Illustration: John Shakespeare Konza is not permitted to name the client and, although the documents have all been leaked, only excerpts have so far been published. The tax office has had the material for several weeks. It's a small example of how Australia's authorities have started to analyse the Paradise Papers, and officials caution that two to three years of work lie ahead to exploit the trove. The worldwide media reporting of the papers already has named the Queen, Donald Trump's commerce secretary Wilbur Ross, and James Packer among the Appleby clients whose financial holdings in offshore tax havens are mentioned in the leaks. And the stories invariably include the important fact that it's entirely legal to move money into accounts held in such places. Which is, of course, a part of the problem.

Illustration: Jim Pavlidis But not everything that happens in these havens is legal, as Konza's example shows. The timing of the leak is exquisite. In the very week that marked the centenary of the Russian revolution and the birth of communist government, this massive leak of secret tax data reminded everyone of some of the growing and glaring inequalities that dog the modern world. Communism was history's mightiest, deadliest protest against inequality. The Paradise Papers draws attention worldwide to the fact that trillions of dollars sit in bank accounts in offshore tax havens protected by secrecy laws. How many trillions? The former chief economist for the McKinsey consultancy, James Henry, for instance, estimated the total at $US21 trillion ($27 trillion) to $US36 trillion. And that was rich individuals only, not counting corporations. And that was five years ago.

For perspective, that would be the equivalent of about a half to a third of the annual GDP for the entire planet. And it would represent perhaps $US200 billion in revenues that governments could be collecting in tax each year. Last year Oxfam published a study concluding that the world's richest 62 people own as much wealth as the poorest half of the world population. That is, 53 men and nine women have the same amount of money and assets as 3.6 billion people have collectively. That was a shocking statistic. But in January Oxfam published a correction. New data showed that the richest nine people last year had the same wealth as the poorest 3.6 billion. This year, as the concentration of wealth proceeds, it's eight people owning as much as the poorest half of humanity. The founder of microfinance, Muhammad Yunus, posits that as this process goes on "soon four people will own as much wealth as the poorest billions of people, and then two, and finally one person will have as much as half the human race. How can we sit back and let this happen?" Historically, we haven't. When too much wealth is in too few hands it creates a critical situation "which history has diversely met by legislation redistributing wealth or by revolution distributing poverty", wrote the husband and wife historians Will and Ariel Durant in their survey of Western civilisation, The Lessons of History.

So what'll it be this time? Legislation or revolution? Recent world politics has given an indicator that the situation is approaching a critical situation. Outbreaks of destructive populism such as Donald Trump's takeover of the US Republican party or UKIP's success in taking Britain out of the European Union are some of the rich world's early warnings that inequality has gone too far. Central to restoring trust is the problem of flagrant tax evasion. The biggest economies, through the G20, have embraced the OECD's policy program to address "base erosion and profit shifting", inelegantly known as BEPS, and many governments are working towards fixing their leaky tax systems, cheered on by Oxfam and others. But tax havens and tax secrecy remain one of the big parts of the problem. The EU is taking the hardest line, moving towards a blacklist of 53 tax havens. The EU proposes banning all transactions with these jurisdictions. "I don't think there's an appetite in Australia for a ban," says Mark Zirnsak of the Tax Justice Network, an international coalition of NGOs pushing for fairer and more rigorous tax systems. "Australia has been working with some of these countries for an exchange of information so they get notice of Australians holding assets there, but less so with corporations."

As for the corporate tax integrity agenda, it might surprise you to learn that Australia has been at the forefront. Tax commissioner Chris Jordan has been the leader of a tax revolution. "We were intellectually browbeaten," says Jordan, the former chairman of the NSW arm of the big accounting firm KPMG. He was appointed in 2013, the first tax commissioner recruited from the private sector. Corporations, he tells me, "brought in sophisticated advisers and they'd get a great stack of global experts to write reports for them, and they'd say, 'Who are you the tax office?' "To be frank, our top people would go though all these reports and technically under the law these cases were probably right." Jordan challenged this as "the whiteboard view of the world - it doesn't translate into what's actually happening on the street." He created a new international group, put Konza in charge, and told them to look at what was happening inside the businesses. Some of the biggest targets were the biggest companies. The big mining houses and their so-called "marketing hubs", for instance.

