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Panama Papers: Mossack Fonseca was unable to identify company owners
- bcheung 8y agoPrivacy should be considered a right. Just because someone wants privacy doesn't make them guilty of money laundering. When there is a reasonable expectation of foul play, subpoenas are the appropriate route. A lot of damage can be done by exposing people's financials. They become targets to predatory litigation and other forms of crime.
- everdev 8y agoIt sounds like tax evasion was a motivating factor in needing the privacy. > Other correspondence points to the primary reasons many clients were using offshore structures. > One Uruguayan financial planner commented: "…the main purpose of this type of structure has been broken: confidentiality". > Another intermediary wrote: "… the names of our customers have been known by the authorities of their countries. Thanks to Mossack, customers have to pay incomes taxes."
- jackvalentine 8y agoI agree with you for the most part about privacy. But I want to balance that right to privacy against the additional 'powers' you get when using a company to conduct business. We imbue companies with a lot of benefits depending on their form like limited liability, different taxation arrangements and we should be able to identify the principals of those companies publicly.
- losteric 8y agoPrivacy is a right. Hiding behind corporations is not a right, otherwise the implication is the right deserve more rights than the rest of us. Anything that enables tax evasion, subversive campaign influence, or otherwise inhibiting the general public's fundamental rights should be banned.
- deleted 8y ago[deleted]
- losteric 8y agowhoops: otherwise the implication is the rich deserve more rights than the rest of us.
- Steve44 8y ago> Anything that enables tax evasion .... should be banned Do you know the difference between evasion and avoidance? Tax evasion already is illegal. Paying your car mechanic in cash and it not going through the books is evasion and is illegal. Tax avoidance is not. When you used to buy the under £15 DVDs from Jersey you were avoiding paying the VAT you should have been but was perfectly legal.
- ebikelaw 8y agoPrivacy is for things you do in private. Forming a corporation is necessarily public because a corporation is a creation of the state, and therefore everyone's business.
- bcheung 8y agoWhy is it everyone's business? Nevada, Wyoming, Delaware, and New Mexico are states and they all have varying degrees of privacy options for corporations by design. Only public companies should be required to be public IMO. So would you also say that self-employed people shouldn't have the same rights as employed people? Unless everyone should have all their financial and employment records public then this is a double standard. I don't think employees would be too happy if everyone can see where they worked, for how long, and how much they made at every job.
- vidarh 8y agoSelf-employed people by definition are not working for a corporation. If they worked for a corporation, they would be employees, even if they also were the sole owner of that corporation, as the corporation is a separate legal person.
- bcheung 8y agoMany self-employed people use corporations as their chosen entity structure.
- vidarh 8y agoThen they're not self-employed. They're employed by their corporation. They may be "self-employed" in a social sense, but they'd not legally be considered self-employed in any jurisdiction where I know how it works. E.g. I used a limited company in the UK to employ myself. For the purposes of everything relevant, I'm an employee of that company, as well as a director, and the sole owner, and the relevant records are publicly available because I chose to form a corporation. Socially I might have been "self employed" but legally I'd explicitly chosen not to be because the benefits I got from that outweigh the downsides. If I didn't want to reveal that information, I had the choice to operate as a sole proprietor without forming a company.
- vidarh 8y agoCorporations are a collective fiction. They're entities that only exists because society agrees that they exist because they are generally considered beneficial. But they do not have an existence absent a legal system imbuing them with rights and responsibilities. As such, society sets the rules, and those rules are a trade-off between the substantial powers that comes from the various features available, such as creating a corporate veil, maintaining an existence independent of its owners, or limiting liability, and the responsibilities we expect them to comply with partly to reign in those powers, partly to protect owners from each other, and transparency is an important part of both most places in the world. If you don't want your personal financials exposed that way, then don't use a corporation for them. Their purpose is not to shield your personal finances. If your jurisdiction does not provide adequate privacy protections for individuals then that is a separate problem - for corporations the lack of privacy most places is an intentional feature.
- golergka 8y ago> because they are generally considered beneficial Thanks, but no. I don't want to live in a society that's ruled according to other people's ideas of what benifits them and find this idea completely immoral and alien. As a person, I want to be able to do whatever I very damn please, benificial or no, as long as it doesn't infringe other person's freedom.
- jasonvorhe 8y agoThat's not how the world works, sorry to break it to you.
- golergka 8y agoHow world works is neither static nor universal. There are political forces acting out of utilitirian ethics, trying to benifit the whole society - but thankfully, there are also forces fighting against it, and very successfully, at times.
