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May 13, 2008

Tax Evasion Kills 1,000 Children Every Day

Christian Aid: Death and Taxes:  The True Toll of Tax Dodging:

Christian Aid has concluded that the necessary money, and more, is already available – if only those who owe it would pay up. We are talking about tax. This report seeks to expose the scandal of a global taxation system that allows the world’s richest to duck their responsibilities while condemning the poorest to stunted development, even premature death.

This is in part to do with super-rich individuals. It is also to do with governments, including the UK government, who have let this situation develop and persist. But it is mostly about the world’s transnational corporations wielding their enormous power to avoid the attentions of the tax man – with devastating results.

The situation is stark and urgent. We predict that illegal, trade-related tax evasion alone will be responsible for some 5.6 million deaths of young children in the developing world between 2000 and 2015. That is almost 1,000 a day. Half are already dead.

(Hat Tip:  Tax Justice Network.)

Update:  Joe Kristan disagrees:

I don't buy it. In much of the developing world governments are merely lawless gangster regimes. Millions of people trying to scratch out a living in countries without the rule of law survive only because they, or their employers, hide enough to eat from their parasitical overlords. In such places tax evasion saves lives by letting people feed their children, rather than their dictators' Swiss bank accounts. It's hard to see where the people of Burma, for example, or companies that operate there, have a moral obligation to feed a government that won't even let outsiders in to help feed their subjects after a humanitarian disaster.

It's wrong to apply the same kind of ethical standards to tax evasion in a despotic land that applies in the U.S. While our tax system has flaws (heaven knows it does), at least you have some predictability as to what is taxable, and you have a reasonably fair system to turn to if you disagree with the IRS. Try telling, say, the Cuban or Russian government that you disagree with their tax assessment and see how far you get.

May 13, 2008 in Think Tank Reports | Permalink

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Comments

The comment about the Christian Aid report is simply wrong. To say that "In much of the developing world governments are merely lawless gangster regimes" is true or partly true, but tax is the key to solving the problem. Try this research document: http://www.aei.org/publications/pubID.27798/pub_detail.asp - which says this:
"Taxation is an underrated tool in the effort to build more capable and responsive states. . . . the political importance of taxation extends beyond the raising of revenue. Taxation can stimulate calls for more representative and accountable governments, while the need to increase revenues can stimulate institution-building. Both have the potential to bolster the legitimacy of the government and enhance democracy. Foreign aid can be a substitute for absent revenue, allowing critical development functions to be performed. But funding state expenditures primarily through resources that are raised without much effort (foreign aid or revenues derived from oil and other natural resources) does little to stimulate the development of state capacity. In Europe, taxes not only helped create the state, they also helped make it democratic."

Africa's nations are among the world's lowest-tax states, as a share of GDP. This reflects, but also causes, their poverty and poor governance. Cracking down on tax avoidance and evasion would not only help these countries raise revenue to replace aid (which makes rulers accountable to donors, not to citizens), but it would help them reform their "lawless gangster regimes" as the commenter put it.

Posted by: Nicholas Shaxson | May 14, 2008 4:42:12 AM

So... you're saying that if you give gobs of money to grossly irresponsible people, they become responsible? Sounds reasonable to me.

Posted by: MA | May 15, 2008 9:47:28 AM

So, Mr. Shaxson, giving gobs of money to absurdly irresponsible people will make them responsible?

Sounds reasonable to me.

Posted by: Reply | May 15, 2008 11:44:53 AM