Bob Richards, Howard Quayle, and Silvio Schembri have a lot in common. All three are or were politicians in small islands linked in the present or past to the United Kingdom. They are all especially interested in business and money. And they all gave comments to the press about the Paradise Papers matter.

Bob Richards was until recently the Finance Minister of Bermuda, a British Overseas Territory with something of a reputation for creative banking practices. Richards told BBC News that there was nothing secretive about banking in Bermuda – it was transparent “to people that count”, who did not include nosey journalists. Besides, it was not up to Bermuda to “collect other countries’ taxes”.

Quayle is the Chief Minister of the Isle of Man, a Crown Dependency that might be called a kingdom of offshore heaven. There was absolutely nothing amiss about the Isle of Man’s financial regime, he told BBC Panorama. Rather, the island was a “responsible jurisdiction” which complied fully with international regulations on tax transparency. Any claims to the contrary would be “fully investigated”, and would “lead to action if proven”.

Schembri is the Parliamentary Secretary for Financial Services, Digital Economy, and Innovation. Certainly he was very innovative in his comment to journalists the other day. The attacks on Malta’s financial sector were nothing but the result of the “bitterness” and “envy” of countries whose ultimate aim was to poach our business, he said. It was important to distinguish tax evasion from “competitive tax”, and it was the latter that Malta cultivated.

Besides, other countries had nothing on us as far as morality was concerned. Their faults included the arms industry, which led to war and the killing of people. “Financial services do not a war make,” Schembri added.

Let’s leave aside the obvious, if nebulous, links between finance and war, and the arms industry and offshore tax avoidance. We’re left with many reasons why the Paradise Papers revelations deserve to be taken seriously and acted on.

First, the kind of barefaced lying they spawn is cynical in the extreme and an insult to citizens. Invariably, a language of ‘transparency’, ‘due diligence’, ‘red flags’, and ‘know your customer’ is wheeled out that flies in the face of black-on-white evidence that tells a quite different story. Mossack Fonseca’s hundreds of thousands of offshore companies handled trillions of dollars, a chunk of which were unquestionably linked to dubious sources. No matter, because the firm’s website is a waltz on the moral high ground of “responsible” financial services.

Politicians assure us that it is in our interest to permit, nay encourage, the super-rich to avoid tax

As if that weren’t deceitful enough, politicians go a step further. They assure us that it is in our interest to permit, nay encourage, the super-rich to avoid tax. The usual argument is what is known as ‘trickle-down’, and it goes as follows: the super-rich may be getting away with paying very little tax, but we stand to benefit in any case from their generous spending habits. One man’s unwitting largesse is another man’s meal, so to say.

A certain Lazarus comes to mind who desired to be fed with the crumbs that fell from the rich man’s table. The dogs, we are told, came and licked his sores.

It is useful to know what these sores might be. Not least since, Panama or no Paradise, many of us reading the papers on Sunday morning likely live fairly comfortably. It is not immediately clear how tax avoidance – sorry, competitive taxation – on such a Jurassic scale might affect us.

Some idea is given in a splendid piece by political scientist Edward N. Luttwak. Writing in the Times Literary Supplement in the wake of the Panama Papers last year, Luttwak asks a fundamental question: Why has income distribution in the more developed economies become increasingly unequal pari passu with the advance of globalisation? In other words, why is it that rich countries with enormous fiscal capacities are home to the kind of economic desperation that gave us, among other things, Donald Trump?

Luttwak’s convincing answer is that systemic tax avoidance has a lot to do with it: “When the less affluent must pay their payroll taxes and income taxes in full, while the more affluent with offshore companies do not pay, the total effect of the taxation system is regressive.” Put simply, financial services exist that rob exchequers of vast amounts of money. In so doing they undermine the whole idea of taxation which, in a country like Malta, is the provision of State services.

The upshot is that, no matter how well we are doing, we could be doing better. The consequences of this missed appointment are especially wounding to low-income groups. (There are people in Malta who hold a job but struggle to make a living.) Thus, Luttwak’s answer to his own question, and thus also the outrageous incoherence of a Labour politician who sings the praises of ‘competitive taxation’.

There’s more. Richards, Quayle, and Schembri are examples of a nationalism of sorts that ends up defeating any hope of economic morality. Schembri, for one, is happy to absolve Malta of any wrongdoing, just because larger countries, who in any case are envious and bitter, do worse (they sell weapons and wage wars). This kind of misplaced nationalism is not limited to taxation. It subverts collective environmental responsibility, among other things, and is a textbook case of when small is certainly not beautiful.

‘Competitive taxation’, indeed. No linguistic nationalism there, Schembri shares a dictionary of euphemisms with his counterparts around the world.

mafalzon@hotmail.com