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Panama Papers Reveal How Wealthy Americans Hid Millions Overseas
- vasilipupkin 10y agoPonsoldt family appears to be exceedingly dumb, based on this article
- matthewmcg 10y agoThe daughter's political views especially.
- kevin_thibedeau 10y ago> "It’s like propaganda that is brainwashing Americans to forget the Principles of Hard Work, Ingenuity, Risk and Boundless Success!" There's nothing more principled than offshoring daddy's money to escape the socialist claws of the IRS.
- riskable 10y agoYeah, I love how she claimed hard work is how one gets rich. She grew up exceedingly wealthy and stands to inherit an enormous fortune. Apparently it's "hard work" being born rich beyond belief.
- danieltillett 10y agoDon’t you know how hard it is to find good help these days.
- xufi 10y agoLionel Messi (the world famous soccer star) also appears on it. So does Emma Watson from the Harry Potter. I did find the list had some interesting folks I wouldn't suspect to be on it
- matt_wulfeck 10y agoFamous people are probably the least interesting to see. I wouldn't want the prying eye of the public to know everything about my assets either.
- tptacek 10y agoIt's also unlikely that they manage their own finances.
- sotojuan 10y agoWild guess but perhaps it wasn't them themselves who "hid" their money but their accountants, with or without their full knowledge.
- afarrell 10y agoEmma Watson claims that this was to shield the details of her private residence from the public due to threats against her. I don't see a reason to doubt her.
- undersuit 10y agoI'll just say that it's a pretty flimsy defense of her address... and now the address is public anyways.
- matt_wulfeck 10y agoI really believe the best way to combat tax evasion is to make the tax process easier, more efficient, and less burdensome, especially to wealthy earners. It is insane the amount of work that I put into my taxes each year, only because we have a small business and doing things right versus doing things wrong is a difference in the tens of thousands of dollars. The extraordinary amount of loopholes and special interests means you need experts. And as I've said before here, the current tax system exist in the interest and benefit of large companies, not small companies or individuals. If we instituted an overnight 9%, 9%, 9% "Simcity Tax" system and eliminated the massive tax loopholes that exist in all levels of the tax code, then I guarantee that money would come pouring back into the United States.
- deleted 10y ago[deleted]
- Negative1 10y agoNo offense to you but that is absolute and utter bullshit. The tax process being exploited has nothing to do with it being inefficient and burdensome. It is in fact that way to obfuscate the external influences that incorporated all the loopholes that very well trained attorneys that only the wealthy can afford are incentivized to take advantage of. Your 'institute my idea and it will fix everything I promise' idea has basically been why many Presidents have been elected and yet nothing has really improved. The problem is not simple but the root is; while the wealthy can influence the process of how much they pay in taxes, the system will continue to be in their favor. How do we fix that? Damned if I know.
- noobermin 10y agoHow do we fix that? Damned if I know. Public funding of elections[0]. [0] https://en.wikipedia.org/wiki/Publicly_funded_elections https://en.wikipedia.org/wiki/Publicly_funded_elections
- blastrat 10y agowait, you are proposing government control of election funding so you can change the government?... hahahahahahahahaha there are plenty of rich people on all parts of the political spectrum always trying to unseat the current government. That's probably a good thing. The idea that taking away private citizen's influence in order to swing the pendulum in any direction except more deeply entrenching the political incumbents is naive at best.
- matt_wulfeck 10y agoI haven't read through the list, but I'm guessing the bulk of the names on here aren't very exciting. Our society is so litigious that it's in your absolute best interest not to let anyone else see your cards. This is especially true if you're a doctor or famous person. I realize that this statement may be controversial, but I hope it's at least not very surprising.
- cheez 10y agoThis is pretty much the main reason a friend of mine looked into it. Once he started making money, it turned out lots of people wanted to sue him.
- rayiner 10y ago> This is especially true if you're a doctor Doctors hiding assets to insulate themselves from largely-meritorious malpractice lawsuits,[1] would be pretty interesting. [1] http://archive.sph.harvard.edu/press-releases/2006-releases/press05102006.html http://archive.sph.harvard.edu/press-releases/2006-releases/...
