Treasure Islands: Tax Havens and the Men Who Stole the World should come with a health warning. It might read something like: “Warning: this book could induce high rage and raging blood pressure. Please check with your heart doctor before opening.”
The story it tells is not, on the surface, terribly surprising. We know that since around the 1970s the amount of tax paid by the rich and multinational corporations has plummeted, and the rest of us are paying the price, both in cut services and benefits and in the fallout from the financial collapse of 2008.
But the problem is that the ways in which this is done is often so complex, so wrapped up in acronyms, in technical financial terms and obscure places, that it has been easy for governments to shrug and say “it’s all too hard to deal with”, or fob us off with claimed reforms that have no impact.
The great achievement of this book is to spell out exactly what is happening, the mechanisms, the corruption of politics and the huge cost that the world economy (i.e. all of us) – but particularly people in the developing world – are paying. And this in terminology that anyone can understand, and in a lively style that I’ll guarantee will leave you gripped. It’s almost like a thriller, except you already know how it ends.
Here’s how Shaxson sums it all up in a sentence: “Imagine you are in your local supermarket and you see well-dressed individuals zipping through a ‘priority’checkout behind a red velvet rope. There is also a large item ‘extra expenses’ on your checkout bill, which subsidises their purchases. Sorry, says the supermarket manager, but we have no choice. If you did not pay half their bill, they would shop elsewhere.”
Perhaps the most striking conclusion, if you’re in the UK anyway, is the fact that the City of London acts as the grand-daddy of tax havens. And a defining characteristic of tax havens, Shaxson tells us, “is that local politics is captured by financial services interests (or sometimes criminals, and sometimes both) and meaningful opposition to the offshore business model has been eliminated”.
The flow of the book is broadly historical. It begins with the British founders of offshore tax avoidance, the Vesteys, who made their chief fortune with Argentinian beef.
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