Have you caught news of the recent Panama Papers document leak? It would seem a large number of persons, institutions, and businesses around the world have been shielding – or hiding, depending on your perspective – assets via shell companies.
Have you caught news of the recent Panama Papers document leak? It would seem a large number of persons, institutions, and businesses around the world have been shielding – or hiding, depending on your perspective – assets via shell companies.
The list of fingers caught in the cookie jar is long and, in some cases, politically embarrassing. Names from all around the world are attached to the formation of offshore shell entities to avoid taxes, including the Prime Minister of Iceland, the PM of England, and the kin of some eight top leaders of the Chinese Communist Party.
Also implicated were a Bollywood film producer, Spanish film director, Uruguayan lawyer working as Ethics Judge for FIFA, Hollywood celebrities, and a handful of Wall Street financiers. In a troubling example of such hidden money’s usefulness, one British banker was linked to a shell arrangement that allowed North Korea to expand its weapons programs.
So there was that instance of evading international sanctions and a few cases of laundering ill-gotten monies, but for most of the very wealthy people exposed by the leak, there has been no suggestion of wrongdoing. The elaborate schemes outlined in the leaked documents mostly showed the dogged determination of rich human beings determined to hold onto their money. In the majority of cases, what they did was entirely lawful.
So why is Iceland’s PM fighting calls for his resignation? Why are Chinese authorities blocking online access to details of the Panama Papers? Why is British PM Cameron claiming a breach of his privacy? Why are others associated with the leak laying low, cancelling interviews, and issuing terse statements of “no comment”?
I’d guess it’s because they don’t want to be seen for what they are – greedy people who, despite their upper 1% of the upper 1% status – cannot seem to amass enough money and, thus, try to dodge the tax man.
Which really makes these people seem small. After all, tax codes already benefit the wealthy. Here in the U.S., how much did the well-heeled save last year by not paying taxes on capital gains? How about an estate tax that affects only those with more than $5.5 million to leave behind? How about the very top earners – say, those making $60 million and up each year – paying the same rate as a middle class taxpayer pulling down $85K per annum?
Besides, affluent tax avoiders are only doing what savvy companies do; Merck, General Motors, Time Warner, Xerox, and General Motors are some of the very profitable firms that have not had a tax bill in recent years.
Clearly the tax laws we’ve written through our legislatures are unreasonable; ultimately, they do a disservice to our fellow citizens. And we accept them, wacky as they are, even as they weaken our ability as a society to pursue common goals.
For the most part, the well-to-do folks exposed by the Panama Papers did nothing illegal. They were merely caught with their avarice showing. If negative publicity from this leak causes them some embarrassment, I imagine they’ll feel uncomfortable about it all the way to the bank.
Pat Grimes, a former South Bay resident, writes from Ypsilanti, Mich. He can be reached at pgwriter@inbox.com
