Opinion Sur
If you filled a pool with water and the water drained through the cracks, you would have to close those cracks before continue adding more water. Some of this happens in many economies of the world and with greater severity in non-central countries that suffer a constant and immense drainage of resources. Unholy drainage that punishes peoples and contributes to the concentration of wealth.
The dramatic thing is that much of this drainage arises from illegal operations (crimes) or illegitimate operations (quasi-crimes).
Illegal operations include, but are not limited to, tax evasion, imposition of usurious interests, abuse of market power and fraudulent foreign trade operations.
Illegitimate operations are enabled by policies imposed by economic power that transform into legal what in other contexts are illegal. Thus, the dominators arrogate to themselves the power to decide what is legal and what is illegal, thus favoring unlimited profit at the expense of the rest of the population.
Who are the criminals and how ill-gotten resources leak
Dominators conceal the criminal drainage of resources they carry out based on their power and impunity is the result of appropriating revenues that belong to the State, consumers, workers, suppliers and competitors.
A part of these ill-gotten resources remains in the country swelling the illegal circuits of operation, but a large proportion flights to tax havens. One would think that the greatest criminal drainage that takes refuge in these dens comes from organized crime (trafficking of drugs, people, and weapons) but it is not so. A third of the flight resources have that origin, about ten percent comes from corruption and, warning! almost two-thirds of the criminal drain of resources based in tax havens is carried out by large companies and high-income families.[1]
It was pointed out that the criminal drainage of resources is not occasional but enormous and permanent, it is necessary to make explicit that it causes devastating social and economic consequences.
Thus, the great tax evasion and elusion allows criminals to increase their profit withholding resources that they should contribute to the treasury. In doing so, they defund the state, limiting its ability to provide social and productive infrastructure. The theft committed reduces public revenues and forces the State to resort to other sources such as indebtedness and greater issuance, seriously affecting public accounts. The resulting fiscal deficit is one of the devastating consequences of this robbery. It does not appear without reason but by losing legitimate income at the hands of those who have more. Hence, the solution imposed by the dominators to reduce social investment lacks legitimacy and meaning; the appropriate policy to close a fiscal deficit is, in the first instance, to firmly eliminate the criminal drainage of taxes due and not paid.
The very great evaders are known and not those who occasionally get caught (“parsleys” in the popular lexicon). And the various mechanisms they use to evade are also known. The example of agro-exporters is devastating.
In general, those who export agricultural production are a handful of large global corporations; producers who sell their production to stockpilers and exporters do not export directly. Here is where the great tax fraud begins. Large agro-exporters are part of a global network with subsidiaries or associated companies in every market around the world. This makes it easier for large agro-exporters operating in a country to sell to one of these subsidiaries abroad at a price below the prevailing international market price, which is technically called export under-invoicing. In doing so, it declares to the national treasury less profit and thus evades a large part of the taxes it should pay by stealing resources that belong to society as a whole. Meanwhile, the subsidiary now sells for the full market price to the export buyer and keeps the undeclared profit. The subsidiary may then remit that profit to its parent company or allocate those stolen resources to any other purpose.
It is crucial to unmask this criminal operation because it compromises the national sovereignty to decide how to retain and distribute national savings without punishing middle and popular sectors. Something that criminals know how to cover up while circulating in high social circles enjoying their outrages. It is unbearable that “white collar” looting enjoys impunity.
Another important component of the criminal drainage of resources mentioned above is the massive financial appropriation of surpluses. Given its magnitude (practically everyone is in debt) and complexity (articulation of local networks of usury and extortion with those who control global finance) requires dealing with the financial system, its rules and its regulations-deregulations as a whole, a challenge to be addressed in a future article.
Criminal Drainage and Politics
The priorities that each sovereign country adopts to close the criminal drainage of resources will vary according to its circumstances and stages of development. There are no unique recipe books such as those imposed by the centers of power and their international organizations that act as if the inevitable singularities of each situation and place did not exist. That is why only major strategic priorities are specified; policies and specific mechanisms are responsibilities inherent to each country.
Enabling these changes in direction and ways of functioning is based on a fundamental political foundation, forming a firm political coalition to win elections and effectively manage the mandates received. It is the greatest challenge to be able to successfully confront the economic power and its media and judicial accomplices. That power has set up trenches that allow them to manipulate public opinion and assert their interests.
A liberating political coalition is based on a permanent effort of clarification and social organization, including population sectors with diverse cultures and needs that did not always advance together. This prioritizes the importance of aligning desires and interests, something that does not happen spontaneously due to the constitutive heterogeneity of middle and popular sectors. With weak clarification and social organization, it reproduces vulnerabilities that the dominators know how to take advantage of to aggravate social fragmentation.
[1] GAGGERO, J., RUA, M. and GAGGERO, A. (2013) Fuga de Capitales III. Argentina (2002-
2012). Magnitudes, evolución, políticas públicas y cuestiones fiscales relevantes. CEFID-AR. Working Paper No. 52. Buenos Aires, December 2013
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