The Hidden Money

By Richard D Wolff, Truthout | Op-Ed 

"Hiding money in the ways and amounts lately revealed by the International Consortium of Investigative Journalists (ICIJ) is a deep kind of social corruption," writes Wolff. "It goes beyond questions of legality to the heart of modern political economy."

Recent revelations of hidden money by the International Consortium of Investigative Journalists (ICIJ) have embarrassed governments, large and small, and exposed many rich businesses and individuals. They used places like Lichtenstein, the British Virgin Islands, the Cayman Islands, Switzerland and, of course, Cyprus. Those countries' private banks wanted the money much as their governments wanted the revenue benefits of hidden money inflows. The rich around the world took advantage of those banks' services to launder money with some illegality attached to it, to evade or avoid taxes, to hide business deals from government scrutiny, and so on.

Reasonable estimates, based on ICIJ and other reports, suggest that many trillions of dollars sit in such hidden money accounts. It follows that debates in most countries about rates of taxation are missing the point. Many among the rich long ago found ways to avoid taxes, whatever the rates. They just needed and used that one "loophole" in the tax law that allows them to hide their money (or "offshore" it) in either personal or corporate accounts or both.