- ianai 10y agoHas there been any indication that any of this will lead to audits? The last interview I saw related to this was someone from the IRS. He said they're far from having reached diminishing returns on hiring more auditors vs increased tax revenue. They're simply not that interested in getting every dollar they can (paraphrasing his words). I LONG to be wrong and would like these papers to have consequences.
- 1qaz2wsx3edc 10y agoThe only thing my weak recall can summon was that the IRS was finger wagging at guilty parties to come clean early: http://www.nbcnews.com/storyline/panama-papers/irs-urges-americans-come-clean-now-we-read-panama-papers-n557246 http://www.nbcnews.com/storyline/panama-papers/irs-urges-ame...
- zrail 10y agoIRS is just a bunch of people who want to do their jobs as best they can. Congress is the entity responsible for not funding IRS. IIRC I saw some Congressional testimony from the head of IRS a few years ago effectively begging for more money, because every dollar spent on audits and enforcement returns ~$10 to the Treasury.
- darawk 10y ago40-70 billion is the estimate of tax revenue losses from this sort of thing? Does that strike anyone else as insanely low? You're telling me that the sum of all tax losses due to evasion is just equal to the net worth of our wealthiest private individuals?
- loeg 10y agoHigh voluntary compliance rates and low long-term capital gains and dividend tax rates.
- charlesdm 10y agoWhy would you bother going offshore if capital gains are taxed very low in most countries? For example, wealthy heirs can live their entire life, not paying a cent of income tax. Life is good if you can earn money by just booking capital gains. Should the capital gains tax rate be higher, i.e. 50%, I dare bet the numbers would be a lot higher. Higher rates act as an incentive to avoid.
- darawk 10y agoI think the main reason would be the estate tax. That's a huge, huge cost for inherited wealth. Maybe there is some way around that that doesn't involve offshoring, but that seems like a pretty big reason to me.
- deleted 10y ago[deleted]
- danieltillett 10y agoYes you put everything into a trust and get your “friends" in congress to pass a law getting rid of the estate tax for 6 months and have the trust “die” and then set up a new one [1]. They almost got away with it [2]. 1. https://en.wikipedia.org/wiki/Economic_Growth_and_Tax_Relief_Reconciliation_Act_of_2001#Estate_and_gift_tax_rules https://en.wikipedia.org/wiki/Economic_Growth_and_Tax_Relief... 2. https://en.wikipedia.org/wiki/Tax_Relief,_Unemployment_Insurance_Reauthorization,_and_Job_Creation_Act_of_2010 https://en.wikipedia.org/wiki/Tax_Relief,_Unemployment_Insur...
- forrestthewoods 10y agoOnly millions? That's not so bad! > officials estimate that the government loses between $40 billion and $70 billion a year in unpaid taxes on offshore holdings. I wonder how much the government loses out on per year in evasion. Not legal avoidance (Apple, Google, Microsft, etc) but illegal evasion.
- wonkaWonka 10y ago1,000 times one million is a billion, is it not? From the article: Mossack Fonseca also had at least 2,400 United States-based clients over the past decade, and set up at least 2,800 companies on their behalf in the British Virgin Islands, Panama, the Seychelles and other jurisdictions that specialize in helping hide wealth. Also: http://www.nytimes.com/2016/04/06/opinion/the-panama-papers-sprawling-web-of-corruption.html http://www.nytimes.com/2016/04/06/opinion/the-panama-papers-... > With more than 14,000 clients around the world and more than 214,000 offshore entities involved, Mossack Fonseca, the Panama-based law firm whose internal documents were exposed, piously insists it violated no laws or ethics.
- honkhonkpants 10y agoWhy don't the "nominees" of these fake account just move the funds and disappear?
- mullen 10y agoBecause they like living in the United States. That sounds really silly, but there are a number of cases of overseas tax cheats who get caught then have the opportunity to flee before the tax man gets them, but they admit their guilt and pay the fines. A lot of them simply don't want to flee the United States and go live somewhere else.
- mahyarm 10y agoIf your income comes from the USA, it better to keep that than to lose it.
- a_small_island 10y agoI think OP is referring to the employees of the law firm that are setting up these trusts
- xapata 10y agoPerhaps there are non-financial, non-judicial motivations.
- astronautjones 10y agoThe part where Mrs. Powers is rambling about the coming Obamapocalypse where he will devalue the dollar and return to the gold standard is staggeringly idiotic.
