300 economists urge to end tax havens

A group of over 300 economists from over 30 countries have submitted a open letter to world leaders advising that there is no economic justification for allowing tax havens and in the urging them to take meaningful steps to end offshore opacity. The brief argues that these tax jurisdictions do not add any value to global wealth or well-being, but instead benefit certain wealthy individuals and multinational companies at the expense of others, thus contributing to aggravating inequality.

The signatories to the letter, which have been coordinated by Oxfam, include among other illustrious names Thomas Piketty, author of Capital in the 21st Century; Angus Deaton, current Nobel Prize in Economics; Olivier Blanchard, former IMF chief economist; or Jeff Sachs, director of the Earth Institute at Columbia University. The letter is addressed especially to world leaders and representatives called to meet at the Global Summit Anti-Corruption to be held in London this Thursday, May 12.

The undersigned economists, despite their differing views on fiscal policy, agree that “territories that allow assets to be hidden in shell companies, or to shift profits from companies that do not operate there, distort the global economy.” Recognizing that change is not easy because of powerful interests that benefit from the status quo, they task governments with agreeing to global transparency standards and ensuring that all territories make beneficial ownership information of companies and funds public. The letter makes a direct appeal to the United Kingdom, host of the summit, for having sovereignty over a third of the world’s tax havens.

Jeff Sachs, one of the signatories, has pointed out in statements collected by The Guardian that “tax havens are the result of deliberate decisions by major governments in collaboration with important institutions that move money” and that “they are not you needed the Panama papers to know that “global tax corruption is rampant in havens” “If the United Kingdom, the United States, and the European Union were to agree, there would be a spectacular change in a short time.”