Panama: The Hidden Trillions
October 11, 2016 7:38 AM Subscribe
" The burden of taxation has moved inexorably away from multinational companies and rich people to ordinary people."
This is my shocked face. Why everybody thinks that the wealthy are doing anything to help the economy these days is beyond me.
posted by xingcat at 7:49 AM on October 11, 2016 [6 favorites]
This is my shocked face. Why everybody thinks that the wealthy are doing anything to help the economy these days is beyond me.
posted by xingcat at 7:49 AM on October 11, 2016 [6 favorites]
When have taxes been anything but the rich demanding tribute from the serfs?
posted by BlueHorse at 8:00 AM on October 11, 2016 [11 favorites]
posted by BlueHorse at 8:00 AM on October 11, 2016 [11 favorites]
No representation without taxation!
posted by I-Write-Essays at 8:00 AM on October 11, 2016 [18 favorites]
posted by I-Write-Essays at 8:00 AM on October 11, 2016 [18 favorites]
Why everybody thinks that the wealthy are doing anything to help the economy these days is beyond me.
See, this is what really gets me about Brexit discussions, and in fact any talk of 'the economy' in corporate media discourse. The concept that is 'the economy' is something we plebs are actually supposed to care for and nurture and 'help'. For our superiors, it's just there to be looted (obviously the banks are doing whatever they can with shorting currencies or whatever while the pound slips at the moment), and that is simply what they do, outside of morality or justice or law. But for you and I, deference to the health of the economy is like the new version of forelock-tugging.
posted by Coda Tronca at 8:00 AM on October 11, 2016 [21 favorites]
See, this is what really gets me about Brexit discussions, and in fact any talk of 'the economy' in corporate media discourse. The concept that is 'the economy' is something we plebs are actually supposed to care for and nurture and 'help'. For our superiors, it's just there to be looted (obviously the banks are doing whatever they can with shorting currencies or whatever while the pound slips at the moment), and that is simply what they do, outside of morality or justice or law. But for you and I, deference to the health of the economy is like the new version of forelock-tugging.
posted by Coda Tronca at 8:00 AM on October 11, 2016 [21 favorites]
I'm not sure if this is terrible ad placement, or brilliant ad placement, but half way through the story, I see this text ad:
Offshore Banking In Panama
We Ensure The Optimal Wealth Structure For You. Contact Us Now!
-URL not copied-
Back to the article: I'm cynical that anything will actually change, or there will be any significant repercussions for those who are named in or linked to these damning documents, unlike the source of the leak, who justified their actions in part by writing:
I don't think anyone could go to any sort of court for the actions linked to these documents, as I doubt these documents could be used as evidence (please correct me if I'm wrong). Similarly, how would this system change? If countries changed their taxation structure? Isn't that the whole point of off-shore banking, to sidestep what's in place? So it comes back to the off-shore banking itself, which would require pressures from other nations to change their practices, and I'm sure there are too many politicians and political supporters who benefit too much from this situation to change anything.
Then again, Bank of Credit and Commerce International, the 7th largest private bank in the world, was shuttered due to British investigations (apparently US federal regulators took no action, despite being implicated for being the center of a major money-laundering scheme. Sometimes such good things happen to bad people.
posted by filthy light thief at 8:08 AM on October 11, 2016 [3 favorites]
We Ensure The Optimal Wealth Structure For You. Contact Us Now!
-URL not copied-
Back to the article: I'm cynical that anything will actually change, or there will be any significant repercussions for those who are named in or linked to these damning documents, unlike the source of the leak, who justified their actions in part by writing:
I decided to expose Mossack Fonseca because I thought its founders, employees and clients should have to answer for their roles in these crimes, only some of which have come to light thus far. It will take years, possibly decades, for the full extent of the firm’s sordid acts to become known.(The full manifesto is here)
I don't think anyone could go to any sort of court for the actions linked to these documents, as I doubt these documents could be used as evidence (please correct me if I'm wrong). Similarly, how would this system change? If countries changed their taxation structure? Isn't that the whole point of off-shore banking, to sidestep what's in place? So it comes back to the off-shore banking itself, which would require pressures from other nations to change their practices, and I'm sure there are too many politicians and political supporters who benefit too much from this situation to change anything.
