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6 April 2016updated 27 Jul 2021 9:01am

How the Panama Papers proved Bernie Sanders and Jeremy Corbyn right

This is a scandal long foretold by Bernie and Jeremy, says Liam Young. 

By liam Young

Five years ago a little-known independent politician from Vermont took to the Senate floor to blast a proposed trade agreement being vigorously supported by President Barack Obama and then-Secretary of State Hillary Clinton. Speaking then, Senator Bernie Sanders said the following:

“…it turns out that Panama is a world leader when it comes to allowing wealthy Americans and large corporations to evade US taxes by stashing their cash in off-shore tax havens. And, the Panama Free Trade Agreement would make this bad situation much worse. Each and every year, the wealthy and large corporations evade $100 billion in US taxes through abusive and illegal offshore tax havens in Panama and other countries.”

The leak of the Panama Papers offers Sanders the opportunity to tell Clinton and the rest of the establishment “I told you so”. Similarly, Jeremy Corbyn is able to do the same at home as the Prime Minister sweats under the heat of accusations surrounding his late father’s offshore dealings. Yesterday the Labour leader’s Twitter account shared a video of Corbyn calling for serious reform as the Tory benches laughed off his questioning.

But look at who is laughing now. The Panama Papers demonstrate a salient point: capitalism remains flawed and requires regulation. It is sad that after the abuses of the last years we require this reminder. We have seen what an unregulated banking sector can do. When the market is left to itself it takes and takes until it can take no more. The theory of trickle down economics has been exposed as bankrupt; the rich get richer and that is the end of it. Now we know that as the richest people around the world have been calling for austerity they have been hiding their wealth in offshore accounts.

The crisis of capitalism is reaching the cliff-edge. Just as Sanders’ message continues to gain traction in the United States, Corbyn’s anti-austerity message must be utilised in order to challenge the Tory narrative. While the Government talks tough on tax avoidance the Panama revelations suggest that Britain is only aiding the world of offshore finance. While there is no suggestion this is the fault of a single individual it is clear that much more could be done. Jeremy Corbyn’s call for direct rule so as to prevent abuses is a step in the right direction. It seems highly unlikely that the Tory party will consider this. Instead, the government seems content to highlight their current attempts that have wielded little result.

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The issue of tax justice now finds itself front and centre. Given that the story has dominated the news for the past few days and does not look to be going anywhere anytime soon the time is ripe for confronting the flaws of capitalism. While many are quick to laugh off the likes of Bernie Sanders and Jeremy Corbyn it is undeniable that time after time they have been proven right on issues of exploitation. The extent of this avoidance is gross and it seems that those on the right are ignorant of it at best and fuelling it at worse. Only those ready to face up to the flaws of the capitalist model will be able to reform it in the interest of working people.