Panama Papers affair widens as database goes online
bbc.com
bbc.com
I feel bad for the celebrities and sports stars. In all likelihood, most of them probably have no idea that their money is in a tax haven. Some of them probably do, but most of them probably outsourced their money management.
The politicians I'm thinking probably had an idea of what was going on with their money, but maybe they outsource just as much.
I'm just saying a lot of the people in this database are probably just rich people who made a bad (or good depending on your point of view) choice in accountant.
The prevailing media narrative thus far has focused on the scandal of what is legal and allowed in this system. What is allowed is indeed scandalous and must be changed. But we must not lose sight of another important fact: the law firm, its founders, and employees actually did knowingly violate myriad laws worldwide, repeatedly. Publicly they plead ignorance, but the documents show detailed knowledge and deliberate wrongdoing. At the very least we already know that Mossack personally perjured himself before a federal court in Nevada, and we also know that his information technology staff attempted to cover up the underlying lies. They should all be prosecuted accordingly with no special treatment.
https://panamapapers.icij.org/20160506-john-doe-statement.ht...
You don't think they check all the grocery shopping lists from the cook or tell the cleaners which products to use? No, they trust the professionals to be experts at what they do.
It's more like if you chef or cleaner comes to you and ask you to sign an import declaration for endangered species or waste dumping liability waver. You can say "I thought this was normal" but you can't say "I didn't know this was going on" (well, you can but it won't have much standing as such).
The most common reason people want those privacy laws is tax mitigation, but for certain people, celebrities and sports stars especially, the privacy could be the entire motivation.
0: https://en.wikipedia.org/wiki/Jimmy_Carr#2012_tax_avoidance_...
> British Prime Minister David Cameron commented on the issue: "People work hard, they pay their taxes, they save up to go to one of his shows. They buy the tickets. He is taking the money from those tickets and he, as far as I can see, is putting all of that into some very dodgy tax avoiding schemes
And now
> David Cameron admits he profited from father's Panama offshore trust [0]
[0] http://www.theguardian.com/news/2016/apr/07/david-cameron-ad...
The Carr scheme on the other hand, which involved the vehicle making loans to investors to offset their gains and thus reduce tax liability was described by hmrc as being at the very aggressive end of avoidance.
Cameron was not avoiding or reducing tax liability, Carr was.
Citation for the trust avoiding UK tax - http://www.theguardian.com/news/2016/apr/04/panama-papers-da...
Citation for David Cameron having received financial benefit from that trust http://www.theguardian.com/news/2016/apr/07/david-cameron-ad...
Inheriting money from your Dad, who may have been avoiding tax, is a whole different matter.
They're just ethically in totally different leagues.
I'd agree however that it wasn't David Cameron who had serious ethical issues there but his father who setup a trust designed explicitly to avoid tax, shopped jurisdictions to lower the tax and placed local people in nominal roles to make it seem that it was controlled locally when it was not.
David Cameron hasn't been so keen to tar his father with the same brush as people like Jimmy Carr.
"Prime Minister David Cameron on Wednesday called Mr Carr's use of the scheme "morally wrong"."
I don't see him saying the same about his father...
The entertainer that makes his living selling laughter and levity can make more mistakes--many more--before triggering my disdain. I am simply far more willing to be critical of the use of tax loopholes by the class that creates them, than by anyone else using them as part of an effort to crash the gates of that class.
Carr knew it was dodgy, had to rationalize it to himself, and apologized. Still completely legal. Cameron's dad blithely accepted it as the right of his class, and never even felt the need to justify it to anyone. Still completely legal. But it was the same darned thing, sheltering accounts in the channel islands. It's just that British society expects upper-class twits to crap on the public good, and it expects everyone who starts lower and moves up a rank in income to always pay a little bit back to the ones left behind.
It's certainly a dishonest thing to do, but you've got to fix the laws; a moderately popular comedian is very far from the biggest offender.
If the tax law is written unsatisfyingly, try to fix the tax law. Don't claim immorality on the part of those who are working within it.
Or colloquially, don't hate the player, hate the game.