Then again, Bank of Credit and Commerce International, the 7th largest private bank in the world, was shuttered due to British investigations (apparently US federal regulators took no action, despite being implicated for being the center of a major money-laundering scheme. Sometimes such good things happen to bad people.
posted by filthy light thief at 8:08 AM on October 11, 2016 [3 favorites]
The concept that is 'the economy' is something we plebs are actually supposed to care for and nurture and 'help'.
The only reason we plebs care is because so much of our future finances are tied up in stocks and bonds, so we often rise or sink with 'the economy,' though we never rise as high as the wealthy do, nor do they seem to fall as low as we do.
posted by filthy light thief at 8:09 AM on October 11, 2016 [6 favorites]
The only reason we plebs care is because so much of our future finances are tied up in stocks and bonds, so we often rise or sink with 'the economy,' though we never rise as high as the wealthy do, nor do they seem to fall as low as we do.
posted by filthy light thief at 8:09 AM on October 11, 2016 [6 favorites]
On the one hand, Tronca is right: "the economy" isn't ours. At best it's something that's been stolen from us. But on the other hand, we can't just wreck it, because like it or not our day-to-day lives really are dependent on this stolen thing; it's part of our metabolism, and if it dies a bunch of us die with it.
So instead of letting it die, we've got to figure out how to steal it back. Which is easier said than done, right? I mean, some dudebros in Russia gave it a good try a century or so ago, but even that effort was basically derailed right from the start.
posted by You Can't Tip a Buick at 8:19 AM on October 11, 2016 [8 favorites]
So instead of letting it die, we've got to figure out how to steal it back. Which is easier said than done, right? I mean, some dudebros in Russia gave it a good try a century or so ago, but even that effort was basically derailed right from the start.
posted by You Can't Tip a Buick at 8:19 AM on October 11, 2016 [8 favorites]
I don't mean I don't care about where our money goes, I just mean I don't understand what you expect me to do when asked to vote a certain way in order to 'help' the economy.
Zizek again seems apposite: ‘If you imagine a world organization where the [taxation and redistribution measures] proposed by Piketty can effectively be enacted, then the problems are already solved. Then already you have a total political reorganization, you have a global power which effectively can control capital, we already won… The true problem is to create the conditions for his apparently modest measure to be actualized.’
posted by Coda Tronca at 8:26 AM on October 11, 2016 [5 favorites]
Zizek again seems apposite: ‘If you imagine a world organization where the [taxation and redistribution measures] proposed by Piketty can effectively be enacted, then the problems are already solved. Then already you have a total political reorganization, you have a global power which effectively can control capital, we already won… The true problem is to create the conditions for his apparently modest measure to be actualized.’
posted by Coda Tronca at 8:26 AM on October 11, 2016 [5 favorites]
Like the EU: The rich and powerful created this supranational governing body to make laws and rules and rule over us and then they make us pay for it out of our taxes. While they sit back and watch the money roll in and we suffer from deprivation and poverty. Nice job, overlords, well played.
And from the Brexit threads, we know there is poverty all over Europe, so it's not as if the EU has changed this or eradicated it anywhere. In fact, the EU has rules on austerity (look up "Stability and Growth Pact) which are imposed on us all, except for Spain and Portugal (after Brexit) which avoided fines after failing to hit the targets set, as the fines were waived by Schauble, aided by Pierre Moscovici - who, during a stint as Hollande's Finance Minister, flouted the rules.
So austerity and poverty for us, tax avoidance and loadsamoney for them.
posted by marienbad at 8:26 AM on October 11, 2016 [5 favorites]
And from the Brexit threads, we know there is poverty all over Europe, so it's not as if the EU has changed this or eradicated it anywhere. In fact, the EU has rules on austerity (look up "Stability and Growth Pact) which are imposed on us all, except for Spain and Portugal (after Brexit) which avoided fines after failing to hit the targets set, as the fines were waived by Schauble, aided by Pierre Moscovici - who, during a stint as Hollande's Finance Minister, flouted the rules.
So austerity and poverty for us, tax avoidance and loadsamoney for them.
posted by marienbad at 8:26 AM on October 11, 2016 [5 favorites]
Why everybody thinks that the wealthy are doing anything to help the economy these days is beyond me.
