It's a cliche we all have heard of before, that the rich put their money in Swiss or Cayman Island accounts. We've seen it in movies and TV series -- criminals, bankers, and people wiring money in and out of these accounts to make large payments, pay for ransoms, etc. It's been played out in fiction so much that the American people think that it's just that, fiction. The reality is that it's not at all fiction. The wealthy do indeed have trillions of dollars stashed away in these overseas banks -- some $21 to $32 trillion, according to experts. And how much of that money do you expect will "trickle down" to the pockets of regular people? Not even a few pennies.
While unemployment rates remain stubbornly the same or rise in other countries, billions of dollars are just "disappearing" from the books of multinational corporations and governments in oil rich countries. According to tax experts from the European organization Tax Justice Network, $800 billion have disappeared from Russia since the 1990s; $307 billion have gone missing from Saudi Arabia since the mid-1970s, and the list goes on. American multinationals who hire the world's top 5 accounting firms to prepare their balance sheets and financial statements are doing a great job finding loopholes to avoid paying taxes. This money ends up in bank accounts in Switzerland and The Cayman Island -- countries that fight off IRS requests and deny it access.
U.S. bank regulators are not enough to try to crackdown on banks that hide money for the wealthy tax absconders. The IRS wants to make sure it gets its share. Banks such as UBS, JPMorgan, Credit Suisse, and Goldman Sachs are under the microscope for fraudulent actions that end up cheating taxpayers. Banks are no longer working for the well-being of communities, but they are working at the interest of about 92,000 wealthy people around the world, according to the Tax Justice Network.
Conservatives who oppose regulation of any kind continue to protect these "job-creators" and defend their actions. These conservatives believe that the wealth created by the rich will "trickle down" to the masses -- an idea that continues to be debunked by economists. Trickle down economics or "Reaganomics" has been proven to be one big lie. Many wealthy people do not spend their money to the benefit of communities around the globe, they instead put it in tax havens where no one, not even the U.S. government can get its hands on it.
During this year's World Economic Forum in Davos, bankers from the top financial institutions around the world finally talked about the rampant corruption that is pervasive in their industry. Some agreed that the ropes needed to be tightened to avoid further discontent from government regulators and consumers, but how much of that talk was PR and how much was an actual call to action remains to be seen.
Certainly, salaries for middle class families are not going up. The working poor are still slaves to minimum wages with no employment benefits. If Reaganomics hasn't worked by now, it never will. But this won't stop GOP conservatives from demonizing agencies that are trying to make the wealthy pay their fair share. These Republican conservatives will continue to blame "big government" for the ills of society, instead at looking at the real source of the problem: the greed in corporate America.
President Obama's call to raise taxes on the wealthy wasn't at all baseless. For far too long, wealthy individuals have been able to grow their coffers while the American middle class taxpayers shoulder the expense of keeping roads paved, airports running, and our police and fire services going. The wealthy don't feel the need to contribute to the needs of a whole American society because they live their lives traveling and living abroad in Europe or in islands in the South Pacific. They forget that the majority of the consumers of their products and services are mostly middle and working class. When these consumer can't any longer afford to buy, the wealthy would already have enough stashed away to continue living in luxury and comfort for generations to come.
The only thing standing in the way of greedy rich tax absconders is government. Little by little though, government is getting chipped away by those who want to cut its programs and reduce its power. The idea of a smaller government sits well with the wealthy because without government, regulations are out the window. The "free-market" would be able to capitalize of anything and everything without Uncle Sam looking over its shoulder to call foul on working conditions, pollution, and human rights.
Further related reading:
Wall Street and the Obama Administration: http://www.salon.com/2013/01/29/barack_obama_wall_street_co_conspirator/