21 ms·

Evidence from leaked account data on how elites use offshore banking [pdf]

275 points by gbrown_ 5y ago

milofeynman 5y ago
Direct PDF wasn't working for me. Here's the page with summary and link to PDF: https://www.brookings.edu/research/what-lies-beneath-evidence-from-leaked-account-data-on-how-elites-use-offshore-banking/ https://www.brookings.edu/research/what-lies-beneath-evidenc...
Trias11 5y ago
>> the customers of offshore banks are likely to be from the wealthiest segment of whichever society they come from. What a surprising discovery. Governments with the most abusive tax policies still cannot realize that they cannot tax their way to prosperity. Most creative and productive people, entities and businessed did, do and will use any tools at their disposal to escape barbaric tax racket and turn their attention toward jurisdictions where they treated better than in their own home country. Trillions of dollars of wealth escaped and will continue escaping away from economies where ruling politicians cannot get their heads out of their bottoms.
- Retric 5y ago
  Governments generally let people do this stuff. It’s the difference between De Jore and De Facto enforcement.
  - deleted 5y ago
    [deleted]
- wait_a_minute 5y ago
  What do you recommend for people who want to increase their wealth but aren't rich yet? The people who have potential and a solid foundation but don't yet have the capital necessary to move around like that and find the most favorable place.
  - Trias11 5y ago
    Education, investments, creative work. Of course investments in the country where corrupt polititicans are proposing doubling capital gain tax is not going to work.
  - vmception 5y ago
    Momentum trading is all you have. So last week that was Dogecoin and a few years ago it was value investing. The answer is “make money” and let it be taxed. The governments dont care about after-tax money which can then go anywhere unaccounted for. Thats when it can go in a tax deferred account in perpetuity.
    - WaxProlix 5y ago
      It'd be nice if there were some sort of 70+% reliable rule of thumb for this. I say this as someone who's made money on both value investing and dogecoin, but who's still anxious when taking on risk in new momentum-y ventures.
      - vmception 5y ago
        There isn't. The only 70+% reliable rule is general personal finance advice: "Dollar cost average" "Diversify" "The broad index of equities goes up by 7% on average annually over your whole life span, do this and you can afford an extra tennis ball on your walker in a few decades when your body fails you" If some aspect of that sounded less appealing, then you are back to momentum trading and looking for opportunities that distort the market and reality and bet the farm when you make the trade at all. Try to have fun, usually it comes with dopamine.
    - incrudible 5y ago
      How depressing that people on HN of all places think of Dogecoin trading before starting a business. If that is really your perspective, why live in the US?
      - deleted 5y ago
        [deleted]
- AlexandrB 5y ago
  Do you think there's any level of taxation where a wealthy individual wouldn't want to do some "tax avoidance" in another jurisdiction? I suspect there is not.
  - Trias11 5y ago
    "Other" jurisdictions are easily attracting capital from countries who are trigger happy to rob their citizens with taxes.
    - Retric 5y ago
      People very rarely actually leave countries over tax policies. Countries pretend ignorance because of who’s benefiting, but unless they renounce citizenship moving money off shore is effectively symbolic. Loopholes for example aren’t some inherent element of tax codes their built and maintained for the express purpose of being used.
      - Trias11 5y ago
        Quite a few wealthy people do. Especially Canadians and non-americans who can. Why wouldn't person move outside of tax jurusdiction if it afford saving few extra $MM's and possibility to discover more beautiful, friendly countries? Of course US Citizenship essentially became IRS trap and renouncing it became very difficult thing to do for americans
        Retric 5y ago
        Of Canadians top 10 wealthiest, 8 live in Canada, 2 are living in the US. That’s hardly an exodus to low tax countries. So sure, examples exist they simply don’t add up to a meaningful percentage. As to why they stay, making say 10% more money just isn’t worth much hassle to the rich. They have money what they want is all the things a well functioning society gives them.
  - techbio 5y ago
    I suspect the more hands-on tools by which law and order is enforced such as asset seizure, 24/7 monitoring, discreditation, and prison time could be the motivation for otherwise tax averse entities to transparently contribute their exact tax proportion.
- DSingularity 5y ago
  Come on. The ultra-rich don’t pay their fair share. You know this and everyone knows this. Wealth inequality is obscene. Full stop.
  - Trias11 5y ago
    Could you define "fair share" please in a way that everyone is agree with?
    - airstrike 5y ago
      I'll throw a range out there for the sake of argument, and I'm really low-balling it: 25-30%
      - kwere 5y ago
        and its still a lot
      - Trias11 5y ago