Of course they're helping -- by creating jobs for the rest of us. Where would we be without these "job creators"? No price is too great to pay for the largess they bestow on us thusly.
posted by Slothrup at 8:29 AM on October 11, 2016 [2 favorites]
Of course they're helping -- by creating jobs for the rest of us. Where would we be without these "job creators"? No price is too great to pay for the largess they bestow on us thusly.
posted by Slothrup at 8:29 AM on October 11, 2016 [2 favorites]
These are the fuckers whose backs should be first against the wall if we are ever able to tear apart this rat's nest.
posted by slogger at 8:31 AM on October 11, 2016 [3 favorites]
posted by slogger at 8:31 AM on October 11, 2016 [3 favorites]
I don't think anyone could go to any sort of court for the actions linked to these documents,
Depends what kind of court.
The court run by the angry people with rags and pitchforks perhaps?
On stealing the economy back.
So far the best choice I've seen has come from co-op movements. Perhaps if we could get enough money moving into and through co-ops we could start sucking a bit out of the hyper rich.
Have a whole co-op parasite economy that tries to sit on the side and suck the blood of the real one and give nothing back?
posted by Just this guy, y'know at 8:40 AM on October 11, 2016 [3 favorites]
Depends what kind of court.
The court run by the angry people with rags and pitchforks perhaps?
On stealing the economy back.
So far the best choice I've seen has come from co-op movements. Perhaps if we could get enough money moving into and through co-ops we could start sucking a bit out of the hyper rich.
Have a whole co-op parasite economy that tries to sit on the side and suck the blood of the real one and give nothing back?
posted by Just this guy, y'know at 8:40 AM on October 11, 2016 [3 favorites]
*I am not an economist nor a biologist... obviously.
posted by Just this guy, y'know at 8:41 AM on October 11, 2016
posted by Just this guy, y'know at 8:41 AM on October 11, 2016
It's fair to say the United States does a much better job of collecting the taxes it believes due than most other countries. That's in part because of how the US taxes. If you're a US citizen, income earned abroad by US citizens is taxable in the US, with a credit for overseas taxes paid. That's unusual. You really only see in the US.
There's a reason why there weren't many US citizens on the Panama Papers lists, after 9/11 we got really strict with the money laundering regulations, which had the side effect of forcing all sorts of disclosure requirements on tax havens. Many won't even take on US clients anymore to avoid it.
posted by leotrotsky at 8:46 AM on October 11, 2016 [16 favorites]
There's a reason why there weren't many US citizens on the Panama Papers lists, after 9/11 we got really strict with the money laundering regulations, which had the side effect of forcing all sorts of disclosure requirements on tax havens. Many won't even take on US clients anymore to avoid it.
posted by leotrotsky at 8:46 AM on October 11, 2016 [16 favorites]
The Foreign Account Tax Compliance Act, or Fatca, is what I'm talking about. It requires financial firms to disclose foreign accounts held by U.S. citizens and report them to the IRS or face steep penalties.
posted by leotrotsky at 8:52 AM on October 11, 2016 [4 favorites]
posted by leotrotsky at 8:52 AM on October 11, 2016 [4 favorites]
That said, it seems like other countries' citizens are starting to stash their money here, which is interesting.
After years of lambasting other countries for helping rich Americans hide their money offshore, the U.S. is emerging as a leading tax and secrecy haven for rich foreigners. By resisting new global disclosure standards, the U.S. is creating a hot new market, becoming the go-to place to stash foreign wealth. Everyone from London lawyers to Swiss trust companies is getting in on the act, helping the world’s rich move accounts from places like the Bahamas and the British Virgin Islands to Nevada, Wyoming, and South Dakota.
posted by leotrotsky at 9:05 AM on October 11, 2016 [3 favorites]
After years of lambasting other countries for helping rich Americans hide their money offshore, the U.S. is emerging as a leading tax and secrecy haven for rich foreigners. By resisting new global disclosure standards, the U.S. is creating a hot new market, becoming the go-to place to stash foreign wealth. Everyone from London lawyers to Swiss trust companies is getting in on the act, helping the world’s rich move accounts from places like the Bahamas and the British Virgin Islands to Nevada, Wyoming, and South Dakota.
posted by leotrotsky at 9:05 AM on October 11, 2016 [3 favorites]
| Then again, Bank of Credit and Commerce International, the 7th largest private bank in the world, was shuttered due to British investigations (apparently US federal regulators took no action, despite being implicated for being the center of a major money-laundering scheme.