- jerryhuang100 10y agoThe IRS and DOT should start scrutinizing the foreign shell companies buying up properties in major US cities (NYC, SF, LA...), which contribute to the pushing up the real estate price. Otherwise those shell companies would still be popular among international tax evaders of ultra riches while average citizens paying the prices such as high housing costs. For some reason the quote "The chamber (of secrets) has been opened. Enemies of the heir ... beware" fro Harry Potter just came up to me.
- euske 10y agoSo, these companies are basically the Tor router of money. Recently NPR Planet Money also covered a related topic which was very entertaining. http://www.npr.org/sections/money/2016/05/27/479717380/episode-703-how-to-hide-a-million-dollars-in-plain-sight http://www.npr.org/sections/money/2016/05/27/479717380/episo...
- alexandercrohde 10y agoThe interesting thing, in my opinion, is that all large wires are tracked by our government. We'd do much better to use all of this monitoring infrastructure to stop tax-evaders instead of searching for more terrorists .
- herbst 10y agoIn a way you guys do. AFAIK the only reason U.S. people have no fully private banking accounts more in Switzerland is because the country also provides us with Secret Intelligence information about who knows what. AFAIK no other country got that deal so far, for anyone else in the world Switzerland still provides private banking accounts.
- danieltillett 10y agoIf you really want to prevent tax evasion then start taxing assets. You can’t really hide assets (excluding a few minor ones like diamonds, but these are a tiny fraction of all assets). If you tax assets like land, shares, buildings, mines, vehicles, bank accounts, gold, etc, then evasion is not possible and the useless wealthy that inherited (rather than created) the assets will start paying tax.
- stevenmays 10y agoTaxing assets will have a negative effect on the savings rate. Countries with higher savings rates are usually net exporters. And high savings rates are good because people usually need less services if they've saved.
- danieltillett 10y agoWe have interest rates at record lows and a risk of deflation. There is way too much asset holding and too little consumption. Taxing assets more (and taxing production less) will result in few people holding onto assets that could be more productively used by others people. We want to get our limited resources into the hands of the people that can make the most of the assets.
- cynicalkane 10y agoYou're commenting on an article about how easy it is to hide assets overseas, and you're telling me it's hard to hide assets?
- danieltillett 10y agoThe assets are not really overseas - just their supposed intermediate owner is. Almost all the assets are physically located in the major western countries. My suggestion is tax the assets directly. Don’t tax their owner, just have the asset itself owe the tax. For example, if you have a building and land then $x dollars in tax are due each year by the land and building. You don’t then have to worry about who owns the asset or if the ultimate owner is on or offshore. Of course proposing such a suggestion is a great way to have the shortest career in politics possible. The mega wealthy are fully aware that if this idea ever gained traction they would be history - good thing I never plan to run for office :)
- rbcgerard 10y agoI find it interesting that the general sentiment on HN seems to be that individuals should have freedom from government intrusion into their communications - but that doesn't seem to translate into the same feelings regarding their financial transactions.
- cletus 10y agoAs a non-US citizen living in the US, I'll be one of the first to criticize the US tax code, particularly for the onerous provisions it places on non-US citizens and US citizens living overseas (the latter is an honour it shares with Eretria and maybe one other country) It's also true that the US tax code makes it pretty easy fodr the rich to legally avoid taxes. A good example of this is the carried interest tax credit, staunchly defended by the senior Senator rom Wall STreet (Chuch Schumer, "Democrat"). Only when making a bid for the presidency did Clinton jump on the bandwagon of repealing it. But I have to give the US some credit here. The US is really the only one who is pursuing tax evaders. A notable example of this is pursuing Swiss banks. If you read some of the details of what these banks did, it goes way beyond avoidance and was clearly criminal behaviour that includes vague language to avoid culpability in discovery of communications, hand delivering debit cards full of cash without names and so on [1]. Some people like to criticize the US government for going after corporations for foreign income (the US being an exception in this regard). But really what's happening is companies are (ab)using transfer (mis)pricing, which in many jurisdictions is illegal. What really bothers me is it seems like this idea has set in amongst wealthy individuals that their supposed philanthropic efforts cover their debt to society and that they don't need to pay