Tuesday, April 05, 2016

The Sound of Another Shoe Waiting to Drop

You've no doubt seen coverage of the leak of 11.5 million documents (2.6 terabytes, in more modern parlance) from a law firm in Panama, Mossack Fonseca, whose business, one of its partners claims, is "95% ... selling vehicles to avoid taxes." And he didn't mean Buicks.

Already the Prime Minister of Iceland has had to resign because of the leak.

Kevin Drum writes:
In any case, you might find this whole thing a bit boring because it implicates only a bunch of foreigners, mainly in countries already well known for their casual relationship with bribery and corruption. What about the United States? 
Editor of Süddeutsche Zeitung responded to the lack of U.S. individuals in the documents, saying "Just wait for what is coming next" — Mathew Ingram (@mathewi) 
So stay tuned. Maybe Hillary Clinton has millions of dollars stashed away in the Isle of Man! 
I'm not sure if Drum was being sarcastic, but if either Clinton's name comes up it will be the end of Hillary's campaign. 
What I hope to see, though, are the names of some of the biggest financial donors to the extremist right wing of the Republican Party. And I don't mean the Cokes.
We'll see.

But as Liam Stack reports in the NY Times:
One reason there may be relatively few Americans named in the documents is that it is fairly easy to form shell companies in the United States. James Henry, an economist and senior adviser to the Tax Justice Network, told Fusion that Americans “really don’t need to go to Panama.”
“Basically, we have an onshore haven industry in the U.S. that is as secretive as anywhere,” he said.
 Feel better now?


Uncle Ted said...

I think Liam Stack is at least partly right. Big American Bucks will go where the taxes are lower and rules are easier, whether it requires a shell company or not. In the States, Delaware is the state of incorporation of numerous companies whose only presence in the state consists of a name on the door of a lawyer's office, which it shares with other companies "headquartered" in the state. Nothing crooked about this, just taking advantage of the easier process and lower fees Delaware offers.

Anonymous said...

"Nothing crooked about this, just taking advantage of the easier process and lower fees Delaware offers."

Does that make it right?