They were selling Australian iron ore and coal to companies in China, Japan and South Korea but booking much of the profit through "marketing hubs" that they set up in low-tax countries. So they'd pay tax in Australia on only a fraction of their sales value. "The companies were arguing that their sales forces in Australia were adding no value, arguing that sales activity in Singapore and Ireland was adding the value. The local salesmen in Australia were a bunch of robots walking the streets at the direction of someone overseas." The tax office took a new line to establish where actual sales were being negotiated. "These companies said to us, 'hang on, no one has interviewed our customers before, you can't ask for that information,'" Jordan recounts. "Yes we can." And what did the tax office find? "In reality their salesmen in Australia were doing what you expect salesmen to do - they sought deals, negotiated deals, concluded deals, and got paid bonuses at the end of the year for it." The companies' schemes were exposed as mechanisms to transfer profits out of Australia so they'd face lower tax rates. "I'm sick of being stooged," Jordan told a Senate estimates hearing last year in a speech known as his "enough is enough" moment. "We are not going to put up with it any more."

The big US tech firms were another prime target. "It struck me that these big international e-commerce companies had these really aggressive structures," he says. One dodge was to set up an offshore shelf company in a low-tax jurisdiction and make it the legal owner of key intellectual property. The company would sell its products worth billions in Australia but book the profits with the offshore shelf company in Bermuda or some other tax haven. "Billions of dollars a year would end up in a company with no employees and no operations. The intellectual arrogance of of the advisers tried to force us into a corner on technical questions." The Jordan tax office refuses to cop this. "The real world approach," it turns out, "is quite innovative internationally. It's caused a huge disruption." The tax office over the past year has issued back assessments of $4 billion to big international firms. Armed with new laws - the multinational anti-avoidance law and the diverted profits tax - and more resources from a supportive Coalition government, Jordan says the tax office has had good early success. "Virtually all the big-name companies are restructuring to comply with these laws. They are booking their sales in Australia - $6.5 billion of income previously booked in Ireland and Singapore are now being booked in Australia." Companies including Facebook and Google and Rio and BHP are acting.

The Paradise Papers are more about individuals rather than corporations stashing money in offshore tax havens. Jordan asks for patience. "People complained for four years that we weren't getting anywhere with Project Wickenby, but by the end of year five there was a billion dollars recovered and 46 people in jail. The Panama Papers were two years ago and so far we have $50 million and two criminal investigations under way." This week Treasurer Scott Morrison signalled a renewed effort to ask the Senate to pass the government's proposed corporate tax cuts. Donald Trump's proposed tax reform plan would cut the US company tax rate to 15 per cent compared with Australia's 30 per cent. Other countries are running the same race, seeking global capital investment by cutting their corporate tax rates. Among them are sensible centrists like France's President Emmanuel Macron and progressives like Canada's Justin Trudeau. And here is the tension. At the same time that governments worldwide are starting to take more seriously the need to address gross inequality, they are also proposing to cut company tax rates to attract investment and create jobs. The government frets that, with Labor and the Senate crossbench opposed, Australia will not be able to keep up with the competition and will end up with the highest company tax rate in the developed world.

Inaction is not risk free - just as James Hardie and others have moved their headquarters overseas, more could follow in pursuit of lower costs and lower taxes. Enforcing the existing tax laws, ferreting out the existing criminals and imposing a fairer tax system is a prerequisite for creating the trust needed to convince voters that the system is fair. Companies and wealthy tax dodgers have to be seen to pay their due before voters will accept that they deserve lower tax rates. Viva la revolution! Loading Peter Hartcher is the political editor Correction: The original version of this story said that CSL Ltd had moved its headquarters overseas. In fact CSL's global headquarters are in Australia; one of its subsidiary businesses, CSL Behring, has its headquarters in King of Prussia, Pennsylvania.