        So what would be a single reason for person with $100MM of wealth to give $25MM away to wasteful, corruptive government? What kind of benefits the person is gaining by buying $25MM worth of taxes? I thought so too. Give that person a chance to reinvest these money into local economy, growing productive businesses instead of slapping the "filthy rich" label and suddenly there is a lots of capital are used for everyone's benefits instead of escaping.
        rsgrn 5y ago
        To add $25MM to anti-corruption budgets? Sure, governments are to varying degrees, quite corrupt, but isn't that in part due to the people with leverage and power (aka money)? Example: Rich people > Shit newspapers > Misinformed populace > Shit political choices > Shit government > Corruption > Rich people now have more money.
        ceejayoz 5y ago
        > What kind of benefits the person is gaining by buying $25MM worth of taxes? Avoiding guillotines?
- ClumsyPilot 5y ago
  "Most creative and productive people, entities and businessed did, do and will use any tools at their disposal to escape barbaric tax racket" Would they prefer to do business in a society without benefits bought by taxes, where education is scant, crime is common, infrastructure and roads a crumbling and police is glorified mafia. Guess what, Amazon doesn't work in Russia because they cant make money there
vmception 5y ago
If you want more insight into this with less pejorative language, ditch the ICIJ and the Brookings study and look at KPMG, Deloitte and PwC annual reports on the offshore industry. The also know what they are doing instead of trying to reverse engineer it like these studies are.
- awestroke 5y ago
  Do you have a link to one of these reports?
- ficklepickle 5y ago
  > KPMG, Deloitte and PwC But aren't they in bed with the companies using these schemes?
  - airstrike 5y ago
    Even if they were, these are massive organizations, so different people may have different views on the matter.
  - vmception 5y ago
    The companies that wish to use these would go to KPMG, Deloitte and PwC if it is in the budget, yes. They have offices in every jurisdiction for an unparalleled and holistic view of an ever changing landscape.
- pdimitar 5y ago
  Any links, please?
- smashah 5y ago
  Is there some sort of issue with ICIJ reporting?
  - vmception 5y ago
    Yes. Over time they've balanced out their reporting by at least acknowledging legitimate uses of tax havens, and even going as far to point out that it is probably the predominate use of tax havens - compliant to all countries involved. But their headlines still lead their readers towards assuming impropriety. And now that they bother to acknowledge the existence of legitimate uses, given the ongoing criticism from anybody educated in the financial sector, they don't bother with the advantages or "the why". They could educate, but choose to only raise awareness towards the assumption of guilt for using leading and competitive jurisdictions. They just instigate populist sentiment and make a tally of the few people adversely affected due to the populist sentiment after being doxxed, alongside the different and fewer people that actually broke their country's laws.
oriettaxx 5y ago
Best is 4. << In the 1981 Mel Brooks comedyHistory of the World, Part I, King Louis XVI, reflectingon his outrageous privilege, exclaims, “It’s good to be the King!” Mr. Brooks was ontosomething >> great!
wazoox 5y ago
"Elite"? You mean kleptocratic oligarchy, right? Or robber plutocracy, maybe?
ajsnigrutin 5y ago
That's why i'm against high taxes. We get a bunch of random political parties, promising to "tax the rich" and stuff, we get new laws... and what happens? - The poor already pay very little tax - no change there - The rich avoid the tax by doing shady stuff (who remembers the panama papers.. or this.. or many other stories like these) - I, the middle class engineer get fucked by the taxes, and I get fucked hard, and not in fun way.
- estaseuropano 5y ago
  That's not a result of high taxes but of either badly designed/balanced taxes or of lack of enforcement.
  - cscurmudgeon 5y ago
    But the conversation is always towards higher taxes rather than fixing enforcement, design, etc. Edit: I think I hit a nerve.
    - _djo_ 5y ago
      Not really. The Biden administration’s proposals include more funding and organisational reform for the IRS. Democrats have been talking for some time about how the steady defunding of the IRS has resulted in less tax collection from the rich and powerful.
      - nostrebored 5y ago
        Reforming the IRS as an organization doesn't work when it's tax law that's the problem.
        _djo_ 5y ago
        It’s part of a solution, not the entire solution. But even if you improved tax law you’re still going to need a well-resourced and highly skilled IRS capable of properly auditing multinationals and the very wealthy.
fortran77 5y ago
Hacker News: "People Deserve Privacy" Also Hacker News: "Look how outrageous it is that these other people want privacy!"
- mhh__ 5y ago