Why not do both? Especially to the extent that the actor being criticized is undertaking an immoral action which is insufficiently disincentivized by the tax law?
You are required to follow the law You are not required to follow ethics, though it is generally advisable
That's a quite unwise ad hominem argument.
> Don't claim immorality on the part of those who are working within it.
Let's simplify things a little bit.
You decide to share a flat and the rent with a friend, but despite you are friends you make a contract anyway (because, say, you legally have to).
A little detail: for technical reasons you don't split the rent 50/50 and you don't know its exact total amount. All you know is how much you contribute.
Next, you discover that your friend uses a loophole in the contract to pay less than his/her share. To your dismay, there is no doubt that it was a deliberate "exploit".
Is he/she still your friend?
I would argue that accusations of immorality is also ad hominem.
Informal relationships between friends like the one you describe have direct feedback mechanisms if you take actions that you believe to be unfair towards each other. Because we both respect each other, we're very unlikely to do something that would be considered untowards to each other because we both value and wish to continue the relationship. We can choose to or not to choose to bring law into this situation, but intent is more important in this relationship because it is a close relationship.
In the tax law situation, it's more of a social contract. Social contracts are between individuals who have no direct relationship with each other. The way we describe these social contracts is via codified law. It's very difficult to interpret intent from law, and then turn that intent into action or inaction. And those who are part of the social contract should not have to. My primary issue with assertions of immorality is that it's unquantified and completely subjective. Your tax haven is somebody else's foreign investment. You're imposing your own subjective view of intent on it.
If you want to change the social contract, then please do so with trying to change the laws. It requires you to start from first principles and makes you examine what your actual intentions are (Increase tax revenue? Reduce income inequality? Discourage foreign investment in favor of domestic investment?) and also what the possible negative externalities are (capital flight? reduced GDP? etc.). But by making assertions of immorality or "evil"ness on the part of perceived bad actors, you're not offering any solutions, and instead starting the conversation from a place where no progress can be made.
> My primary issue with assertions of immorality is that it's unquantified and completely subjective.
Who talks like a software developer now? ;-) It is more or less as you say, though. But I believe it's better to let people judge for themselves. The same way people do make their own judgement about whether or not it's ethical for company X to outsource its production in country Y where working conditions are known to be terrible.
> But by making assertions of immorality or "evil"ness on the part of perceived bad actors, you're not offering any solutions, and instead starting the conversation from a place where no progress can be made.
On the contrary, it is one step further than "let's fix the taxation law" hand-waving. It also goes deeper than just law and economy technicalities.
It lead some countries to enforce more transparency with regards to the income of their MPs, for instance. It makes legal tax avoidance tricks and various forms of "soft corruption" a little more difficult.
Its only ad hominem if the argument is made that someone's argument on one point should be disregarded because of their allegedly immoral action. Otherwise, its not ad hominem. (Ad hominem isn't saying someone is a bad person, its saying that their argument should be rejected because they are a bad person.)
You're right though in that I could have made the same argument without singling out the users of this particular website.
Although honestly, what are you doing signing such a dubious contract, even with your friend? If I saw something like that, I'd at least query it, at which point we've probably established a verbal contract for an even share.
If you reduce your tax burden from 30% to 20% using legal avoidance loopholes, and you think that one's moral obligation to support the community ought to be around 10%, that's still another 10% worth of loopholes to find before you'll ever feel like picking up litter at the local park.
Went out the window in the age of moral relativism.
You could also say "they probably knew about it" and you would be just as correct. But either way, it's their money, so they should have known about it.
It's the same here, they trusted the lawyers to do a good job.
I mean, I only recited what I heard from a professor of law and legal history, but I am sure that as a random person on the INTERNET as yourself has more validity. That extraordinary evidence you provided is all I needed.
What you instead should ask yourself is if you are okay with people paying less tax then they would if the tax agency had all the information and resources to find out the truth.
Also, there is no way an acct will go out of his way for no return, they were likely hiring them for promises of super great deals, kinda like Madoff's investors.
