Panama Papers

[CheeseRolls]

There seems to be a lot of muddled posts about tax avoidance - perfectly legal, tax havens - been going on since taxes were imposed, and tax evasion - criminal offence.

It's not just the rich who evade taxes. Think of the tradesmen who ask for cash to avoid VAT etc.
Successive governments for decades have failed to tighten up loopholes or provide the money for the Justice system to investigate fraud. There is nothing new under the sun.

Aside from morality and justice, governments also have a responsibility to tax efficiently. One bizarre example I saw recently was Apple issuing US Bonds, when it is sitting on a 40 billion USD cash pile. The money is in the bank off shore. For Apple it is more efficient to pay interest to US bond holders than to repatriate it's own funds and pay US taxes. The yeild on the bonds is low, as lending money to Apple, given their cash balance is almost as good as lending to governments. From the point of view of the US economy though, this is money that could have been invested elsewhere and produced a tangible benefit for the US economy. After all Apple didn't need to borrow the money it already had it. I am not making any value judgement here, just pointing out the interdependencies between state and capital.

 

[beorhthelm]

Aside from morality and justice, governments also have a responsibility to tax efficiently. One bizarre example I saw recently was Apple issuing US Bonds, when it is sitting on a 40 billion USD cash pile. The money is in the bank off shore.

thats what happens with a 35% tax rate, company has no incentive to repatriate cash and pay tax.

 

[Lower West Stander]

What surprises me about this is that anyone is surprised.

When I was working in Jersey in the early 90s we had regular dealings with Mossack Fonseca and it was all regarded as above board.

Similarly I have had regular dealings with senior management over the years whose sole job was to minimise the tax bill.

Something has changed recently where it has become socially unacceptable for those who can afford to to avoid paying taxes, even when no laws are broken. I doubt anyone would have cared less of this story had broken 20 years ago

 

[KZNSeagull]

Something has changed recently where it has become socially unacceptable for those who can afford to to avoid paying taxes, even when no laws are broken. I doubt anyone would have cared less of this story had broken 20 years ago

Many things have changed in the last 20 years:

The rise of the internet and social media, meaning people can be more informed now than ever
A huge global financial crisis, the result of which is that wages have stayed flat, interest rates are extremely low meaning that you do not get much if anything for your savings. And of course - austerity.
The combination of these means that those in power are now under the microscope more than ever, they cannot say one thing and do another and get away with it anymore.

Add to that the rise of massive global corporations that suck enormous amounts of money out of an economy whilst paying little to no tax and I can see why this story could be so huge.

 

[Javeaseagull]

A wise man once said, "For evil to flourish good men need do nothing." I think I know what he means. Shrugging your shoulders and walking away doesn't change anything.

 

[NooBHA]

There is nothing new about the content of that programme. Everyone knew it went it all over the world for years hence the jokes about having Swiss Bank Accounts over the years. The only thing different was that we had some names for them to follow up on and make a programme about it.

In recent years it has bee fabulous to watch a lot of the Wealthy tax evaders squirm when Switzerland and Lichtenstein signed up to the Dual and Multi National Tax Agreement where the Governments of those counties signed up to share their Corporate and banking records with Governments around the world.

Thousands have been caught through these agreements and given that I work in that environment I am not a bit sorry to see them all gradually being caught. The rule for me is You pay the right amount of tax by virtue of the laws of the land that you reside in . Not too much and not too little.

 

[Pavilionaire]

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.

Indeed. We've seen the French and German Grand Prix disappear, to be replaced by the likes of the Bahrain and Abu Dhabi Grand Prix. I'm sure if Bernie could fit a circuit on the Cayman or Virgin Islands he'd do so.

 

[severnside gull]

A wise man once said, "For evil to flourish good men need do nothing." I think I know what he means. Shrugging your shoulders and walking away doesn't change anything.

An honourable man would resign as prime minister over a close familial link that directly opposes all he espouses to believe in.


No chance of Cameron going anywhere then!

 

[carlzeiss]

First political resignation .

http://www.independent.co.uk/news/w...-over-panama-papers-tax-haven-scandal-a696991

 

[Marty___Mcfly]

Whilst I am sure that those in the current Government love a bit of tax avoidance and have done little to try to address the issue, I'm not sure any previous government did much either.

Seem to recall Labour being in charge for a few years prior to the current chimps and it doesn't look like they locked much down either. Plus all those that came before.

Power corrupts, and once you get as far as Governing a country you are probably in it up to your neck, whether it's your own finances or those of your lobbyists.

No excusing whatever 'Dave & Co' are up to, just pointing out that they might not be much worse that anyone else who has been in that position in the past.

I still can't accept Amazon and Google paying about £5 tax per year- the whole thing is a mess.

 

[beorhthelm]

the latest is that the Panama Papers are an elborate conspiracy to discredit Putin, according to RT news. interesting situation for those that like to hold RT and Wikileaks in high esteem, which way to go?

 

[Half Time Pies]

the latest is that the Panama Papers are an elborate conspiracy to discredit Putin, according to RT news. interesting situation for those that like to hold RT and Wikileaks in high esteem, which way to go?

Well it surely doesn't really matter who leaked the information just if that information is true or not!

Having said that I am not sure that this does much damage to Putin at all. Everyone knows that he is corrupt but it seems that whatever he does its water off a ducks back to him and the Russian people.

 

[highflyer]

the latest is that the Panama Papers are an elborate conspiracy to discredit Putin, according to RT news. interesting situation for those that like to hold RT and Wikileaks in high esteem, which way to go?

I don't think many people know, yet, about the motivation of whoever put the information into the public domain. From what little I know it seems to have been an external hack rather than an internal whistleblower which could make it more likely there was a political motivation of some kind. But there is far more to this than Putin. The Chinese for example are livid and doing their best to stop their citizens from seeing what has come out. And there is much more to come yet. Certainly I do know that the group if journalists involved in analysing and presenting the information are not about any one individual. This is about shining a light on the scale and nature of the while offshore system and the harm it does. Mossack Fonseca is by no means the biggest player in the game.

 

[beorhthelm]

Well it surely doesn't really matter who leaked the information just if that information is true or not!

well that's just the point, the implication is that the information leak is being manipulated, with omissions of some and fabrications of others. what are we not being told, follow the money, who's behind the leak and who's not being named...

 

[Half Time Pies]

Russian people unfazed by Panama Papers and suspicions surrounding Putin http://www.bbc.co.uk/news/world-europe-35981663