  https://en.wikipedia.org/wiki/Panama_Papers#/media/File:Countries_implicated_in_the_Panama_Papers.svg https://en.wikipedia.org/wiki/Panama_Papers#/media/File:Coun... "Countries with politicians, public officials or close associates implicated in the leak on April 15, 2016" Politicians, public officials... A lot of the people using these schemes are either in the category mentioned above or in fairly highly regulated industries like finance. I don't know about you but the combination of politicians (a famously trustworthy bunch) and financial secrecy sounds less than optimal for everyone else.
- clairity 5y ago
  it’s not contradictory, as you seem to be poorly insinuating. transparency should scale with power and wealth, lest we fall into oligarchy/tyranny/authoritarianism/any-other-system that’s very good for a few and very bad for the rest of us.
- nerdponx 5y ago
  Who said anything about privacy?
- atombender 5y ago
  Do you have a right to privacy when you do something that's illegal and/or immoral?
- dang 5y ago
  Hacker News is a site used by millions. You might as well complain that humans aren't all the same.
antb123 5y ago
This book argues actually its western countries like UK, US, and FR that benefit as rulers buy London, Paris or NYC flats in the names of offshore companies. https://www.amazon.com/Dictators-Without-Borders-Power-Central/dp/0300208448 https://www.amazon.com/Dictators-Without-Borders-Power-Centr... Personally I think the correct response is to tax things rich people like in those countries. Specifically housing, high end cars etc. Putting beneficial owners on real estate makes total sense.
- andrewnicolalde 5y ago
  Just bought the book, thanks for the suggestion!
- joe_the_user 5y ago
  The book looks interesting but I'm not a fan on the spin you're apparently putting on it. The London real estate market and maybe real estate dealers perhaps benefit. Most citizens of UK don't benefit from parts of London being actually empty for purposes of investment. The recycling of third world dollars back to the West has been ongoing since the "patrodollars" of the 1970s. Those who get a piece of those dollars benefit, the average citizen Western nations haven't benefited from the tremendous economic imbalance this has created.
  - pseudalopex 5y ago
    I think they agree with you. Beneficial ownership is a legal term. Putting beneficial owners on real estate means not letting buyers hide their identities with shell companies.
- nly 5y ago
  This is changing. UK law will soon require property bought through companies to reveal the names and details of significant shareholders.
sprash 5y ago
So a report by the elite (Brookings is essentially Rockefeller) is telling us how elites are evading taxes. Sorry, I expect this PDF to be full of BS.
- markus_zhang 5y ago
  I think the Rockefellers became so powerful that material wealth doesn't mean much for them.
weeboid 5y ago
> I conclude with recommendations on how reporting requirements need to change to improve the ability of regulators and the research community to detect and counter illicit finance. LOL
offsthroway 5y ago
Throwaway for obvious reasons Since the world is lacking in the department of opinion of wealthy men, let me add something to this discussion: I'm currently in the situation of becoming rich (from a global standpoint, unicorn early employees would laugh at my near future net worth) due to selling my company. I'm having conversations with both tax lawyers and private bankers who are interested in helping me manage my future money. It's very clear for both sides that: a) I never want not to be rich again b) Paying less taxes is better than paying more taxes Even so, all the professionals I talked to were very straightforward with saying that trying to avoid taxes would bring more headaches than it was worth it. Deferring taxes is considered kosher even for tax authorities as long as I declare everything I have correctly and it wouldn't be that bad after the first uh, let's say bite after the liquidation event. Still, they insisted that an offshore structure would be useful to me for the rest of my life. I'm not American, I'm a citizen of a developing country that isn't a total mess, but it's... developing. And let's leave it at that. A few cases that convinced me: 1) Tax officers have no downside to suing even completely transparent transactions. It's completely possible to get a tax bill with a heavy fine on top years after the fact because suddenly someone thought something was off. One of the tax lawyers I talked to mentioned* how he nullified a ~hundreds of millions fine/reassessment, but only after a long (+expensive) legal battle and a lot of stress for the sellers. Totally unfounded, and he mentioned it happened more than once. 2) I almost* lost my exit because the government bureaucracy was not working due to covid and the buyer had a hard deadline for Q1. Said bureaucratic procedure would be a single docusign in a business-friendly jurisdiction (aka tax heaven) 3) American private bankers find it a hassle to deal with developing country clients directly, handling their money through offshore accounts (as a business client, that is, the shell corp is the private banking client) is a lot easier. 4) This is not a case, but: I don't love paying taxes, but I understand that I live in a poor country and of course taking a tax dollar from me is a lot fairer than taking a tax dollar from my poor neighbor. Still, it is not beyond the realm of possibility that my government, or at least a few unsavory parties that could be in charge one day, decides that it wants to set a high wealth tax or outright confiscate investments and I don't plan on making that easy (see point a above). So, there's that. No need to feel sympathies for the (future) millionaire here, just want to share that avoiding taxes is not my primary concern, and could not be for others, too. * Yes, this is a joke * Later I confirmed with said client, he was still angry at it
