Comment by dredmorbius | Hacker News Reader

Comment by dredmorbius | Hacker News Reader

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It's legal because, as noted by Adam Smith: "Wealth, as Mr Hobbes says, is power."

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...

>It's legal because, as noted by Adam Smith: "Wealth, as Mr Hobbes says, is power."

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.

> There are many valid and morally acceptable reasons for doing this.

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.

An offshore location sets up it's laws to simplify the taxation and legal issues, like a nice API joining complex systems.

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.

Take David Cameron's investment fund, as that is one of the biggest news stories with regards to the Panama papers:

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.

Apparently Secretary of State John Kerry and his wife Teresa Heinz also like offshore investments.

http://dailycaller.com/2016/04/25/exclusive-kerry-heinz-fami...

May I suggest adding the condition of noting what fraction of offshore funds fall under such classification?

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