My Friend Died Last Week – Tax Could Have Saved His Life

February 26, 2015

     By Duncan Green     

My colleague Max Lawson (@maxlawsontin ), Oxfam’s head of global policy and campaigns, lost a friend to illness recently, and wrote this fine, angry polemic max lawsonin response (it appeared earlier this week in Huffpo):

My friend died last week. Mr Kumambala was a great man, who had taught mathematics to Malawi’s children for more than forty years. His huge smile and loud gasps and gesturing on every topic are unforgettable. Being one of two black men to do his Masters in Hull in 1986: ‘Lawson- there were so many whites! Crowding around! Pointing! And many of them were poor!’ Or my atheism: ‘ Lawson- you are a foolish boy- who do you think created you?’ To Malawian politics: ‘ Our politicians are thieves, our system is buggered!’ I will miss him terribly.

He was a kind, committed, decent man, and he died completely unnecessarily, for want of basic healthcare. Mr Kumambala was diabetic, and a combination of malaria and very low blood sugar killed him. It simply should not have happened. A fit man, full of life, with so much left to give. Cut down when basic medicine and simple healthcare would have saved his life.

At the same time last week we have all learned in detail the Swiss secrets of the filthy rich, hiding their millions away to avoid tax. I think we should stop talking about these seemingly endless taxation scandals in terms of dollars, euros or pounds as the currency to quantify the costs. Instead I would like to propose a new currency, the nurse, with perhaps the hospital as the larger denomination. Imagine the headlines on the Guardian front page:

‘Revealed: millionaire Ritchie Rich used Swiss Account to avoid 20,000 nurses worth of tax in one year’ Or ‘The Banana Corporation used the Cayman Islands to avoid paying any tax on its record profits. The taxation avoided was valued at around 400 hospitals’

2015-02-23-mrkumambala-thumbThe New Economics Foundation calculated that for every £1 of value generated by a tax accountant they destroy £47. By contrast, a hospital cleaner creates ten pounds of social value for every pound they are paid. How would a tax accountant feel I wonder if, instead of sitting in an office in front of an excel spreadsheet, when they got to the office one day they were directed downstairs and asked to climb into the cab of one of those cranes with a wrecking ball attached, and actually destroy a school? Or personally sack a thousand teachers? Unscrupulous tax accountants are like the drone operators of the financial world, spending their days helping clients defraud societies of billions at the click of a mouse before picking up their jackets and rushing to Waterloo to get the 18.30 train home.

On a global scale, tax dodging is depriving poor countries of hundreds of millions and often billions of dollars each year, as individuals and corporations are allowed to hide their money away and avoid paying tax. Last week’s HSBC scandal involved huge numbers for countries like the UK, but there were secret accounts for individuals from countries all over the world.

The figure for Malawi is $16.1 million dollars. It is not clear whether the Malawi money in the Swiss accounts is there legally- for many countries the money has been taken from governments illegally as the result of corruption- in which case it should all be returned. But even if we assume it is all legal in the Malawi case then it should be taxed. At the top Malawian income tax rate of 30 percent this would, by my rough reckoning, pay the salaries of 800 nurses.

And last week’s leak is just a tiny glimpse of this massive problem. Through tax dodging, billions in wealth is systematically redistributed upwards to the 1 percent with those at the top paying little if any tax, leading to obscene levels of wealth and inequality.

So for me it is simple. I will not accept a world where the wealthy are allowed to collude with their cashiers to squirrel away billions to gather dust in vaults in Geneva, when that money could have paid for insulin to save my friend.

February 26, 2015
Duncan Green