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For what it's worth, being featured in these documents is not in and of itself evidence of any wrongdoing. There are entirely lawful and legitimate reasons for
by UVB-76 11y ago
For what it's worth, being featured in these documents is not in and of itself evidence of any wrongdoing.
There are entirely lawful and legitimate reasons for making use of offshore company structures.
- vesinisa 11y agoYeah, hiding a conflict of interest might be illegal, but "tax planning" is by definition legal.
- VonGuard 11y agoSave for the deposit minimums in the 6 figure region....
- IkmoIkmo 11y agoI'd replace wrongdoing with illegal. If you ask me, if you're a billionaire and you're not willing to pay taxes and spend 0.0001% of your wealth on the expertise to reduce your tax bill by 99%, in legal ways that 99.99% of the rest of the population doesn't engage in, then by all means that's wrongdoing to me and I think most would be with me on that. Of course it's not necessarily illegal.
- ryanlol 11y agoWhat about non billionaires? These arrangements aren't overly expensive and are very much suitable for perfectly "ordinary" people.
- mattmanser 11y agoMy friend was/is engaged in tax evasion that HMRC have now declared as tax evasion and they'll be taking all that money for the last 5 years, thank you very much. He/she said the same thing as you are saying now. The difference between you and the billionaires is that they can afford to make an offer, a la google to the UK. You are just going to be completely screwed when they come knocking on the door.
- deleted 11y ago[deleted]
- charlesdm 11y agoThe cost isn't in setting them up. The cost is in defending the structures in court when some tax authority feels you're "cheating" the game. Tax authorities lose plenty of cases however, so as long as you didn't do anything illegal and you can afford great lawyers to see a case through, you're good.
- prawn 11y agoThat's what shits me. If it's smart, viable strategy, why not make it available by default for every citizen with a basic tax framework instead of something only available to the wealth to push further ahead?
- chriscappuccio 11y agoyearly costs can be quite high, including attorneys fees that come with regular government scrutiny
- 3pt14159 11y agoIt's an arms race. As corporate income tax receipts dry up countries change their policies. Very wealthy, naturally international companies not only have more resources to compete, they also have the ability to play hard ball and leave the country entirely (see tax inversions of pharmaceutical companies from America to Europe) bringing not just the lost corporate tax, but the income tax on salaries as well.
- crdoconnor 11y agoBecause the average citizen doesn't donate nearly enough money to politicians' campaigns.
- ig1 11y agoI think what OP meant is that there are reasons for companies to be off-shore which are totally above board. A common reason that investment funds are in off-shore tax-havens is because they have lots of international investors. If the fund was say in the US all the investors would have to file tax documents in the US even if they weren't US based, by being based in a tax haven it means investors only have to file local tax paperwork and not paperwork in a second country.
- voidpointer 11y agoIs that really true? I am not a US citizen but I have an account with a US broker. I just need to file a single form once in a while declaring my foreign tax status and that's it. This can hardly be the reason why it is absolutely necessary to have offshore holdings. (Of course, I have to pay taxes at home for any profits and there are supposed to be mechanisms that ensure I do...)
- varjag 11y agoIf you deal in volatile markets with questionable rule of the law and weak property rights (e.g. Russia or much of the Middle East), then the ownership and its transfer is often structured with offshore companies. The leak however suggests the legit offshore cases are drop in the bucket in this overall money laundering business. Kind of like with file sharing, many would argue we need it primarily to get our latest Ubuntu ISOs and other legit uses, but we all know it's a lie.
- spacemanmatt 11y agoDunno. Netflix is cheap, I've only benefitted from filesharing swarms to get Linux ISOs in the past few years.
- ig1 11y agoI believe it depends on the nature of the investment and your relationship with the US. For example I believe in your situation you'd have to pay US taxes on dividends from US companies.
- mcphage 11y ago> in legal ways that 99.99% of the rest of the population doesn't engage in This finally sounds like an industry that's ripe for disruption—Tax Loopholes For Everyone!
