The real sin (from what I remember from macro economics class) is that the money is doing nothing. Our whole financial system is built on the foundation that the spice (money) must flow, preferably resulting in tangible goods or services being made or traded in exchange which creates jobs.
The rich are given tax breaks because they are supposed to be “job creators” because they spend lots of money and invest in capital goods which theoretically helps everybody. By hoarding the money they are hurting everyone but themselves.
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I think classical economics would insist that hoarding money is hurting yourself. Why aren’t you out there getting value for that money instead? Of course classical economics has some problems.
Something I never see recognized when people talk about the economy is that money is power even when you don’t spend it. The reason tax agencies go after middle class people who didn’t understand tax forms and don’t go after very wealthy people who went out of their way to break the law is that tax agencies themselves have financial limits. Taking a billionaire to court is a war of attrition they would lose. Everyone understands that nuclear weapons are powerful when never used, the threat of using them is power. Money isn’t different.
That’s what needs to be dismantled - the power of the extremely wealthy. They shouldn’t be writing our laws or deciding which country we go to war with. I don’t care if they have gold plated helicopters, that’s fine. My fantasy economic solution would be to take the top 0.1% or so and just say, “Look, you guys won the economy! You are the new aristocracy, we’ll give you all the things you want, but you won’t be allowed to fuck with anyone else’s life anymore. No more saying who gets to live where or who gets access to what services. No more changing laws to give yourself more rights and everyone else fewer. But you want things? You get the things, we make them for you at no charge. Forever. You and your kids and their kids. Unlimited wealth just without the social power that wealth comes with.” Because we can float a few mega-rich leeches as long as they aren’t screwing everything up for the rest of us. But my question is, would they take that deal? I don’t think many would, because it’s all about feeling powerful, not about being wealthy.
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Clearly these people are working the wrong jobs.
I’d argue that a sense of humility with respect to one’s morality is likely to propel people towards better choices. People who are prepared to dehumanize others (“those people aren’t like you and me”) don’t have the best track record of decisions.
While there is some art is strong boxes, many of the shell companies actually own productive assets and depatriate the profits back to the shell companies based in low tax areas. After all, unless you’re trying to evade estate taxes or other wealth taxes, there’s no point in hiding non-productive assets. It’s the profit making assets that you hold overseas.
For me, it’s the loss of tax revenues and why I’m happy to see the Panama papers get a reasonable amount of publicity. It’s pretty hard to actual stop the legal maneuvers that allow people to set up shell companies, but (1) I’m happy to see people using such companies pay a social cost for going that route, and (2) the risk of public exposure may deter some from joining them.
As well, tax agencies are not stupid. I would expect they’re fairly closely examining the data for indications of people who have stepped beyond legal tax avoidance and into actual illegal evasion. Few report being in the tax man’s cross hairs to be a pleasant experience, no matter what their income level.
Does wealth correlate with support for war in the US? Because certainly that’s not my experience in Canada. The few times I’ve spoken with higher executives in a personal context, they’ve been pretty universally anti-war. Bill Gates and Warren Buffet, et al don’t strike me as war mongers. Are the majority of US billionaires?
Certainly industry regulation is a lot more problematic. The trouble is that you want experts involved to avoid writing stupid regulations, but of course that means people involved in the industry who see the cost of regulation, but don’t always internalize the social cost if things blow up. And of course, when things aren’t blowing up, we all appreciate the benefits.
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