Nick Shaxson ■ Tax justice and human rights: an issue that’s been hiding in plain sight
A new paper by Advocate Paul R Beckett in the Isle of Man is adding to the small but fast-growing body of work on Tax Justice and Human Rights. Its crowd-thrilling title is The Representative Impact of the Isle of Man as a Low Tax Area on the International Human Rights Continuum from a Fiscal and Structural Perspective, and its preamble creates a fascinating teaser:
“The human rights movement is structurally predisposed to focus on victims – they are the ones to whom the rights violated belong. In recent decades, with the development and institutionalisation of international criminal law, there has also been scrutiny of perpetrators, at least in the case of abuses that constitute international crimes. But very little mention is ever made of beneficiaries. Those who (directly or indirectly) live off the practices and processes that victimise others have been allowed to remain comfortably out of sight.”
The enablers, as we’ve called them: the intermediaries, or the pinstripe infrastructure. A very good point. The introductory paragraph also makes powerful points.
“Tax havens and low tax areas have fallen to be debated almost exclusively in the field of taxation. No study has yet been undertaken from the fiscal and structural perspective of the impact of such areas in the context of international human rights. The problem has been hiding in plain sight. This essay will review the use of fiscal/taxation initiatives and structures in the Isle of Man as being representative of low tax areas and relate these to transgressions of and to the legitimate invocation of international human rights norms.”
He notes, with some (but not complete) justification, that the focus tends to be almost exclusively on the fiscal aspects of tax havens. But he rightly observes, that there are much bigger forces at play:
“Tax collection apart, there is no accountability mechanism. The low tax area structures channel global economic power centres and serve to focus that power where it can least be resisted. . . Regulating low tax areas solely in terms of taxation – being bound by the self-definition of such jurisdictions – will prove to be ineffective, given the chameleonic nature of international tax planning and the endless supply of camouflage cloth available to those who wish to wrap their dealings.”
There is a really fascinating section about purpose trusts in there, which is worth reading in its own right. As he puts it:
“In summary, the Archetype has no substantial connection with the Isle of Man apart from the fact that it is a creature of Isle of Man law. Its beneficial owners and purpose are obscured. Its hollow shell elements stand between those who would seek to enforce commercial and human rights accountability and those whose purpose in establishing the Archetype ought to render them accountable.”
This is thoughtful stuff, and well put. We don’t necessarily agree with every part of this article, but we think it is a valuable new contribution to the literature. Read the rest of the article here. And we’ll make it permanently available on our Tax Justice and Human Rights page.
New Tax Justice Network podcast website launched!
People power: the Tax Justice Network January 2024 podcast, the Taxcast
As a former schoolteacher, our students need us to fight for tax justice
Submission to the UN Special Rapporteur on extreme poverty and human rights’ call for input: “Eradicating poverty in a post-growth context: preparing for the next Development Goals”
17 January 2024