"While it is legal to organise finances in this way, we must question the ethics of a system that makes the ultra-rich richer and leads to growing inequality around the world. This goes to the fundamental nature of how we believe society should function.
If we focus on the harm of tax avoidance to society, rather than how it is legally defined, then we can see that it contributes to growing inequality, increases tax burdens on resident taxpayers and undermines state legitimacy. Furthermore, the government’s accommodation of those structures that facilitate tax avoidance can also be misused by those looking to conceal criminal monies. For example, the UK has seen large investment from companies based in offshore tax havens into its property market, with suspicious wealth being used to buy high-end properties in London especially.
Tax avoidance not only shifts funds away from the public purse – which is even more pertinent in times of budgetary austerity and economic uncertainty (think Brexit) – but also undermines perceived social fairness. There is an improper transfer of money away from public goods.
Yet despite some political rhetoric outlining its deleterious effect, it is not being addressed with sufficient rigour. The UK – which has sovereignty over a number of the offshore states – has made a number of pledges to tackle tax avoidance – but this has not been followed by punitive, enforcement action.
A unitary tax regime – which treats a multinational business as a single entity in tax terms – may be one solution. But until there is a legal requirement for all avoidance schemes to be formally approved by the state before their use (rather than closed down after they are discovered), there will remain scope for tax entrepreneurs to avoid their liabilities."
From an article by a criminologist in The Conversation.
)