- vidarh 8y agoThe very point of a corporation is that it is a legal fiction that society agrees to honour. Without negotiating those terms, why should society as a whole honour it if you decide to invent new rules and apply them to your new fictional entity to shield you from liability for example? What you are suggesting does infringe on other persons freedoms in that your unilateral corporation only has meaning if you force others to act as if it exists. Put another way: If I decide I'm King of my own kingdom, and insists that as king I can dismiss any debt I incur, why should society accept my fantasy to the detriment of other members of society? If I insist that I can incorporate some new class of corporation not subject to the rules of society, I'm no different than a madman proclaiming his own fictional kingdom - it has no real existence unless I negotiate that existence and the rules governing it with society around me (one such alternative might be to simply accept one of the existing forms of business).
- Taniwha 8y agoThe fiction that a company is a person is a strange American idea that is not true elsewhere in the world
- vidarh 8y agoMost countries have laws that treats certain types of companies as a legal person in most respects. How far it extends varies, but it's certainly not unusual for companies to have extensive rights. The very name "corporation" hints at this (from lating "corpus"), and the idea of a corporation predates the existence of the US by more than a millennium.
- deleted 8y ago[deleted]
- deltateam 8y agoAll of the Panama Papers stuff is a Level 1 clickbait. It is dead simple to obfuscate the beneficial owners in almost every jurisdiction, including the high-tax-unbalanced-budget countries that are complaining about the the service provider jurisdictions. Geopolitical competition - and in some cases imperial guilt - is what keeps any of this from changing.
- BLKNSLVR 8y agoThe only way I can understand how widespread this is, is that a majority of the powerful string-pullers in the world are participating in the scam. If a company has an international ownership structure that's complex enough that makes it difficult or impossible to follow the trail of ownership / leadership / directorship, then the company shouldn't be allowed to operate. All the fuss and bluster in various countries about multi-nationals dodging their local tax responsibilities, and yet this is allowed to go on. There were a couple of such companies that have Australian Government contracts that were revealed to have opaque international ownership. In the current environment of growing suspicion about foreign ownership and its relationship to national security, you'd think these issues would be a priority. How do you curtail foreign ownership and Chinese / Russian influence if you can't work out who's ultimately responsible? Maybe that's just talk to distract us non-string-pullers?
- Iv 8y agoI found it pretty illuminating, in another leak, the Paradise papers, to see that the Queen of England, who is also the head of the state in Bermuda, where this leaked came from, had huge investments in off-shore companies: https://www.telegraph.co.uk/news/2017/11/05/paradise-papers-queen-bono-kept-money-offshore-funds-leaked/ https://www.telegraph.co.uk/news/2017/11/05/paradise-papers-... It is no secret that Juncker, the head of the European Commission, was the leader of Luxembourg when it established itself as a tax haven power house, and blocked any serious EU reform to curb tax evasion. The various leaders of the world are the first to use these services. Theses funds allow them to finance campaigns, bribe officials, and maintain the statu quo. Of course they use political power to maintain this situation. I don't often say nice things about GWB's administration but one thing that came out of their terrorist paranoia was that they managed to basically kill the tax haven status of Switzerland, where some funds transited. But it took all the weight of the USA while it was in berserk mode to shut down such a thing. There is dozen more to go.
- wahern 8y ago> I don't often say nice things about GWB's administration but one thing that came out of their terrorist paranoia was that they managed to basically kill the tax haven status of Switzerland That seems like it could have been a counter-productive strategy. Better that your enemies use a well-understood banking system with [theoretically] reliable and consistent bookkeeping than for those transactions to shift to a more disperse, more chaotic international system. Even if Swiss accounts were nominally secret, AFAIU the CIA and NSA had developed a fairly reliable system for snooping around. There's a reason New York and London continue to be world leaders in processing financial transactions--the governments have been intentionally tolerant of shady characters, shady businesses, and shady nations as long as the transactions nominally followed the law. Among other benefits, that puts you in a good position to keep track of the bad guys and, when it really counts, to take them down. If you police too heavily all that activity goes somewhere else. But it does leave you open to accusations of aiding & abetting bad behavior. There's a limit to what can be politically and legally tolerated in New York and London. But you can structure the international system to channel those intolerable transactions to the least worse alternatives. Like so much with the War on Terror, the better approach would be to improve HUMINT and investigatory resources, rather than pushing the activity further underground and playing a game of whack-a-mole.
- qaq 8y agoIf you want to know the beneficiaries you want to look at banks. Due to all the pressures from US pretty much all banks require to know the end beneficiary regardless of company structure and "appropriate" authorities in US generally have access to this info.
- jonhendry18 8y agoThat's the idea but in practice there are still gaps.
