Tax havens come clean ahead of G-20
British Prime Minister Gordon Brown and his Australian counterpart Kevin Rudd address faith leaders at St. Paul's Cathedral in London ahead of the G-20 summit.
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Kai Ryssdal: President Obama landed in London this evening. He's there for a big economic summit that starts Thursday. Leaders of the world's top twenty economies are going to try to figure out how to stop the global slowdown. They'll talk about stimulus packages and tighter regulations. It's not clear what actually might come out of it.
But the Brits have already declared one G-20 breakthrough: a crackdown on tax havens. So, what does that have to do with an economic crisis? From London, Marketplace's Stephen Beard explains.
STEPHEN BEARD: Ten tax havens have apparently agreed to come clean. Switzerland, Liechtenstein, Luxembourg, and Monaco among them. They say they will share information about suspected tax evaders. The deal has been more than a decade in the making. But clinching it now could be a godsend for the U.S. and other big governments. Especially now. Tax revenues are shrinking; stimulus spending has taken off. Grace Perez-Navarro of the Organization of Economic Cooperation and Development:
GRACE PEREZ-NAVARRO: In the midst of a crisis it's very difficult to raise tax rates. So what can governments do? All they can try and do is make sure they collect every penny that is legally due. And this is part of that initiative.
But not everyone is impressed by the tax-haven breakthrough. Stephen Platt is a lawyer who prosecutes financial crime in offshore centers. He says the U.S., for one, should take a closer look in its own backyard.
STEPHEN PLATT: There are several states within the United States itself that have very, very lax controls, that attract very shady business.
Nevada, Wyoming and Delaware, he says, allow the kind of secrecy in which tax evasion flourishes. The kind of secrecy the U.S. denounces in the tax havens.
PLATT: This, I think, reveals a hypocrisy.
He says in some respects Britain is just as lax as America. And he claims Britain is bragging about the tax-haven breakthrough to distract attention from the regulatory failures in Britain and the U.S. that really caused the crisis.
In London, this is Stephen Beard for Marketplace.