Panama Papers

[beorhthelm]

There is very little economic advantage to money spent on yachts.

im sure the yacht building industry, as small as it may be, doesn't agree with you. what you probably dont realise or accept is that as productivity goes, its very high. it turns cheap commodity materials into very expensive items, paying a lot of people to do so along the way. more value creted, more positive economic effect. a state pension on the other hand, while very valuable to the recipients, does not add much, some would argue its a net cost. im not knocking the provision, of pension, health, education, we accept their inefficiency and determine the cost is worth it. i'm all for roads and rail and airports to be built, those are indeed some of the most productive ways to invest public money, unfortunately too many people don't want them near them, but that's another matter.

I think you have this the wrong way around. If a poor person falsely claims £100, that £100 will be spent in the local economy which necessarily creates jobs. If a rich person avoids £20m in taxes, this is likely to be invested in shares, bonds, oil, etc. to generate more income. The first produces jobs, the latter takes money out of the economy.

and what do you think the money invested in shares, bonds, oils etc go to? companies and governments to spend on investments, production of more services/goods and wages. its what the economy is, and pays for false claim many times over, though all the other taxes that are incurred along the way.

 

[vegster]

I'm sure this is just another attempted plot to smear the devoted, hard working Mr Putin. This is most unfair as Polonium dies not come cheap these days..

 

[beorhthelm]

I dint say that there isn't any economic advantage to yachts? Maybe you can't read or understand or ignore my posts...

So how about this one. Instead of the untaxed money being taxed and spent on infrastructure projects instead of getting the Chinese to pay for them, why not the taxed money being used to subsidise the amount of tax you and I pay every second? Would that not create more value back in to the wider economy?

fair play (though i did say probably not)...

the Chinese investing is some perplexion to me because we infact invest massively, just not in high profile government projects. its quite odd that while our pensions will invest in Chinese steel production or Saudi oil, they wont invest in project closer to home. as i understand there are sometime rules that send investment in this direction, i dont understand whey the rules aren't changed. why for instance cant i easily buy a bond in government backed power plant project? as far as the cost of that goes, its neutral, you'll pay roughly the same whoever is providing the capital funding, so it doesn't matter if its UK, European or Chinese funding. and technically, if the project is a high enough positive contribution back to the economy, we make more from that than we pay in the interest, so its all good. these days we need to be thankful anything gets built at all... (oops, going of on that tangent again).

i think we've rather diverged from the core of the matter, which really isn't about offshore per se (well maybe it is for some), but what some of the money and people and motives are.

 

[Half Time Pies]

it may seem like that if you cant read or ignore the previous post, where i qualify how it bothers me. id like everyone to pay all the tax owed but thats not the case, but bothers me less than people take for nothing and do nothing, for the reason given. you think there's no economic advantage to yachts? you want the entire economy controlled via government spending? probably not. it would be great if all government spending went on infrastructure and investment, unfortunately the vast majority of spending is on unfunded promises of previous generation and does not contribute positively to growth and productivity (which is not to say its not needed, just what its affect on productivity is)

When I started to consider your point about the economic productivity of yachts it reminded me of my last holiday in Dubai. We have been a regular visitor to Dubai over the past 10 years as some of our good friends live there but I could never get my head around what was driving the expansion of the city and continued building projects. For many years many properties sat empty (and probably still do) yet the building continued and property and rent prices continue to rise. After my last visit I looked in to this bit more and things clicked in to place, basically the whole place has been built on the foundation of illicit cash http://www.theguardian.com/business/2010/jan/24/dubai-crime-money-laundering-terrorism. It is a playground where criminals can lavishly spend and invest their ill gotten gains without fear of reprisal. I now find it somewhat sickening watching members of the Russian mafia parading around in Bentleys and large yachts partying with the politicians and wealthy businessman who allow them to get away with it.

 

[Smoky McPot]

Not really, was just typing in google and a couple of articles popped up about Platini and Fifa being implicated (no surprise) and this article in the Irish Times popped up.

www.irishtimes.com/business/panama-papers-how-soccer-has-become-enmeshed-in-offshore-world-1.2595555

 

[wellquickwoody]

That is totally irrelevant as the money gets recycled into the economy. I might pay the window cleaner in cash but he then goes to the pub or Tesco and spends it. Hoarding it off shore is selfish, greedy and immoral behaviour - even if it is legal, which it shouldn't be imo

No it is not irrelevant. The point was made that 'the rich trying to avoid paying tax..........what's new?' I was pointing out that it is not just the rich who try to avoid paying tax, most people will do it if given the opportunity. It is all about risk assessment, how much to be saved against likelihood of being caught, like life really in that people choose how much risk to expose themselves to.