Woodi 5y ago
Ye, and poor peoples are not allowed to use encryption like in Australia :> From when "wispering" make you a criminal ?
motohagiography 5y ago
These people figure they can't attract legitimate investment so instead they index on how to bar the exits. It is more conspicuous who doesn't get the scrutiny of Brookings, ICIJ, TJN, and organizations like them. (hint: you elected them) These places are just fronts for post-hoc policy justification, and papers like these are pseudo-intellectual activism masquerading as scholarship. I see a similar authoritarian nerd attitude in security all the time, where someone finds an unexpectedly invasive surveillance method and then tries to ingratiate themselves to the institutions who can mandate it. They think they have made something people want, when in fact they have only invented a new way to betray their fellow citizens to the insatiable will to power of bureaucracies. (Contrary to the talking points of their apologists, bureaucracies are in fact not made of people, they are made of bureaucrats) Let's look at a problem these organizations don't care about, like the real social issue that is domestic money laundering, which not only converts the proceeds of really harmful crimes into legit bank deposits, it harms communities directly with real estate and rental bubbles, diseconomic businesses, dumping, political and police corruption, all of which their anti-capital policies directly create. The revenue-gap nerds are fine with laundering because some of it comes into the tax net, social consequences be damned. While I have never earned enough to hide it in my life, I wish the class of people who think governments have a revenue problem but not a spending or scope problem would try solving a problem they didn't first cause for a change instead of thinking the world needs more of their concern and facilitation.
- CPLX 5y ago
  It sounds like you have strong opinions which might be interesting but I found this comment incomprehensible. Who exactly are you talking about? What do you mean by domestic money laundering and “really harmful crimes”? Are you talking about drug dealing? White collar crime?
LatteLazy 5y ago
The comments here are like a bad reddit thread. For shame HN!
deleted 5y ago
[deleted]
MilnerRoute 5y ago
"New estimates by Congress’s official forecasters show Democrats’ tax cuts — included in their March stimulus package — will drive down tax rates on low- and middle-income people so much this year that those earning less than $75,000, on average, will owe nothing in federal income taxes." "Those making between $75,000 and $100,000 will pay a scant 1.8 percent average tax rate this year, the nonpartisan Joint Committee on Taxation predicts." "That will shift the relative burden to the wealthy, at least temporarily, with those earning more than $500,000 expected to pay more than two-thirds of all income taxes this year... Those making between $500,000 and $1 million will pay 20.8 percent of their earnings in income taxes. People earning more than $1 million will pay 25.8 percent." https://www.politico.com/news/2021/04/25/dems-tax-cuts-biden-484476 https://www.politico.com/news/2021/04/25/dems-tax-cuts-biden...
cletus 5y ago
So here’s several things I’m in favor of: 1. A loan is treated as repatriating any offshore foreign income that you might have; 2. We need to eliminate it at least tackle transfer pricing / profit shifting. One way to do that is to apportion profits based on revenue. 3. Residential units owned by corporations need to be taxed higher; and 4. Owning property in a country or state should make you a tax resident of that jurisdiction.
- Red_Leaves_Flyy 5y ago
  >4. Owning property in a country or state should make you a tax resident of that jurisdiction. How should that work in practice? Should a person who owns homes in Connecticut, California, New York, D.C., Virginia, Florida, Alps, Paris, Hong Kong, London, Etc be paying state taxes in every jurisdiction? I'm asking in earnest, and want billionaires to pay significantly more in taxes per dollar of gains and wealth than, e.g. Americans making median income, but how can that be enforced when it's less expensive to bribe/extort a politician/party than it is to pay their fair share?
  - crmd 5y ago
    Yes, they would have a tax liability in each location, with foreign tax credit offsets. So they end up paying whatever is the highest tax rate.
tasssko 5y ago
This is a complex problem and I think the best we can hope for is to close any loopholes and manage with taxes and laws for the effects of negative externalities from high net worth individuals.
notaspecialist 5y ago
This is masturbation. complaining about rich people doing rich things is a waste of time unless you're going to revoke the ability of corporations to exist and act like people. Until then, shaddup.

