Tax avoidance and the myth of trickle down wealth

The files released from the International Consortium of Investigative Journalists (ICIJ) may finally put faces to the offshore accounts scandal whose numbers are quite astounding.

A recent report by the Tax Justice Network found that the equivalent to the total combined GDP of U.S. and Japan is being hidden away by those rich enough to use offshore accounts.

Taxpayers’ money being used to fund tax avoidance schemes

The Organization for Economic Cooperation and Development (OECD) – a body that advises Britain and other European countries on tax and spend policies – has been accused of enabling global corporations such as Google Inc. (GOOG), Hewlett- Packard Co. and Amazon.com Inc (AMZN) to dodge taxes by shifting profits into offshore subsidiaries.

Osborne may need to rethink anti-tax avoidance measures

Previously describing tax avoidance as “morally repugnant”, Osborne has commendably acknowledged the extent of the problem as a drain on public finances. Unfortunately the key weapon in Osborne’s arsenal to tackle the problem – the General Anti-Abuse Rule (GAAR) – is far too narrow to prevent the major headline-grabbing schemes which have emerged in recent months.