- SilasX 11y agoThis x1000. It's the perfect opportunity for a startup: nation/globe sized potential, something people are willing to pay for, and accomplishes a public good: eliminating the inequality in taxation and making the effects of the tax code more readily transparent. (Though if you're too successful at that they'll rework tax systems to be more sane and less vulnerable to this kind of thing, which I would count as a victory.) The opportunity will become more stark as taxes on high earners go up.
- smsm42 11y agoEliminating inequality of taxation means flat tax instead of progressive tax. That would require either substantial reduction of the government expenses or substantial raise of the taxes for low incomes. That probably won't be very popular.
- SilasX 11y agoThe problem isn't (just) different rates for different incomes; it's how people of lesser means are less capable of setting the complicated structures that can make them technically owe less money under the definition of taxable income used by the tax code. A flat tax doesn't change that.
- StreamBright 11y agoThe only "fair" tax type is VAT for humans. Buying a SUV -> You pay 10,000 USD in taxes. Buying bread -> You pay 0.01 USD in taxes. We could get rid off income tax at all and just increase the VAT to ~20 - 50% depending on the type of the product. This way it is almost impossible to cheat. Solving taxation for corporations still an issue though.
- the_watcher 11y agoThere are still reasons to use shell corporations that are entirely legitimate, and have no moral issues whatsoever.
- dangerlibrary 11y agoSince you used the plural: care to name two?
- arethuza 11y agoTo reduce amount of tax paid and to obfuscate ownership to reduce the amount of tax paid?
- kafkaesq 11y agoRight - no one ever said the Panama Files were interesting simply because they revealed the existence of overseas shell corporations. It's the revelations of undeclared assets that make the disclosures interesting.
- smsm42 11y agoRest of the population doesn't engage in these ways because it's not worth it for them - they do not pay enough taxes to warrant it. Some people, however, pay lots of taxes - so much that it may make sense for them to spend money and go to great length to somewhat reduce their tax bills. They most probably still pay much more tax than average person - just not as much as they could be paying if they didn't use these ways. And there's nothing wrong with that. You could send extra money to your state anytime too, and you probably don't - so why should they?
- fnordfnordfnord 11y agoIt's not worth it because the cost of obtaining the expertise to do it is higher than the taxes.
- pron 11y ago> it's not worth it for them - they do not pay enough taxes to warrant it Not only do they pay a larger portion of their fortune, that money makes a much bigger difference to them (us, why do I say them?) in our everyday lives. > They most probably still pay much more tax than average person They probably pay much less than what they should. They benefit from from an organized state much more than the average person.
- collyw 11y agoThis is so true, otherwise businesses would be flocking to set up in low regulation, low tax countries like Somalia.
- pron 11y agoLarger businesses disproportionately benefit from law-and-order and infrastructure.
- smsm42 11y agoI don't think it is true. Large corp can afford their own security force and infrastructure (and if you study the history of colonial corporate conquests, that's exactly what they have been doing). Small business or average consumer can afford none of this. Big corp can build their own protected bubble amid a desolated and decaying country, but if you are outside the bubble, you are in trouble.
- StreamBright 11y agoCould not agree more. Our society is based on the foundation that everybody does her/his own fair share, if the leaders of the world think it is not the way then lets just stop paying taxes and see how fast things change. One funny thing about humanity, we used to pay 1/10 of our income that was enough for the "state", I am paying 65% (that is right) of my income to the sate right now and it is not enough, I have to pay VAT on everything on the top of that so that the government can spend it the most ridiculous inefficient way on projects that are at least questionable, yet many of the politicians just avoid paying taxes through these offshore tax havens. Do they know something we should too? :)
- deleted 11y ago[deleted]
- oneeyedpigeon 11y agoWhere do you live that has a >65% top income tax rate? Because I quite like the sound of it. Or are you conflating other taxes and presenting an overall figure?