275 points by gbrown_ 5y ago

Direct PDF wasn't working for me. Here's the page with summary and link to PDF: https://www.brookings.edu/research/what-lies-beneath-evidence-from-leaked-account-data-on-how-elites-use-offshore-banking/ https://www.brookings.edu/research/what-lies-beneath-evidenc...

Trias11 5y ago

>> the customers of offshore banks are likely to be from the wealthiest segment of whichever society they come from. What a surprising discovery. Governments with the most abusive tax policies still cannot realize that they cannot tax their way to prosperity. Most creative and productive people, entities and businessed did, do and will use any tools at their disposal to escape barbaric tax racket and turn their attention toward jurisdictions where they treated better than in their own home country. Trillions of dollars of wealth escaped and will continue escaping away from economies where ruling politicians cannot get their heads out of their bottoms.

Retric 5y ago
Governments generally let people do this stuff. It’s the difference between De Jore and De Facto enforcement.
- deleted 5y ago
  [deleted]
wait_a_minute 5y ago
What do you recommend for people who want to increase their wealth but aren't rich yet? The people who have potential and a solid foundation but don't yet have the capital necessary to move around like that and find the most favorable place.
- Trias11 5y ago
  Education, investments, creative work. Of course investments in the country where corrupt polititicans are proposing doubling capital gain tax is not going to work.
- vmception 5y ago
  Momentum trading is all you have. So last week that was Dogecoin and a few years ago it was value investing. The answer is “make money” and let it be taxed. The governments dont care about after-tax money which can then go anywhere unaccounted for. Thats when it can go in a tax deferred account in perpetuity.
  - WaxProlix 5y ago
    It'd be nice if there were some sort of 70+% reliable rule of thumb for this. I say this as someone who's made money on both value investing and dogecoin, but who's still anxious when taking on risk in new momentum-y ventures.
    - vmception 5y ago
      There isn't. The only 70+% reliable rule is general personal finance advice: "Dollar cost average" "Diversify" "The broad index of equities goes up by 7% on average annually over your whole life span, do this and you can afford an extra tennis ball on your walker in a few decades when your body fails you" If some aspect of that sounded less appealing, then you are back to momentum trading and looking for opportunities that distort the market and reality and bet the farm when you make the trade at all. Try to have fun, usually it comes with dopamine.
  - incrudible 5y ago
    How depressing that people on HN of all places think of Dogecoin trading before starting a business. If that is really your perspective, why live in the US?
    - deleted 5y ago
      [deleted]
AlexandrB 5y ago
Do you think there's any level of taxation where a wealthy individual wouldn't want to do some "tax avoidance" in another jurisdiction? I suspect there is not.
- Trias11 5y ago
  "Other" jurisdictions are easily attracting capital from countries who are trigger happy to rob their citizens with taxes.
  - Retric 5y ago
    People very rarely actually leave countries over tax policies. Countries pretend ignorance because of who’s benefiting, but unless they renounce citizenship moving money off shore is effectively symbolic. Loopholes for example aren’t some inherent element of tax codes their built and maintained for the express purpose of being used.
    - Trias11 5y ago
      Quite a few wealthy people do. Especially Canadians and non-americans who can. Why wouldn't person move outside of tax jurusdiction if it afford saving few extra $MM's and possibility to discover more beautiful, friendly countries? Of course US Citizenship essentially became IRS trap and renouncing it became very difficult thing to do for americans
      - Retric 5y ago
        Of Canadians top 10 wealthiest, 8 live in Canada, 2 are living in the US. That’s hardly an exodus to low tax countries. So sure, examples exist they simply don’t add up to a meaningful percentage. As to why they stay, making say 10% more money just isn’t worth much hassle to the rich. They have money what they want is all the things a well functioning society gives them.
- techbio 5y ago
  I suspect the more hands-on tools by which law and order is enforced such as asset seizure, 24/7 monitoring, discreditation, and prison time could be the motivation for otherwise tax averse entities to transparently contribute their exact tax proportion.
DSingularity 5y ago
Come on. The ultra-rich don’t pay their fair share. You know this and everyone knows this. Wealth inequality is obscene. Full stop.
- Trias11 5y ago
  Could you define "fair share" please in a way that everyone is agree with?
  - airstrike 5y ago
    I'll throw a range out there for the sake of argument, and I'm really low-balling it: 25-30%
    - kwere 5y ago
      and its still a lot
    - Trias11 5y ago
      So what would be a single reason for person with $100MM of wealth to give $25MM away to wasteful, corruptive government? What kind of benefits the person is gaining by buying $25MM worth of taxes? I thought so too. Give that person a chance to reinvest these money into local economy, growing productive businesses instead of slapping the "filthy rich" label and suddenly there is a lots of capital are used for everyone's benefits instead of escaping.
      - rsgrn 5y ago
        To add $25MM to anti-corruption budgets? Sure, governments are to varying degrees, quite corrupt, but isn't that in part due to the people with leverage and power (aka money)? Example: Rich people > Shit newspapers > Misinformed populace > Shit political choices > Shit government > Corruption > Rich people now have more money.
      - ceejayoz 5y ago
        > What kind of benefits the person is gaining by buying $25MM worth of taxes? Avoiding guillotines?
ClumsyPilot 5y ago
"Most creative and productive people, entities and businessed did, do and will use any tools at their disposal to escape barbaric tax racket" Would they prefer to do business in a society without benefits bought by taxes, where education is scant, crime is common, infrastructure and roads a crumbling and police is glorified mafia. Guess what, Amazon doesn't work in Russia because they cant make money there

