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Raymond Baker and Eva Joly in the NY Review of Books

November 16, 2009

By Clark Gascoigne

Clark Gascoigne is the Communications Director at Global Financial Integrity in Washington, DC.

GFI Director Raymond Baker and GFI Advisor Eva Joly have cowritten an essay on illicit financial flows which appears in the current edition of the New York Review of Books. From the essay:

On May 4, the Obama administration announced a plan to crack down on offshore tax havens, which it said are costing the United States tens of billions of dollars each year. The President’s proposals were primarily aimed at finding ways to increase revenue from wealthy companies and investors who use loopholes in the law and offshore subsidiaries to reduce their US taxes. But the administration is largely missing a far more devastating problem related to offshore finance: money gained from criminal and other illicit sources. With the use of tax havens and other elements of an increasingly complex ‘shadow’ financial network, vast sums of illegal money are being shifted throughout the global economy virtually undetected.

The article is rather long, but it goes on to draw some very important conclusions. It calls for strengthening anti-money-laundering regulations, implementing a form of automatic exchange of tax information among jurisdictions, and a new form of accounting requiring multinational corporations to disclose profits earned on a country-by-country basis.

Check out the full essay at NYBooks.com…

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Tibor R. Machan
This end note to one of my papers may interest you:
It is worth mentioning in this connection that a strong clue to the truth of this conclusion comes from discussions in families, usually around April 15th, as to the variety of ways that earnings by family members ought to be protected, including by means of competent tax advisors who may well indicate what might by champions of taxation be construed as dubious – illegal (?) – forms of tax dodging and avoidance. But see, for an enthusiastic, dogmatic call for merciless action against all tax evasion and dodging – that is, against all those who would escape the extortion that is taxation – Raymond Baker and Eva Joly (2009), “Illicit Money: Can it Be Stopped?” The New York Review of Books, December 3: 61–64. (The authors try to lump together escaping taxa- tion with all sorts of looting by various criminal agents but their sophistry is blatant.)