any taxes at all. This is rationalized in various ways. The government is wasteful (true; can we cancel the JSF already?). Private philanthropy is more effective than public welfare. Also true but the rich aren't being philanthropic to pay more taxes or even the same amount of tax. Honestly I think much of this "philanthropy" is thinly veiled social exclusion (you're not rubbing elbows with the unwashed masses at a dinner that's $30,000 a plate) and bragging, essentially. Taxes pay for public infrastructure. That infrastructure and the political stability its tied to is an essential element in wealth creation. Most of these wealthy people owe their wealth to the very country they now seek to short-change. As much as people like the criticize the robber barons (etc) of the 19th century (and into the 20th). The Astors, Rockefellers, Vanderbilts, Carnegies and so on. These people had their failings for sure but they also contributed, not to mention the legacy they left behind (turning the US from an agrarian backwater to an industrial superpower in the span of a century). There's so much wealth now that's simply inherited, providing next to no value to society. People usually say you become more (politically) conservative as you get older. Honestly I think I'm becoming more socialist. Here's an example: owners of apartments in NYC pay a disproportionate amount of property tax. Single family home dwellers pay a much lower rate as these are the bulk of the voters. It's not quite as bad as Prop 13 in CA but it's not far off. At the other end of the spectrum we have these super-luxury condos where a $100m condo (of which there are now several) pay taxes as if they were worth $15m. This heralds from the days of Bloomberg who argued that you can improve NYC by attracting the billionaires [2]. But honestly what does undertaxing billionaires who come here a few days a year do for the city really? Historically war and revolution have been the ultimate redistributors of wealth. There's a reason Caesar's descendants don't own half the world. I think we can all agree that we don't want that but the current trend towards hiding wealth offshores and the bankers as willing criminal accomplices has to eventually give. The roads, bridges, police forces, military and so on don't pay for themselves. [1]: http://www.ft.com/cms/s/0/2acaa1cc-d6fd-11e4-97c3-00144feab7de.html http://www.ft.com/cms/s/0/2acaa1cc-d6fd-11e4-97c3-00144feab7... [2]: http://www.nytimes.com/2015/02/08/nyregion/stream-of-foreign-wealth-flows-to-time-warner-condos.html http://www.nytimes.com/2015/02/08/nyregion/stream-of-foreign...
- coldcode 10y agoOne good way to improve taxation is to allow the IRS to modernize and streamline their ability to collect the taxes owed. Every year 100+ Billion is lost due to their inability to adequately collect taxes. Yet congress continues to kill their budget for political reasons and so they can't have enough resources to go after the politician's best buddies. Of course this would assume competence at the IRS to spend it correctly, a good question. But hamstringing the people who bring in all the revenue so you have to borrow even more is pretty dumb.
- danieltillett 10y agoYou do know this is a feature not a bug.
- jondubois 10y agoI think domestic tax policy is fine. International tax policy is a mess. Currently, every country has a tax treaty with pretty much every other country - This means that the number of unique international tax treaties is O(n^2) - So if you consider 100 countries which all have treaties with one anther, that represents maybe 10000 unique treaties (if you consider each direction as a separate treaty)... And each treaty is like 50 pages. That's a LOT of work - It is very easy to make mistakes or introduce intentional loopholes without being noticed. If we had a computer program with 1 million pages' worth of code (with no source control and a highly fragmented Q/A process) then your chance of your program being buggy is extremely high. It's baffling that governments thought that it would be better to write up n^2 unique treaties between each other instead of having a single treaty (or limited set of treaties) that applies to all (a la Kyoto Protocol or Geneva Conventions)! This is such an obviously bad idea, one has to think that it was done intentionally... Probably the result of heavy corporate lobbying. At least now some middle-class workers are able to benefit from this mess (before remote work was possible, pretty much only corporations and wealthy people could leverage this). I've heard about regular working-class people who live in Malta and work remotely for US companies and pay almost no tax - This is because of loopholes in that specific treaty. There must be loopholes all over the place. Right now the system is biased towards helping accountants make big bucks.
- known 10y agoWhat's wrong in it when Govt does the same? http://www.bloomberg.com/news/features/2016-05-30/the-untold-story-behind-saudi-arabia-s-41-year-u-s-debt-secret http://www.bloomberg.com/news/features/2016-05-30/the-untold... http://paste.ubuntu.com/16869423/ http://paste.ubuntu.com/16869423/