vmception 5y ago

If you want more insight into this with less pejorative language, ditch the ICIJ and the Brookings study and look at KPMG, Deloitte and PwC annual reports on the offshore industry. The also know what they are doing instead of trying to reverse engineer it like these studies are.

awestroke 5y ago
Do you have a link to one of these reports?
ficklepickle 5y ago
> KPMG, Deloitte and PwC But aren't they in bed with the companies using these schemes?
- airstrike 5y ago
  Even if they were, these are massive organizations, so different people may have different views on the matter.
- vmception 5y ago
  The companies that wish to use these would go to KPMG, Deloitte and PwC if it is in the budget, yes. They have offices in every jurisdiction for an unparalleled and holistic view of an ever changing landscape.
pdimitar 5y ago
Any links, please?
smashah 5y ago
Is there some sort of issue with ICIJ reporting?
- vmception 5y ago
  Yes. Over time they've balanced out their reporting by at least acknowledging legitimate uses of tax havens, and even going as far to point out that it is probably the predominate use of tax havens - compliant to all countries involved. But their headlines still lead their readers towards assuming impropriety. And now that they bother to acknowledge the existence of legitimate uses, given the ongoing criticism from anybody educated in the financial sector, they don't bother with the advantages or "the why". They could educate, but choose to only raise awareness towards the assumption of guilt for using leading and competitive jurisdictions. They just instigate populist sentiment and make a tally of the few people adversely affected due to the populist sentiment after being doxxed, alongside the different and fewer people that actually broke their country's laws.

oriettaxx 5y ago

Best is 4. << In the 1981 Mel Brooks comedyHistory of the World, Part I, King Louis XVI, reflectingon his outrageous privilege, exclaims, “It’s good to be the King!” Mr. Brooks was ontosomething >> great!

wazoox 5y ago

"Elite"? You mean kleptocratic oligarchy, right? Or robber plutocracy, maybe?

ajsnigrutin 5y ago

That's why i'm against high taxes. We get a bunch of random political parties, promising to "tax the rich" and stuff, we get new laws... and what happens? - The poor already pay very little tax - no change there - The rich avoid the tax by doing shady stuff (who remembers the panama papers.. or this.. or many other stories like these) - I, the middle class engineer get fucked by the taxes, and I get fucked hard, and not in fun way.

estaseuropano 5y ago
That's not a result of high taxes but of either badly designed/balanced taxes or of lack of enforcement.
- cscurmudgeon 5y ago
  But the conversation is always towards higher taxes rather than fixing enforcement, design, etc. Edit: I think I hit a nerve.
  - _djo_ 5y ago
    Not really. The Biden administration’s proposals include more funding and organisational reform for the IRS. Democrats have been talking for some time about how the steady defunding of the IRS has resulted in less tax collection from the rich and powerful.
    - nostrebored 5y ago
      Reforming the IRS as an organization doesn't work when it's tax law that's the problem.
      - _djo_ 5y ago
        It’s part of a solution, not the entire solution. But even if you improved tax law you’re still going to need a well-resourced and highly skilled IRS capable of properly auditing multinationals and the very wealthy.

fortran77 5y ago

Hacker News: "People Deserve Privacy" Also Hacker News: "Look how outrageous it is that these other people want privacy!"

