Pandora Papers fail to deliver shocking new information but confirm current tax laws are inefficient
Paying taxes has never been fun for most people, and those who can afford to reduce their liabilities go the extra mile to do so.
The Pandora Papers are getting a lot of attention in media outlets around the globe. On October 3, close to 12 million documents leaked and exposed secret schemes of wealthy people trying to avoid paying massive amounts in taxes.
Pandora Papers reveal who is hiding their money and where
PANDORA PAPERS FAIL DELIVERY
The leak was in the works for months, and like its predecessors, the Pandora Papers have just confirmed things that most experts already knew.
The offshore countries and territories have low or no corporate tax and often protect the identity of individuals doing business there. The so-called tax havens also simplify things when it comes to setting up a company.
Those destinations are appealing for people trying to pay less in taxes. Switzerland, Singapore, Cayman Islands, and the British Virgin Islands are some of the most popular places for such activities.
Over 329 politicians from 90 countries are mentioned in the leak
PANDORA PAPERS FAIL DELIVERY
Former British Prime Minister Tony Blair and the presidents of Ukraine, Kenya, and Ecuador are listed in the Pandora Papers. Jordan’s King Abdullah II is also included.
Some celebrities like Elton John, Ringo Starr, Shakira, Claudia Schiffer, Julio Iglesias, Jackie Chan and Bono were exposed in the leak. These influential individuals are not accused of doing anything wrong. Using offshore schemes and loopholes in tax laws is not illegal. The system is legal but does not appear ethical as many countries are facing shortfalls in their budget.
While those big names may be innocent, experts believe some criminals choose the same route to protect their assets.
Documents leak proves change is needed
PANDORA PAPERS FAIL DELIVERY
The leaking of financial documents linked to wealthy people is nothing new. The Offshore Leaks of 2013 were followed by the Panama Papers of 2016 and the Paradise Papers in 2017. Paradise Papers had more documents, but Offshore Leaks had more data.
Countries like the United States have reacted to the leak by promising to take action, but it is unclear what options are really on the table.
Moreover, some have said that people in power have no reason to change the system because it benefits them directly. It is believed that between $5.6 trillion and $32 trillion are placed in offshore accounts.
This means that the world as a whole loses close to $600 billion in tax revenues every year.
Is the leak ultimately about class warfare?
PANDORA PAPERS FAIL DELIVERY
A few observers have come out to defend the system which is currently in place and that allows tax havens to flourish. They point out that Mr. Blair, for example, only saved $425,000 on a land transaction, and that is probably not enough to fix his country’s problems.
Those same backers say that the real goal of these leaks is to promote a form of class warfare between ultra-rich people and others with less means by pushing the idea that the small person is paying their fair share in taxes while the wealthy ones are dodging.
Some believe real tax reform is necessary and that a flat rate could make offshore destinations less attractive.
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