I'm pretty sure that was because it wasn't in the interests of US "National Security." BCCI was the cash drawer for many of the CIAs black bag ops, and for the money that flowed between the cocaine cartels and the Middle East and the Contras during the Reagan/Bush era.
posted by spacely_sprocket at 9:13 AM on October 11, 2016 [3 favorites]
I'm pretty sure that was because it wasn't in the interests of US "National Security." BCCI was the cash drawer for many of the CIAs black bag ops, and for the money that flowed between the cocaine cartels and the Middle East and the Contras during the Reagan/Bush era.
posted by spacely_sprocket at 9:13 AM on October 11, 2016 [3 favorites]
Panama is but one of the many many places to conceal money. In fact, after PP became public, many wealthy people moved money to new places in Bahamas. We learn about some of this concealed money traced back to European and Russian sources, but not much thus far (or ever?) about concealed American money. There are, for example, 4,300 accounts listed in Panama Papers for accounts with the name "Trump"--probably using The Don's name, a brand that he sells.
posted by Postroad at 9:14 AM on October 11, 2016
posted by Postroad at 9:14 AM on October 11, 2016
In here we also learned a newspaper (that considers itself to be the reference in journalism) obtained a list of journalists and politicians that were on GES (the group that controlled the Espirito Santo bank that collapsed into shambles) payroll, but published diddly squat. I'm guessing a lot of people on both right and center would be caught pants down, including directors at many places that sold the lie the bank was fine and everyone should invest on it, and being outed as a spineless leech would look too well on their curriculum.
Also, once again: when you hear an economist say "we can't afford public services", ask them "why, how many millions and assets have your friends made untaxable last week?"
posted by lmfsilva at 9:16 AM on October 11, 2016 [5 favorites]
Also, once again: when you hear an economist say "we can't afford public services", ask them "why, how many millions and assets have your friends made untaxable last week?"
posted by lmfsilva at 9:16 AM on October 11, 2016 [5 favorites]
"there is poverty all over Europe, so it's not as if the EU has changed this or eradicated it"
That's not the point of the EU, though. It was created for entirely different reasons.
"helping the world’s rich move accounts ... to Nevada, Wyoming, and South Dakota"
Hmmm, I wonder if those states' legislatures have anything in common.
posted by kevinbelt at 9:20 AM on October 11, 2016 [1 favorite]
That's not the point of the EU, though. It was created for entirely different reasons.
"helping the world’s rich move accounts ... to Nevada, Wyoming, and South Dakota"
Hmmm, I wonder if those states' legislatures have anything in common.
posted by kevinbelt at 9:20 AM on October 11, 2016 [1 favorite]
Wow, here I was thinking that FATCA was the US leading the way in making tax cheats pay their fair share. I guess it was naive to believe we weren't using our political leverage to go both ways; what can be used to make tax havens open up reporting on American clients can just as easily be used to take in foreign tax cheats, skim off their money and tell their host nation's tax authority to pound sand.
posted by indubitable at 9:21 AM on October 11, 2016
posted by indubitable at 9:21 AM on October 11, 2016
That said, it seems like other countries' citizens are starting to stash their money here, which is interesting
I'm sure promoters in the US are trying to sell their US services abroad, but given that US tax laws make global mobility of investment assets tough, it's tough to imagine this is more than a sales pitch being mistaken for a trend. A US trust set up by a non-US person is going to be subject to US tax, for example, and I doubt people are rushing to have that happen when they can send their assets to a tax neutral jurisdiction.
posted by jpe at 9:22 AM on October 11, 2016
I'm sure promoters in the US are trying to sell their US services abroad, but given that US tax laws make global mobility of investment assets tough, it's tough to imagine this is more than a sales pitch being mistaken for a trend. A US trust set up by a non-US person is going to be subject to US tax, for example, and I doubt people are rushing to have that happen when they can send their assets to a tax neutral jurisdiction.
posted by jpe at 9:22 AM on October 11, 2016
From the article:
"...attitudes toward tax avoidance have substantially shifted over the decades since the late 1930s, when the US Treasury secretary, Henry Morgenthau, informed the president that some wealthy American tax evaders had started to set up dummy corporations with dummy directors in British colonies. 'The ordinary salaried man and the small merchant does not resort to these or similar devices, wrote Morgenthau disapprovingly. 'Legalized avoidance or evasion by the so-called leaders of the business community…throws an additional burden upon other members of the community who are less able to bear it, and who are already cheerfully bearing their fair share.'
