The leak last month of the so-called Paradise Papers comes with a certain sense of déjà-vu. Investigative journalists identify a body of compromising financial papers; stories revealing the sordid details of the tools the great and good use to ‘sweat’ their assets and avoid national tax regimes are run over a series of days and weeks; offending parties respond with a mix of contrition and defence; politicians call for change.
But, ultimately, it seems little does change. When compared to the Panama papers last year, how has the debate moved on and are there signs that the public is increasingly simply shrugging its shoulders and accepting the status quo?
Take the current tranche of Paradise revelations, which make for frustrating – if sometimes amusing – reading. Consider the irony of the Queen of England’s financial administrators avoiding the taxes collected on her behalf. Bono, we learn, has invested in some lucrative offshore schemes, presumably to offset his generous charity work.
It is all more than a little embarrassing, but previous offenders have worn the criticism well and it is likely the current list of stars will do the same. Gary Barlow made the transition from teen pin-up to poster-boy for tax avoidance, but remains in the limelight. Jimmy Carr is still on screen and is slowly clawing back his reputation, turning the tables on his detractors as he does so.
Having received more criticism than most over its tax arrangements, Amazon continues to trade exceptionally, posting Q3 revenue results of $43.7 billion, and we can put money on the fact that we’ll all continue to buy Apple products, regardless of where the tech giant domiciles its profits. Based on this track record, it’s unlikely we’ll be seeing a republican backlash against the monarchy, or to see U2 album sales slide (or at least not for that reason).
Comparing Paradise with Panama shows that, aside from a few cases, it’s proving difficult to shame politicians, celebrities and businesses into a more egalitarian way of managing their assets. What, then, of the politicians and how could they help? As all coverage is at absolute pains to point out, nothing illegal has taken place. So, wouldn’t it make more sense to make it illegal if we don’t like it?
The complicated reality is that tax avoidance remains a competitive global market in which high profile individuals are only the most media-friendly faces. The real players in this game are the financiers, oligarchs and rulers of the free and not-so-free world – and they are legion.
In this context, one country’s revenue loss becomes another’s gain and there is a persistent view that it is a necessary part of the capitalist system, providing a convenient pressure release which enables global investment markets to keep turning. While this view remains endemic in the financial capitals of the world, it seems reports of celebrity tax intrigue are here to stay.
Matt Lloyd is an account director at Camargue