If We Can't Stop Corporations from Hiding in Cayman Islands to Avoid Taxes, We All Need to Become Pirates
Artist Paolo Cirio’s introductory video to Loophole4All.com teaches everyday people how to pursue tax loopholes by becoming a pirate and hijacking an offshore company.
With leaders from eight of the world’s wealthiest countries discussing economic policies that will affect citizens worldwide, the G8, always a symbol of undemocratic governance, is particularly contradictory this year. British Prime Minister David Cameron, host of the summit in Northern Ireland, is calling for a crackdown on widespread global tax evasion. But he might as well be called prime minister of major tax havens for his role overseeing London and the Crown Dependencies.
As usual, G8 members will advance measures aimed at maintaining, rather than resolving, these contradictions. Their proposals will not contain any changes that might distress corporate interests.
A mere 100 miles southeast of the summit, Dublin serves as a tax haven and a center of massive tax evasion for many of the wealthiest corporations. American companies like Cisco and Apple set up subsidiaries in Dublin to evade U.S. taxes, since corporate tax rates are roughly three times lower in Ireland than in the United States. Apple’s Irish affiliate actually paid no taxes on $30 billion in profit over the last four years. Corporate CEOs defend such tax evasions by presenting themselves as job creators acting for the benefit of the economy as a whole, but they leave out the data showing the decline of the middle class and consequent increases in poverty and homelessness. Ireland is not such a great place for normal people, with its severe austerity and outrageously high unemployment.
If corporations don’t pay taxes, then it follows that when people buy iPhones, search on Google or order items on Amazon, everyone loses hospitals, schools, road maintenance and eventually pensions. Meanwhile, the lucky employees of untaxed companies get higher wages that directly produce unaffordable living costs for people employed by local and public businesses. Only those who work for the regime of major firms can survive.
People who raise their voices against the injustice of this situation by taking to the streets outside G8 summits have met escalating violence from security forces. In my twenties, I joined several anti-G8 protests across Europe, facing riot police that regularly employed tear gas, water cannons and clubs against peaceful demonstrators. At the Genoa summit in 2001, I dodged the massacre at the Diaz school out of pure luck. I have not always had the same fortune, and violent repression and mass arrests have become ordinary in the decade since.
Although street protests are crucial in manifesting dissent, we need to supplement public demonstrations with new, creative strategies of subversion. For instance, with the project Loophole4All.com, I managed to unsettle corrupt Cayman Islands authorities and international accounting firms by creating a caricature of the Certificate of Incorporation used by shell companies set up in the Caymans. At the same time, I drew attention to thousands of fraudulent companies, engaging the public in an unusual form of civil disobedience that threatens the offshore financial system.
Political innovation should be considered an art form that challenges brutal repression and creates solutions for global governance. I believe that artists can create legislative and financial models for the complex needs of the 21st century, incorporating humor, beauty and interactivity into new forms of social organization. Just as creativity and concrete social goals come together in architecture, contemporary artists should intervene in proposing policies that work for our times, while guiding us in interpreting and unveiling the invisible truths of our world.
The absurdity of the unsolved legality of offshore business helps to expose to everyone the disorder of our times and the need for radical change. The vast exploitation of discrepancies among legal jurisdictions undermines the notions of law and national borders that are central to contemporary civilization. Globalization has outstripped the power of governments, businesses and citizens; each is left powerless against the other.
The leaders at the G8 summit may recommend some weak international regulations. However, they won’t resolve the implicit conflict of global economic competition. Take the cases of Russia and Cyprus, China and Macao, the United States and Delaware or the United Kingdom and its Crown Dependencies. Every economic power has its own offshore center as a structural financial instrument that cannot be dismantled without major consequences. The use of offshore finance is too big to fail. The financial centers of London, New York, Frankfurt and Hong Kong are today’s toxic factories, and they exploit offshore jurisdictions like the Caymans, Jersey, Zurich and Singapore as noxious, yet legal resources.
As the American Senate and the British House of Commons interrogated the CEOs of Apple, Amazon, Starbucks and Google about their massive tax evasions, it was evident that these companies would get away with the biggest robberies in recent history with nothing more than a slap on the wrist. The public, otherwise powerless, could only laugh at this nonsense.
When impunity and injustice are the new normal, transparency becomes an empty word. Corruption is no secret in Ireland, for example, which never needed to hide the fact that corporations pretend to be based there in order to evade taxes everywhere else.
Embedded in digital technologies, transparency is unavoidable, but it isn’t enough to tackle present and future abuses of power. Leaks of unclassified information are important; however, information doesn’t make any sense by itself. The huge quantity of data published by WikiLeaks and the recent Offshore Leaks can only generate political change if mainstream media filter the leaks sensitively and honestly. (Hence, whistleblower Edward Snowden turned to Glenn Greenwald, because he trusted the journalist, and his outlet The Guardian, to tell the story of the U.S. National Security Agency’s surveillance.) Real change can only come about when people incisively interpret the political and ethical value of information.
We should all be involved in designing alternative tax structures in a process similar to the participatory budgeting initiatives that have spread from Brazil to Mexico to the United States. For example, people and businesses could be empowered with tools that let them determine which area of society needs their funds. People should be able to enact change in a more participatory and fluid manner, rather than waiting on a slow and corrupt legislative system to deliver tax reforms.
We already have the tools for a direct and open democracy. What we need is a cultural and educational revolution that can bring it into being. Designing new ideas for governance is the real creative challenge of today. Faced with the austerity recommended by politicians and economists, artists can activate the utopian imagination, fostering innovative forms of participation and shared cultural values in social structures.
Paolo Cirio interviews John Christensen, executive director of the Tax Justice Network; William Brittain-Catlin, author of The Dark Side of the Global Economy; and Jack Blum, chair of Tax Justice Network USA; and Chris Taggart, co-founder of OpenCorporates.