mhh__ 5y ago
https://en.wikipedia.org/wiki/Panama_Papers#/media/File:Countries_implicated_in_the_Panama_Papers.svg https://en.wikipedia.org/wiki/Panama_Papers#/media/File:Coun... "Countries with politicians, public officials or close associates implicated in the leak on April 15, 2016" Politicians, public officials... A lot of the people using these schemes are either in the category mentioned above or in fairly highly regulated industries like finance. I don't know about you but the combination of politicians (a famously trustworthy bunch) and financial secrecy sounds less than optimal for everyone else.
clairity 5y ago
it’s not contradictory, as you seem to be poorly insinuating. transparency should scale with power and wealth, lest we fall into oligarchy/tyranny/authoritarianism/any-other-system that’s very good for a few and very bad for the rest of us.
nerdponx 5y ago
Who said anything about privacy?
atombender 5y ago
Do you have a right to privacy when you do something that's illegal and/or immoral?
dang 5y ago
Hacker News is a site used by millions. You might as well complain that humans aren't all the same.

antb123 5y ago

This book argues actually its western countries like UK, US, and FR that benefit as rulers buy London, Paris or NYC flats in the names of offshore companies. https://www.amazon.com/Dictators-Without-Borders-Power-Central/dp/0300208448 https://www.amazon.com/Dictators-Without-Borders-Power-Centr... Personally I think the correct response is to tax things rich people like in those countries. Specifically housing, high end cars etc. Putting beneficial owners on real estate makes total sense.

andrewnicolalde 5y ago
Just bought the book, thanks for the suggestion!
joe_the_user 5y ago
The book looks interesting but I'm not a fan on the spin you're apparently putting on it. The London real estate market and maybe real estate dealers perhaps benefit. Most citizens of UK don't benefit from parts of London being actually empty for purposes of investment. The recycling of third world dollars back to the West has been ongoing since the "patrodollars" of the 1970s. Those who get a piece of those dollars benefit, the average citizen Western nations haven't benefited from the tremendous economic imbalance this has created.
- pseudalopex 5y ago
  I think they agree with you. Beneficial ownership is a legal term. Putting beneficial owners on real estate means not letting buyers hide their identities with shell companies.
nly 5y ago
This is changing. UK law will soon require property bought through companies to reveal the names and details of significant shareholders.

sprash 5y ago

So a report by the elite (Brookings is essentially Rockefeller) is telling us how elites are evading taxes. Sorry, I expect this PDF to be full of BS.

markus_zhang 5y ago
I think the Rockefellers became so powerful that material wealth doesn't mean much for them.

weeboid 5y ago

> I conclude with recommendations on how reporting requirements need to change to improve the ability of regulators and the research community to detect and counter illicit finance. LOL

offsthroway 5y ago

Throwaway for obvious reasons Since the world is lacking in the department of opinion of wealthy men, let me add something to this discussion: I'm currently in the situation of becoming rich (from a global standpoint, unicorn early employees would laugh at my near future net worth) due to selling my company. I'm having conversations with both tax lawyers and private bankers who are interested in helping me manage my future money. It's very clear for both sides that: a) I never want not to be rich again b) Paying less taxes is better than paying more taxes Even so, all the professionals I talked to were very straightforward with saying that trying to avoid taxes would bring more headaches than it was worth it. Deferring taxes is considered kosher even for tax authorities as long as I declare everything I have correctly and it wouldn't be that bad after the first uh, let's say bite after the liquidation event. Still, they insisted that an offshore structure would be useful to me for the rest of my life. I'm not American, I'm a citizen of a developing country that isn't a total mess, but it's... developing. And let's leave it at that. A few cases that convinced me: 1) Tax officers have no downside to suing even completely transparent transactions. It's completely possible to get a tax bill with a heavy fine on top years after the fact because suddenly someone thought something was off. One of the tax lawyers I talked to mentioned* how he nullified a ~hundreds of millions fine/reassessment, but only after a long (+expensive) legal battle and a lot of stress for the sellers. Totally unfounded, and he mentioned it happened more than once. 2) I almost* lost my exit because the government bureaucracy was not working due to covid and the buyer had a hard deadline for Q1. Said bureaucratic procedure would be a single docusign in a business-friendly jurisdiction (aka tax heaven) 3) American private bankers find it a hassle to deal with developing country clients directly, handling their money through offshore accounts (as a business client, that is, the shell corp is the private banking client) is a lot easier. 4) This is not a case, but: I don't love paying taxes, but I understand that I live in a poor country and of course taking a tax dollar from me is a lot fairer than taking a tax dollar from my poor neighbor. Still, it is not beyond the realm of possibility that my government, or at least a few unsavory parties that could be in charge one day, decides that it wants to set a high wealth tax or outright confiscate investments and I don't plan on making that easy (see point a above). So, there's that. No need to feel sympathies for the (future) millionaire here, just want to share that avoiding taxes is not my primary concern, and could not be for others, too. * Yes, this is a joke * Later I confirmed with said client, he was still angry at it