- vsl 11y agoHe isn’t “conflating”, he clearly said this is the total paid to the government — i.e. all sorts of taxes. That you like the sound of it is, frankly, horrible.
- oneeyedpigeon 11y agoIt's horrible that I like the sound of a high-ish top rate of income tax? We haven't even stated the terms of what income level that tax rate is applied at, so your finding it horrible is either a total misunderstanding, or you object to the progressive nature of variable income tax outright. I hope it's the former, because I find the latter truly objectionable.
- etherael 11y agoI find the idea of people dressing up simple theft as something other than it is, and in the ill-fitting trappings of a global social good, despite the fact that the institutions being financed by this form of theft were the largest non natural cause of death in the preceding century truly objectionable, too. Letalone moving onto a particularly egregious sort of theft involved in modern taxation rackets where the burden approaches three quarters of the total earnings of any given individual. If you're cool with this how about I extort you for 75% of your income and then use it to finance a private mercenary company that runs around the globe destroying lives and property for ill-defined "geopolitical objectives"? But I guess "I find x truly objectionable" is somewhat of a content free statement, unless we're just trying to farm moral outrage from our respective in-groups.
- d_theorist 11y ago>by all means that's wrongdoing to me and I think most would be with me on that. Well, for what it's worth, I don't agree with you. People are obliged to pay the tax they are legally obliged to pay, and that's it. It doesn't matter how rich or poor you are. Billionaires are not obliged to voluntarily pay more than they are required to. And neither is anybody else. And it really is not a coherent position to claim otherwise, in my view.
- puranjay 11y agoAs I said on Reddit, it might not be illegal, but it is proof that the system is even more lopsidedly in favor of the wealthy than we thought.
- tootie 11y agoThere's a lot of noise being made over the number of documents, but I'm not seeing anything actually interesting about this. Offshore banking has been extremely common for a very long time and isn't illegal in and of itself. The hidden funds need to be provably originating from from an illicit source.
- hendersoon 11y agoThat's where the actual journalism comes in. Also, in some cases hiding money offshore is indeed illegal. One example that immediately comes to mind is for individuals holding public office in Iceland.
- harry8 11y agoOk, I'll bite. What do you think Vlad Putin's legit source is for his billions? His paycheck? Sometimes you don't have to know all the details. Somtimes the mere fact of a bank account with billions in it is enough to know, with certainty that a politician has his/her hand in the till and is a corrupt bastard. I pick on Vlad, there's plenty more to choose from. Now the evidence exists to remove doubt from the accusation of corruption for, it would seem, a lot of politicians. Jackie Chan - Wealthy movie star. Plenty of good explanations for why he'd engage in offshore banking with his very large, legitimately gained, fortune. That's the difference.
- tootie 11y agoI'm sure Putin's cash is ill-gained but I'm extremely doubtful it will be exposed in these docs. The NY Times has a story that he straight-up murdered a guy on American soil. That probably won't stick either.
- hartpuff 11y ago> The NY Times has a story that he straight-up murdered a guy on American soil. This seemed extremely unlikely to me, so I Googled it. If you mean this story: http://www.nytimes.com/2016/04/03/us/mikhail-lesins-strange-death-in-us-follows-a-fall-from-russias-elite.html http://www.nytimes.com/2016/04/03/us/mikhail-lesins-strange-... it doesn't say anything even remotely like Putin straight-up murdered a guy (a scumbag who has spent his life associating with and/or making enemies of other scumbags) on American soil. In fact it doesn't even straight-up say he was murdered at all, by anyone: The police [in the US] continue to treat Mr. Lesin’s as a natural death and: Neither the F.B.I. nor the Justice Department has taken a role in the investigation [...] suggesting that it was being investigated as an untimely death but not a federal crime.
- kafkaesq 11y agoRight. It isn't the "offshore company structures" which are themselves illegal. Or even owning offshore assets, per se. It's owning assets you haven't declared to tax authorities that's illegal. And where does one look for evidence of these holdings? Offshore law firms. For example.