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4th Jul 2022

Stiglitz urges EU to tackle tax havens after Trump win

  • Joseph Stiglitz (r) said tax havens should be treated as carriers of infectious diseases. (Photo: European Parliament)

Joseph Stiglitz, the US economist and Nobel prize laureate, urged Europe to take on a leading role in the fight against tax havens, noting that US president-elect Donald Trump would likely have other priorities for his time in the White House.

”It’s hard to be optimistic when your president is a tax avoider or even evader-in-chief,” Stiglitz told the European Parliament on Wednesday (16 November).

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Trump refused to release his tax returns, the first presidential candidate since 1972 to have done so.

"If we cannot convince our citizens that we can tamper globalisation, there will be an anti-globalisation action," Stiglitz said, referring to Trump's anti-establishment agenda.

"Anyone who thinks globalisation is a good thing must be willing to address its darker sides, of which tax secrecy is one,” he said.

Tax havens pose a threat to global governance because they facilitate money laundering, corruption and other crimes, as well as unacceptably high levels of global wealth inequality, the Nobel laureate said.

”Countries and businesses that refuse to reform must be treated as the carriers of a dangerous disease. They should be cut off from the global markets,” he said.

Earlier this year, the economist was hired by Panama’s government to advise it on reforms of the country’s financial sector, after it became enmeshed in the Panama Papers revelations, the world’s largest tax evasion scandal.

Stiglitz resigned when he failed to receive assurances that the recommendations would be made public, but he still wrote a report about it, together with the Swiss anti-corruption lawyer Mark Pieth.

He presented the findings to the parliament's committee of inquiry on tax justice and international transparency, which was set up after the Panama leaks.

”Eighty percent of the activities revealed through the Panama Papers didn't actually take place in Panama,” Stiglitz said, highlighting the need for reform in the EU and US.

“There is a widely shared perspective that these havens only exist because the United States and Europe have looked the other way,” Stiglitz said, suggesting that influential lobby groups on both sides of the Atlantic had blocked progressive tax reforms for years.

To close down tax loopholes, it was necessary to set up public registries of the true owners of companies and trusts, as a fully-fledged country by country reporting, he sai.

There was also need to rein in lawyers, who play a crucial role in helping to hide away income.

Stiglitz said that countries that punish whistleblowers should should be put on an international list of shame.

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