Wednesday, April 6, 2016

Panama Papers & Inversions - The Trillions in Untaxed Hidden Wealth Our Congress Allows

The "Panama Papers" has exposed a dirty secret that our U.S. Congress has known about for decades - dirty money that hides in offshore accounts in places like Panama, Cayman Islands and other tax havens known to international tax experts. 

At one point in my career, while employed by a Fortune 500 company and later as an individual international attorney, I went to Panama and the Cayman Islands and set up offshore companies. I always told clients that having an offshore account is legal, but since Americans are taxed on their worldwide income hiding money from the government that you didn't pay tax on is not. I was never sure they really listened. I would not be surprised that they used the account for tax avoidance.

The Panama papers show that over 14,000 banks were involved in setting up accounts for over 140 officials from 50 countries; people like Russia's Putin may have $2 billion hidden away; China's leaders are blocking the internet so their people won't find out.  Corrupt leaders like Gaddafi had such accounts. It has already brought down the leader of Iceland.

Eighty 80% of the money in these accounts is "dark" money - money where the source of the funds is unknown and is either criminal proceeds from the drug trade or monies looted from governments by their own leaders. Only 20% of it is reported and disclosed and that needs to change.

Our Congress has known about these offshore accounts for decades and has done almost nothing to bring international pressure to bear. These accounts amount to trillions of dollars that governments are denied, therefore causing tax increases on the middle and lower classes while the rich 1% escape taxes entirely. It allows a haven for global criminals to hide their money. It's time to stop it.

President Obama has done what he can by himself to stop inversions - where companies pretend to  set up overseas to avoid taxes in the U.S. (which killed the Pfizer merger). But he needs support.

Only Congress can repeal the tax deductions Congress passed under the Bush administration with a GOP majority that allowed companies to ship jobs overseas and get a deduction for it. Only Congress can pass laws to help reduce dark money hidden in tax havens. 

This is why governments are struggling to pay their bills and the 99% are being screwed by the uber rich who pay little or nothing in taxes since they have the cash to hire lawyers and set up elaborate shell companies to hide their identity and source of funds.

If you want change, change Congress so we can eliminate these laws protecting tax havens.  I wrote about our twisted tax rules and how to change them in "Agenda for American Greatness" at the link. Check it out and pass it on.

No comments:

Post a Comment

Comments from real people welcome. The only comment rule is "BE CIVIL." Let's discuss SOLUTIONS based on real FACTS.

Thanks for your feedback! Click "Subscribe" or "Follow" for notification of future posts. Feel free to Share with your friends.