Tax evasion is just the tip of the ice-berg...
Many wealthy German businessmen and women are shaking in their boots - tax investigators in Germany have been following up on leads regarding tax evasion for the past week - and more than 900 individuals could be implicated.
According to the minister of finance - "It is the elites who are threatening to cause the system to collapse".
Having just finished Moises Naim's book - Illicit - I am more than aware that tax evasion is just the tip of the iceberg... and while this type of greed and "uncontrolled capitalism" could have cost the German state almost €4 billion ... it is just the tip of the iceberg.
The illicit market, as Naim depicts in his book, is worth billions upon billions more, and it has far worse consequences for the victims of traffiking than the merely the loss of some tax revenue for the German government (even if it is a significant amount).
What Naim suggests in order to combat this growing market is more coordination between goverments, targeting the sources of certain trades and attempt to diminish the economic incentive for illicit traders - through higher and more stringent fines and penalities for example.
The proliferation and complexity of the illicit market is what struck me most about Naim's book, and it also made me think what can we possibly do to stop it.... cracking down on tax evaders in Germany is a step in the right direciton, but it definately doesn't address the humanitarian crisis that is caused by the shadow economy.
1 Comment
Liviu Croitoru
Funny, most of those suggestions are often cited as needed to help curtail rampant corporatism. Getting that level of cooperation between states would be nice! Global regulatory bodies, taxation policies... ah, the end of poverty as we know it. There's no need to tap the illicit markets, the lawful ones are skipping out on more taxes and wages than the US military budget, ha! Regardless, to have intergovernmental or supranational control over transnational illicit markets, you'd have to also have some framework for the legal markets. Although, it might be a nice start that more international actors can agree on.