Woodi 5y ago

Ye, and poor peoples are not allowed to use encryption like in Australia :> From when "wispering" make you a criminal ?

motohagiography 5y ago

These people figure they can't attract legitimate investment so instead they index on how to bar the exits. It is more conspicuous who doesn't get the scrutiny of Brookings, ICIJ, TJN, and organizations like them. (hint: you elected them) These places are just fronts for post-hoc policy justification, and papers like these are pseudo-intellectual activism masquerading as scholarship. I see a similar authoritarian nerd attitude in security all the time, where someone finds an unexpectedly invasive surveillance method and then tries to ingratiate themselves to the institutions who can mandate it. They think they have made something people want, when in fact they have only invented a new way to betray their fellow citizens to the insatiable will to power of bureaucracies. (Contrary to the talking points of their apologists, bureaucracies are in fact not made of people, they are made of bureaucrats) Let's look at a problem these organizations don't care about, like the real social issue that is domestic money laundering, which not only converts the proceeds of really harmful crimes into legit bank deposits, it harms communities directly with real estate and rental bubbles, diseconomic businesses, dumping, political and police corruption, all of which their anti-capital policies directly create. The revenue-gap nerds are fine with laundering because some of it comes into the tax net, social consequences be damned. While I have never earned enough to hide it in my life, I wish the class of people who think governments have a revenue problem but not a spending or scope problem would try solving a problem they didn't first cause for a change instead of thinking the world needs more of their concern and facilitation.

CPLX 5y ago
It sounds like you have strong opinions which might be interesting but I found this comment incomprehensible. Who exactly are you talking about? What do you mean by domestic money laundering and “really harmful crimes”? Are you talking about drug dealing? White collar crime?

LatteLazy 5y ago

The comments here are like a bad reddit thread. For shame HN!

deleted 5y ago

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MilnerRoute 5y ago

"New estimates by Congress’s official forecasters show Democrats’ tax cuts — included in their March stimulus package — will drive down tax rates on low- and middle-income people so much this year that those earning less than $75,000, on average, will owe nothing in federal income taxes." "Those making between $75,000 and $100,000 will pay a scant 1.8 percent average tax rate this year, the nonpartisan Joint Committee on Taxation predicts." "That will shift the relative burden to the wealthy, at least temporarily, with those earning more than $500,000 expected to pay more than two-thirds of all income taxes this year... Those making between $500,000 and $1 million will pay 20.8 percent of their earnings in income taxes. People earning more than $1 million will pay 25.8 percent." https://www.politico.com/news/2021/04/25/dems-tax-cuts-biden-484476 https://www.politico.com/news/2021/04/25/dems-tax-cuts-biden...

cletus 5y ago

So here’s several things I’m in favor of: 1. A loan is treated as repatriating any offshore foreign income that you might have; 2. We need to eliminate it at least tackle transfer pricing / profit shifting. One way to do that is to apportion profits based on revenue. 3. Residential units owned by corporations need to be taxed higher; and 4. Owning property in a country or state should make you a tax resident of that jurisdiction.

Red_Leaves_Flyy 5y ago
>4. Owning property in a country or state should make you a tax resident of that jurisdiction. How should that work in practice? Should a person who owns homes in Connecticut, California, New York, D.C., Virginia, Florida, Alps, Paris, Hong Kong, London, Etc be paying state taxes in every jurisdiction? I'm asking in earnest, and want billionaires to pay significantly more in taxes per dollar of gains and wealth than, e.g. Americans making median income, but how can that be enforced when it's less expensive to bribe/extort a politician/party than it is to pay their fair share?
- crmd 5y ago
  Yes, they would have a tax liability in each location, with foreign tax credit offsets. So they end up paying whatever is the highest tax rate.

tasssko 5y ago

This is a complex problem and I think the best we can hope for is to close any loopholes and manage with taxes and laws for the effects of negative externalities from high net worth individuals.

notaspecialist 5y ago

This is masturbation. complaining about rich people doing rich things is a waste of time unless you're going to revoke the ability of corporations to exist and act like people. Until then, shaddup.