controls the institutions of wealth generation and power, not who happens to be holding large amounts of units of currency. That some people are 1% and others are in the 99% is a product of unequal distribution of power. By some calculations, I am briefly in "the 1%" in my country but I own know corporations, factories, large quantities of stock, and am in that tier only on account of a set of temporary circumstances, and I've paid over half of it out in income taxes. And I have no more power than any other average voter. Whereas there are people who have far more influence, and it isn't necessarily due to how much wealth they have, but more to do with the kind of control they have over wealth generation itself.
- jtuente 11y ago> who controls the institutions of wealth generation and power What would you define as the institutions of wealth generation and power? > And I have no more power than any other average voter. Is that because of your wealth of lack thereof or because you do not value that power over other interests?
- known 11y agoVoting != Democracy; Voters succumb to https://en.wikipedia.org/wiki/Stockholm_syndrome https://en.wikipedia.org/wiki/Stockholm_syndrome and https://en.wikipedia.org/wiki/Vote_selling https://en.wikipedia.org/wiki/Vote_selling
- mortona 11y agoTo my mind this really throws the excesses of the financial industry into light. The sum of money reportedly made David Cameron's father, as the director of a long-established stock brokerage, is less than some of my 25-year-old friends were earning as relatively junior employees at London investment banks in 2008 (£200k+ pa).
- dkural 11y agoWith the tax evaded, we could END hunger, we could END child poverty, we could have universal pre-school, we could pay for state college for everyone. It is good to keep in mind that society must be balanced between to centers of power: state/political power, and economic power. If the state has complete consolidation of both political and economic power, then you have Russia, China, etc. and corruption at a state level. If you have economic power control the politicians, you have something close to the US and some other countries where wealthy politicians pick and choose senators and greatly influence outcomes. Both extremes are bad - a state controlled by the wealthy, and all wealth controlled by the state. If the wealthy control the state, you have mass poverty, crime, a weak democracy, corruption, etc. If the state controls the wealth it has total power, so you have people disappear if they question it, you have mass starvation, no one to complain towards even if mines are unsafe, etc. In general, states killed 1000x more of their own people than corporations did.
- aantix 11y ago"David Cameron's Panama Papers Show How Little Offshore Tax Dodging Is Going On" http://www.forbes.com/sites/timworstall/2016/04/10/david-camerons-panama-papers-show-how-little-offshore-tax-dodging-is-going-on/ http://www.forbes.com/sites/timworstall/2016/04/10/david-cam...
- onetimeusename 11y ago> Thirty years of runaway incomes for those at the top, and the full armoury of expensive financial sophistication, mean they no longer play by the same rules the rest of us have to follow They wouldn't have played by the same rules even without offshore tax havens because they would be required by law to pay higher tax percentages than most people anways. Is it a surprise to anyone that people try to avoid paying 45, 50, sometimes as high as 90% on their earnings in tax and perhaps just as much on illiquid, inheritable assets?
- JoBrad 11y agoDoesn't seem like they fought in the same ways, as underhandedly, when they were actually paying 90%.
- chrisfromwork 11y agoTired of the 1% categorization. People making 600k annually aren't single handedly affecting us political outcomes or storing money offshore.
- WalterBright 11y agoIt isn't remembered today, but in the 80's Reagan made a deal to get his tax cuts through by eliminating tax shelters (tax shelters are poorly performing investments made worthwhile only because of favored tax status). This caused investment to flow out of poorly performing investments into better performing ones, which was good for the economy. I suspect that had a lot to do with economic growth in the 80's. Moving investment money offshore to reduce tax liability is the same thing, and the solution is the same - reduce tax rates so that it is no longer worthwhile to invest elsewhere.
- anon4 11y agoSky is blue, news at 11
- hawleyal 11y agoDuh
- tn13 11y agoRich people corrupt democracy ? Does this mean if rich people leave politicians alone, politicians will be somehow honest? I am used to Guardians amateurish articles but this puts the bar even lower. Just like there is no such thing as "natural balance" there is no such thing as "honest democracy". All sort of special interest groups will always try to influence power in many ways. Rich people will always be at top. We have two choices. Either have entrepreneurs and free market driven ruthless rich people or more socialistic crony capitalists who steal our money using government. I prefer the former any day.
- lerpa 11y agoRegarding representative democracy there were roughly 2 lines of though, historically speaking: 1) the ones that believe government would work as long as we had good people there; and that's where we need to focus, getting good politicians that can do good things, oh well if there are bad apples, nothing is perfect 2) government is a necessary evil, that has to be constantly under check because even if there is good such thing as a good politician, the ones that should worry us are the bad ones even if that also hinders the good ones; oh well if government has it's hand tied, government doesn't need to be a father figure, and has to be limited The first group, fueled by the symbiosis of some enlightenment naivete, different classes of people trying to legislate advantages for themselves and the lust for power, won over time.
- daveheq 11y agoThey don't need to hide it offshore when America is just about as good a tax Haven now (ahem, Arizona, Nevada)