Tax laws are so complex that we don't know if some tax avoidance schemes are legal or not. The accountants selling them claim they are legal. The tax authorities sometimes claim they're not legal.
Ideally they'd go to court and get a ruling, but that's expensive and regulators tend to avoid court if possible (at least, in England they do) and so we have "agreements" where a scheme is deemed abusive and some amount of tax is repaid.
There's no prosecution; no sentences; no convictions. These repayments are not fines. So it's hard to call that illegal.
That's the wrong way to phrase it. If you don't know if actions are legal or not, you are simply not living under the rule of law.
There is no law, if you cannot reasonably figure out what the law is.
That's not to say that the ambiguities may not still be problematic, but they don't make the whole structure into "non-law".
That's why it is hard to judge morality -- because it is based in opinion, not fact.
So we have to be specific about which ways of "avoiding taxation" are wrong and which ways are not morally wrong. As far as I know, we call that "tax law".
deducting tuition is filing honestly. investing funds into a corporate entity and then having that entity issue you a loan, though legal, is immoral. it's hoarding funds at the expense of the community.
im not saying that people should or shouldnt pay taxes on X or Y income, or that our current tax system is perfect, but i dont think the moral line here is as hard to draw as you're trying to make it
"though legal, is immoral"
There is the problem... the law is an expression of what is acceptable. If we start saying "though legal, immoral", then things become far too discretionary.
Instead of something obvious, like tuition, let's say I deduct donations to a registered charity that gets accused of financing terrorism. Should I be prosecuted for avoiding tax in a legal though immoral way? Some people would say giving all one's money to a church, and deducting those donations, is an immoral avoidance of tax.
All we have to go on is the expression of the community's moral taste through the law.
You keep trying to equate tax exemption with tax avoidance, and you're still wrong for doing so.
A Church is a community organization, and is exclusively community-funded. Asking not to be taxed on income donated to any community focused org is reasonable in anyone's eyes. I don't think anyone is going to worry about taxation if the org you donate to goes on to fund a terrorist attack or organization.
There is a difference between requesting exemption from taxation on income that is donated to community orgs, because ultimately that money goes back to the community, whether through taxation or philanthropy.
Creating a shell corporation in the Cayman Islands, with an anonymous board of directors based in Switzerland, and dumping all of your liquid assets into said fund, which then purchases all of your non-liquid assets, is clearly tax evasion.
What you seem to fail to comprehend is where the money ends up and why. Whether money is taxed or donated, it goes back to the community, where everyone should give a portion of their income to. Hiding it, legally or illegally, to keep that money for yourself, is immoral and will hopefully be made illegal.
Related Washington Post investigation: https://www.washingtonpost.com/investigations/panama-papers-...
ICIJ releases database revealing thousands of secret offshore companies
Searchable database displays more than 300,000 entities from the Panama Papers and Offshore Leaks investigations
https://panamapapers.icij.org/blog/20160509-offshore-databas...
I spent hours browsing their results, and still have many more pages to go. Thank you very much for that, I was so bored and now I have something to spend my time with, I feel much better now!
Corruption is when you use your position or influence in the government to help yourself. (Often by helping someone else who then gives you kickbacks somehow.)
The rich write the laws. In many cases here, the rich are the law.
And as John Doe (the Panama Papers leaker) wrote in his manifesto this weekend:
The prevailing media narrative thus far has focused on the scandal of what is legal and allowed in this system. What is allowed is indeed scandalous and must be changed. But we must not lose sight of another important fact: the law firm, its founders, and employees actually did knowingly violate myriad laws worldwide, repeatedly. Publicly they plead ignorance, but the documents show detailed knowledge and deliberate wrongdoing. At the very least we already know that Mossack personally perjured himself before a federal court in Nevada, and we also know that his information technology staff attempted to cover up the underlying lies. They should all be prosecuted accordingly with no special treatment.
https://panamapapers.icij.org/20160506-john-doe-statement.ht...
No.
It's legal because it's a reasonable and morally acceptable thing to do. You put money in an offshore account, then pay tax in your home country. No moral or legal problems there. There are many valid and morally acceptable reasons for doing this.
