Paradise papers show high-profile tax evasion

0
1401
Photo courtesy tworiverstax.com
Ashton Nanninga
CONTRIBUTOR

“The Wolf of Wall Street,” an eccentric cinematic experience filled with corruption, schedule-one drugs and money. It highlights wealth and the true story of Jordan Belfort. It romanticizes fraud, dishonesty, bribery and greed. However, through its highlight reel of corruption, “The Wolf of Wall Street” gives us a brief glimpse into the world of money laundering – but more importantly – offshore accounts. Why is this important? Why do you care about the plot line of an over-dramatized millionaire’s biography? Because it directly relates to a topic in our current political climate: the Paradise Papers.

The Paradise Papers, as stated in a BBC article “Paradise Papers: Everything you need to know about the leak,” are “a huge leak of financial documents that throw light on the top end of the world of offshore finance.” In short, the documents released expose hundreds of politicians, celebrities, multinational corporations and even royalty about their offshore tax havens. As Sen. Bernie Sanders put it in a CNN interview, it is “Robin Hood in reverse.” It is the idea that instead of stealing from the rich and giving to the poor, the rich are stealing from the public and keeping it for themselves. The reason for the need of offshore accounts is to avoid taxes on large sums of money. Celebrities and high-profile individuals store their money in shell corporations or bank accounts in countries where the tax laws are extremely low. Some of these high-profile names include Apple, who is storing upward of $500 billion in offshore accounts according to the data leaked in the papers, the Queen of England’s private estate and one of President Donald Trump’s top administrative officials. The world’s elite have been participating in these practices, which are neither legal nor illegal.

So why is this issue so significant in today’s political climate? We have seen so many corporations and people of power be discreet with shareholders and the public about their practices. However, it is not legally required to disclose what is kept in foreign accounts. In the same interview with CNN, Sanders states, “The Paradise Papers show how these billionaires and multinational corporations get richer by hiding their wealth and profits and avoid paying their fair share of taxes.” The practice of using offshore tax havens stops the government or any private company from tracking the money, which is what happens in “The Wolf of Wall Street.” Jordan Belfort seeks monetary protection by placing his money in a Swiss bank account because the insider trading laws differ and there is no Securities and Exchange Commission. A lot goes on under the radar of the public eye allowing backchannel funding.

The scary thing is that this is just the top layer of what was leaked in the papers. The documents contained 15 terabits of data and millions of pages of taxes documents, emails, corporate forms, etc. All of this stolen by security specialists that disclosed the information to a German news company, Suddeutsche Zeitung. The information was then made public on Nov. 5, 2017. Since then, the International Consortium of Investigative Journalists have been combing through and searching the documents.

The major point of contention for all of this is that these companies and individuals face no repercussions. As mentioned earlier, this is not necessary illegal. But, how does this affect us in everyday life? This may seem like an overarching issue that we can’t touch, but that is untrue. The Paradise Papers and the offshore accounts have ties to economic inequality. Just think about the country’s tax burden and our growing deficit. This has the possibility to affect us very quickly. The government has a responsibility to keep political issues such as this in line, and they are failing on that point. The IRS will pursue someone over $500 on tax avoidance and put liens on their house, but they will allow Apple to store billions of dollars in tax havens.

Comments

comments