I just get so bored of these accusations being continually levelled against one section of society when we are all human and who knows how tempting it might be to do the same if in that position. 'The rich baxxards this, the rich waxxers that, blah, blah, blah'.........the politics of envy.

 

[highflyer]

When I started to consider your point about the economic productivity of yachts it reminded me of my last holiday in Dubai. We have been a regular visitor to Dubai over the past 10 years as some of our good friends live there but I could never get my head around what was driving the expansion of the city and continued building projects. For many years many properties sat empty (and probably still do) yet the building continued and property and rent prices continue to rise. After my last visit I looked in to this bit more and things clicked in to place, basically the whole place has been built on the foundation of illicit cash http://www.theguardian.com/business/2010/jan/24/dubai-crime-money-laundering-terrorism. It is a playground where criminals can lavishly spend and invest their ill gotten gains without fear of reprisal. I now find it somewhat sickening watching members of the Russian mafia parading around in Bentleys and large yachts partying with the politicians and wealthy businessman who allow them to get away with it.

Duibai is built on dodgy money and exploited labour. Horrible place.

 

[Machiavelli]

No it is not irrelevant. The point was made that 'the rich trying to avoid paying tax..........what's new?' I was pointing out that it is not just the rich who try to avoid paying tax, most people will do it if given the opportunity. It is all about risk assessment, how much to be saved against likelihood of being caught, like life really in that people choose how much risk to expose themselves to.

I just get so bored of these accusations being continually levelled against one section of society when we are all human and who knows how tempting it might be to do the same if in that position. 'The rich baxxards this, the rich waxxers that, blah, blah, blah'.........the politics of envy.

It's got nothing to do with the politics of envy. You might want to be rich and think that there's no such thing as society but I and plenty others don't. We're not remotely envious of them, we just don't want them to carry on getting away with it

 

[wellquickwoody]

It's got nothing to do with the politics of envy. You might want to be rich and think that there's no such thing as society but I and plenty others don't. We're not remotely envious of them, we just don't want them to carry on getting away with it

I don't wish to see 'them' get away with it, if they are acting illegally let's prosecute 'them'. It's the whole 'look at the nasty rich people' boxxocks that is so pathetic.

 

[Igzilla]

For me, it's no surprise that the rich are squirrelling their wealth away to avoid tax. As other posters have argued, this may (or may not) be legal and may (or may not) generate more wealth for the common good via oil companies, capital investments etc (though it's unclear whether these infrastructure projects occur in the country where the tax was avoided). What is illuminating is the exposure of Cameron's hypocrisy by saying the family's tax avoidance is a private matter. That's not what he said about Jimmy Carr, was it?

 

[sir albion]

There's a lot more to this than the super wealthy dodging tax.
You have a lot of corrupt political leaders stashing away billions in offshore funds when it should be used towards the poor people of these countries and wouldn't be surprised to see a lot of the charitable foreign aid funds in these accounts.

 

[Machiavelli]

I don't wish to see 'them' get away with it, if they are acting illegally let's prosecute 'them'. It's the whole 'look at the nasty rich people' boxxocks that is so pathetic.

They're not acting illegally, and that's the problem. In order to change the law, which will need to be done at continental and/or regional levels and then globally, it's going to require pointing out that it's oligarchs that are benefiting from it, that oligarchs set the rules and that the arguments launched by oligarchs and their cheerleaders maintain the system.

 

[The Albion Roar]

I don't wish to see 'them' get away with it, if they are acting illegally let's prosecute 'them'. It's the whole 'look at the nasty rich people' boxxocks that is so pathetic.

Yes, we should stop criticising them. The poor little lambs must be so tired of being pointed at, as if they were committing grand theft on in international scale to the tune of billions in order to avoid their own national obligations and feather their excessive nests.

Those who avoid paying a few quid in tax merely in order to survive should be ashamed.

Meanwhile, back in the real world, that post you've put up is the most pitiable post. You honestly believe these people are above the law? Or is it you can easily equate the theft of billions with some bloke squirreling a few quid away. Your sense of perspective is a bit psychedelic, to say the least.

It's nothing to do with the politics of envy (Jesus wept - does anyone actually believe that?), and everything to do with the shift of resources away from the people most in need to the people who are happy to steal it from them - and this is something you want to stop people whining about because you think it's pathetic.