The problem is when people don't pay the taxes in their home country.
In order for all of us to stay focused on Panama leaks, can you please specify just the most common reasons for putting money in Panama? If you don't know which most common reasons are, then please at least those which you'd believe were most common, among "many"? Thanks in advance.
Funds are set up in offshore locations to cut the "gordian knots" of tax and securities laws, within a stable country that has skilled legal and administrative infrastructure.
Taxation and securities laws for direct investment between different countries/states are complex, often unfair, and can change unpredictably.
The fund also needs to avoid getting taxed unfairly and other liabilities. For example countries have laws that would tax the whole fund if one citizen is a minor investor (which is why a fund in say Delaware might only accept foreign investors). Dual citizenship is another hideous complexity.
Some locations or funds allow countries to "look into" investments by their citizens and corporates, so are not necessarily secret at the government level.
https://news.ycombinator.com/item?id=11474555
The reason for using an offshore vehicle is because investors came from different countries, so it wouldn't make sense to set up in a high-tax regime.
http://dailycaller.com/2016/04/25/exclusive-kerry-heinz-fami...
It may or not be legal, I'm pretty sure a lot of the people in the list are using for Tax Evasion.
Nope. The majority of the information contained in the Panama Papers does not pertain to any illegal activity[0] (tax evasion is illegal).
And even of the information that provides evidence of illegal activity, most of it is illegal for reasons that have nothing to do with taxation. Some of the information does point to transactions that were otherwise illegal (such as drug cartel money), but that is in the minority of the information leaked.
Using offshore tax havens isn't illegal in se. And in fact, most uses of offshore tax havens aren't going to be illegal, because if you're going to do something illegal (tax evasion), why bother to use an offshore tax haven? The whole point of using an offshore tax haven is to to reduce tax liability through legal means[1].
[0] https://en.wikipedia.org/wiki/Panama_Papers#Disclosures
[1] Not to be confused with the goal of using hard-to-trace offshore bank accounts to (e.g.) launder drug money or money obtained through bribery, which is illegal but has nothing to do with taxes.
It is legal - waffling about like it's up for debate doesn't change the fact. It's 100% legal, full stop.
> I'm pretty sure a lot of the people in the list are using for Tax Evasion.
Based on what evidence, exactly?
Do you have any evidence to back up that 99.9% statistic? Even many of the public disclosures haven't been illegal (for example David Cameron's investment fund was 100% legal and he paid all the UK taxes required).
https://gist.github.com/nicolewhite/f1980f01dc4342b369a6b3b6...
The data, part of the Panama Papers investigation, is the largest ever release of information about offshore companies and the people behind them. This includes, when available, the names of the real owners of those opaque structures.
The database also displays information about more than 100,000 additional offshore entities ICIJ had already disclosed in its 2013 Offshore Leaks investigation.
https://panamapapers.icij.org/blog/20160509-offshore-databas...
This database contains data from the Panama Papers and from what the ICIJ is calling the "Offshore Leaks", which is a conglomeration of the Offshore Secrets and other smaller leaks between then and now.
"The International Consortium of Investigative Journalists publishes today a searchable database that strips away the secrecy of nearly 214,000 offshore entities created in 21 jurisdictions, from Nevada to Hong Kong and the British Virgin Islands.
The data, part of the Panama Papers investigation, is the largest ever release of information about offshore companies and the people behind them. This includes, when available, the names of the real owners of those opaque structures.
The database also displays information about more than 100,000 additional offshore entities ICIJ had already disclosed in its 2013 Offshore Leaks investigation."
https://panamapapers.icij.org/blog/20160509-offshore-databas...
So, we get a lot of heat and noise about middling wealthy people who used a second tier firm to bank monies. Because said firm dropped a lot of documents on the floor, perhaps when their arm was accidentally jogged ...
It might even send the message that some people outside the right circles, hired help and social climbers, should be careful when aping their betters, because they may find their nuts caught in a vise.
(The second most salient feature is how the press is enthusiastic and cooperative about this, when they studiously ignored similar items in the past. Wonderful.)