- qaq 8y agoHonestly I don't think there are
- mrleiter 8y agoI didn't understand for quite some time why prosecutors couldn't go after and find tax perpetrators who they knew had offshore structures. Until I finally found out how simple it is. One of two or both reasons: 1)As laid out in this article by the BBC, there simply is no record of the true beneficial owner. 2)The jurisdictions have no legal agreements with western countries to hand over their records. Example: Person A in western country X has an offshore structure going through countries Y and Z, both of which have no legal agreement with country X. Now through some leaks and witnesses, prosecutors in country X know that person A is hiding something in Y and Z, but they cannot prove it. They cannot obtain those records legally, if there even are any. That's what must be tackled.
- kisstheblade 8y agoHow does the "beneficial owner" benefit from the ownership if he can't prove he's the owner? How do they get their money out? And can't we tax them at this point? Yes I understand these are difficult schemes but can't you just freeze accounts you don't know who the owner is and see who comes out of the woodwork. Just freeze all accounts until paperwork X is signed, problem solved?
- mrleiter 8y agoUsually through trustees and fiduciaries in yet again different jurisdictions. Until you prove beyond a reasonable doubt who the beneficial owner is, it's really legally ambiguous to enforce any laws or regulations. There are efforts aiming at this [1], but it will take time. [1] http://www.oecd.org/tax/automatic-exchange/ http://www.oecd.org/tax/automatic-exchange/
- merinowool 8y agoIf taxes were not set too high and states didnt abuse their power, people wouldn't have to resort to such tools.
- lolc 8y agoThere will always be cheaters. In this case, rich cheaters. The people "resorting" to Fonseca were the privileged. They must not get any clemency in their transgressions. I'm happy to see there's at least some fallout from all of this. I expected less.
- merinowool 8y agoIn many countries normal people are getting shafted by progressive tax system, that promotes being poor and they are tired of having their money being spent on people that don't contribute due to their laziness. It is hardly being privileged. Fix unfair tax system and people will not _have_ to use such services.
- lentil_soup 8y ago"people that don't contribute due to their laziness" Care to explain what you mean by this?
- ionised 8y agoHe sounds like he's just regurgitating sound bites.
- merinowool 8y agoPeople who feel they are better off welfare payments than work.
- cascom 8y ago100% - except what’s extremely frustrating is the [willful] ignorance of the press in reporting on the issue. There are some people in these documents that should be named shamed (and probabaly prosecuted) but most of the “celebrity” clients seem to be undertaking perfectly legal/normal tax planning activities. E.g. just about every U.S. university invests their endowments through offshore vehicles, and are not doing anything remotely seedy
- pjc50 8y agoThis kind of thing is making me think that more effort should be made for realistic land/property taxation; not only is that where a lot of the wealth ends up being kept, but it's fundamentally impossible to hide. It needs proper cadastral property registration and a link to the tax system. It can even be privacy-preserving; the system doesn't need to care who owns the land, just that the taxes are paid. For the UK I'd happily swap out council tax + stamp duty for a 1-2% annual property tax.
- arethuza 8y agoThat might be pretty interesting for ownership of the big sporting estates in the Highlands.
- soVeryTired 8y agoI think the point is to tax land value, not land. You can buy well over ten thousand acres of land in the highlands for about $5,500,000 (i.e. the price of a really nice house in London) [0]. It's an enormous amount of land, but you can't really do very much with it so the value is relatively low. [0] https://www.galbraithgroup.com/property/per170030-glenlochay-killin-perthshire-fk21-8ub https://www.galbraithgroup.com/property/per170030-glenlochay...
- cascom 8y agoYou might have to rethink your math, here in the U.S. property taxes average 1.15% already, and would need to go up to like 8.2% just to account for personal income tax (not including payroll taxes, social security, Medicare/Medicaid, and corporate taxes) 1. https://www.thebalance.com/current-u-s-federal-government-tax-revenue-3305762 https://www.thebalance.com/current-u-s-federal-government-ta... 2. https://www.usatoday.com/story/money/personalfinance/2017/04/16/comparing-average-property-taxes-all-50-states-and-dc/100314754/ https://www.usatoday.com/story/money/personalfinance/2017/04...
- pjc50 8y agoI wasn't proposing a total replacement of income tax! Certainly not overnight.
- scoom 8y agoPerhaps they deleted the information to comply with the GDPR.
- tomkat0789 8y agoIf they don't know who the owner is, what's to stop anybody from dressing as a shady businessman, walking up to one of these guys and saying, "yeah, I'm the owner of whatever Corp. I'd like a billion dollars, please."? I'm sure there are extra details that'd require extra snooping, but how much extra detail is needed if they can't find owners even with a frantic internal investigation?