 

[highflyer]

There's a lot more to this than the super wealthy dodging tax.
You have a lot of corrupt political leaders stashing away billions in offshore funds when it should be used towards the poor people of these countries and wouldn't be surprised to see a lot of the charitable foreign aid funds in these accounts.

And a lot of UK banks and UK tax havens making it all possible.

 

[highflyer]

They're not acting illegally, and that's the problem. In order to change the law, which will need to be done at continental and/or regional levels and then globally, it's going to require pointing out that it's oligarchs that are benefiting from it, that oligarchs set the rules and that the arguments launched by oligarchs and their cheerleaders maintain the system.

The whole 'not doing anything illegal' stuff is for the lawyers. Panama is dirty as f*ck. Setting up a shell company through Panama and saying you are only there for legitimate business reasons is like being caught in a brothel and saying you were only in there for a drink. It might be true. But it doesn't look good.

 

[Machiavelli]

The whole 'not doing anything illegal' stuff is for the lawyers. Panama is dirty as f*ck. Setting up a shell company through Panama and saying you are only there for legitimate business reasons is like being caught in a brothel and saying you were only in there for a drink. It might be true. But it doesn't look good.

So you agree with me that it's not illegal, and presumably that this is a problem. I agree with you that it doesn't look good but, then again, how things look is usually dictated by the oligarchs who own the media and prefer to focus on football, tits, celebrities, and so on.

 

[Half Time Pies]

So you agree with me that it's not illegal, and presumably that this is a problem. I agree with you that it doesn't look good but, then again, how things look is usually dictated by the oligarchs who own the media and prefer to focus on football, tits, celebrities, and so on.

Where did it come in to it that none of this is illegal? According to the leak we are talking about a global network of lawyers, accountants and bankers setting up anonymous companies, trusts and paper entities to create complex structures that shield what is actually going on. In one case they saw $200 million in cash traverse 3 countries, 2 banks and 4 companies in 24 hours making it all but untraceable. Because of this its very difficult to easily see whats going on but you can guarantee that there is a lot more here than just common tax avoidance.

 

[highflyer]

So you agree with me that it's not illegal, and presumably that this is a problem. I agree with you that it doesn't look good but, then again, how things look is usually dictated by the oligarchs who own the media and prefer to focus on football, tits, celebrities, and so on.

No I am saying it is likely to be mostly illegal (if it wasn't you probably wouldn't be in Panama). But it is very difficult (even with the leaked documents) to be 100% sure and so far nothing has been tested in court (and a lot will never be if the Swissleaks experience is anything to go by) so no journalist is going to claim illegality yet. Especially with Putin lurking in the background. A lot of what gets defined as 'avoidance' may well be illegal but is either never challenged and tested in court or is settled before a legal verdict is reached. So, the idea that tax avoidance is somehow 'entirely legal' is very simplistic. It's all pretty murky, but Panama is in a different league if murkiness as far as I understand.

 

[Machiavelli]

I've got no problem with the two last posts, and will only say that the language has got a whole lot murkier as more has come to public attention: we now have 'aggressive tax avoidance' to join evasion and avoidance and, no doubt, plenty more terms.

 

[CheeseRolls]

fair play (though i did say probably not)...

the Chinese investing is some perplexion to me because we infact invest massively, just not in high profile government projects. its quite odd that while our pensions will invest in Chinese steel production or Saudi oil, they wont invest in project closer to home. as i understand there are sometime rules that send investment in this direction, i dont understand whey the rules aren't changed. why for instance cant i easily buy a bond in government backed power plant project? as far as the cost of that goes, its neutral, you'll pay roughly the same whoever is providing the capital funding, so it doesn't matter if its UK, European or Chinese funding. and technically, if the project is a high enough positive contribution back to the economy, we make more from that than we pay in the interest, so its all good. these days we need to be thankful anything gets built at all... (oops, going of on that tangent again).

i think we've rather diverged from the core of the matter, which really isn't about offshore per se (well maybe it is for some), but what some of the money and people and motives are.

You really do have the most garbled grasp of economics. This is not about investment, but about hoarding wealth. If an individual buys a gold bar and its value increases 20% in one year, this is a good return for the investor, but the broader economic impact is negligible. If the same money is spent on milk the investor does not get a return, but the benefit to the economy is tangible. The shop owner takes the cash, pays the shop staff and the wholesaler, who pays the farmer. This money ripples through the economy. Every pound is spent multiple times.

If you give a large number of "undeserving" people a small amount of money they will very quickly spend it. The problem with your super rich yacht analogy is that even the most hedonistic only buy so many yachts private jets etc. If they spent all their money as efficiently as the undeserving poor they would no longer be super rich.