The Paradise Papers, a collection of 13.4 million finance firm documents leaked to German newspaper Süddeutsche Zeitung, revealed a number of companies and individuals possessing financial ties to offshore tax havens.
Ranging from Apple to Bono to the Queen of England to Secretary of State Rex Tillerson, these entities have used these havens to protect assets and avoid taxation.
The majority of the offshore bookkeeping divulged by the 1.4-terabyte data leak will likely turn out to be entirely legal, but these accounts may bring many instances of fraud, tax evasion and false filings to light.
The Paradise Papers, as well as their predecessor, the Panama Papers, provide evidence that tax havens should be abolished entirely to ensure the transparency of the national and global financial markets is maintained.
These offshore networks of shell companies and hidden investments can be used to bypass international sanctions, conceal questionable business ties and protect huge quantities of money from taxation.
In one example that hits close to home, Democrats requested an inquiry into the Russian business ties of Wilbur Ross, President Donald Trump’s commerce secretary.
This came after the leak showed that Ross had holdings in a shipping company, Navigator, that has “a haulage contract worth hundreds of millions of dollars” with a Russian energy company co-owned by Vladimir Putin’s son-in-law Kirill Shamalov.
According to the International Consortium of Investigative Journalists, more than a dozen other Trump advisers, cabinet members and major donors appear in the leaked data.
Over the weekend, Sen. Richard Blumenthal, D-Connecticut, tweeted that these connections are “inexcusable and intolerable,” going on to state that “Americans are owed answers on this Cabinet's troubling failure to disclose links to Russian interests.”
For the Republican Party, simultaneously attempting to overhaul the nation’s tax code and survive the fallout from Mueller’s ongoing Russian investigations, this leak comes at an obviously inopportune time.
Eighty percent of offshore wealth belongs to the top 0.1 percent richest households. By outlawing tax havens, the United States would have access to more taxable income and prevent the corruption like that apparent in Ross’ undisclosed Russian partnership.
The biggest issue with the offshore financial industry, which holds approximately $10 trillion, is that it lacks transparency, allowing aggressive tax evasion and similarly harmful business practices to continue undetected and unpunished.
The human cost of tax avoidance, says Oxfam head of inequality Ana Caistor Arendar, is that it “deprives poor countries of billions each year needed for life-saving healthcare and life-changing education.”
The globally wealthy are using these offshore tax havens to afford another yacht or a new vacation home on the French Riviera, while millions around the world remain malnourished, uneducated and thirsty.
By continuing to allow tax havens to be used, the U.S. is complicit in such economic injustice.
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