In other words there was, before the World War II, something shameful in the rich trying to avoid the taxes that the rest of us have to pay."
My question is, when did this change? It was not always that way, and it obviously isn't anymore, so how did that little moment happen? What conditions made it possible for elite opinion in the early 20th century US to discourage this?
posted by kevinbelt at 9:30 AM on October 11, 2016 [3 favorites]
"...attitudes toward tax avoidance have substantially shifted over the decades since the late 1930s, when the US Treasury secretary, Henry Morgenthau, informed the president that some wealthy American tax evaders had started to set up dummy corporations with dummy directors in British colonies. 'The ordinary salaried man and the small merchant does not resort to these or similar devices, wrote Morgenthau disapprovingly. 'Legalized avoidance or evasion by the so-called leaders of the business community…throws an additional burden upon other members of the community who are less able to bear it, and who are already cheerfully bearing their fair share.'
In other words there was, before the World War II, something shameful in the rich trying to avoid the taxes that the rest of us have to pay."
My question is, when did this change? It was not always that way, and it obviously isn't anymore, so how did that little moment happen? What conditions made it possible for elite opinion in the early 20th century US to discourage this?
posted by kevinbelt at 9:30 AM on October 11, 2016 [3 favorites]
FATCA involves reciprocal information sharing. So we sign a FATCA agreement with the other government and swap info.
posted by jpe at 9:31 AM on October 11, 2016
posted by jpe at 9:31 AM on October 11, 2016
The US is also getting really weird when it comes to Domestic Asset Protection Trusts (DAPTs). Different states are competing for trust assets, and it's become a race to the bottom. It hasn't been litigated yet, but there are trusts in like 13 different states that ostensibly let you get to all your money, but keep your creditors out. It's contrary to hundreds of years of basic trust law, but the legislatures don't particularly seem to care.
posted by leotrotsky at 9:58 AM on October 11, 2016 [5 favorites]
posted by leotrotsky at 9:58 AM on October 11, 2016 [5 favorites]
the banks are doing whatever they can with shorting currencies or whatever while the pound slips at the moment), and that is simply what they do, outside of morality or justice or law.
but this is nominally talking about what these banks (and their lawyers) do inside of the law.
if you want to do bourgeois politics, the path is pretty simple:
1) policy proposal: reinstate something equivalent to pre-1986 banking regulations in the UK.
2) make a spreadsheet of everyone who says this is impossible or undesirable. these are your political enemies
3) defeat them.
you can do something similar in the US. of course, the problem is that "political enemies" encompasses most of both major political parties and the majority of their middle class professional supporters eg. Metafilter. but, on the bright side, this is a very small minority of the population.
posted by ennui.bz at 10:01 AM on October 11, 2016 [7 favorites]
but this is nominally talking about what these banks (and their lawyers) do inside of the law.
if you want to do bourgeois politics, the path is pretty simple:
1) policy proposal: reinstate something equivalent to pre-1986 banking regulations in the UK.
2) make a spreadsheet of everyone who says this is impossible or undesirable. these are your political enemies
3) defeat them.
you can do something similar in the US. of course, the problem is that "political enemies" encompasses most of both major political parties and the majority of their middle class professional supporters eg. Metafilter. but, on the bright side, this is a very small minority of the population.
posted by ennui.bz at 10:01 AM on October 11, 2016 [7 favorites]
It's contrary to hundreds of years of basic trust law
I saw that trust guy from Harvard speak on this, and he genuinely seemed to loathe this aspect. Consistency with the common law of trusts strikes me as, fundamentally, an aesthetic objection; I don't think it moves many people that aren't already convinced.
FWIW, I really haven't seen any of these in the wild despite having worked w/ an institution that had a Delaware trust company.
posted by jpe at 10:07 AM on October 11, 2016
I saw that trust guy from Harvard speak on this, and he genuinely seemed to loathe this aspect. Consistency with the common law of trusts strikes me as, fundamentally, an aesthetic objection; I don't think it moves many people that aren't already convinced.
FWIW, I really haven't seen any of these in the wild despite having worked w/ an institution that had a Delaware trust company.
posted by jpe at 10:07 AM on October 11, 2016
My question is, when did this change?
Given that the gentleman was quoted talking about existing tax avoidance, it's not clear it has. Tax law has always been a game of cat and mouse between the law and those that want to avoid tax. That was true when Morgenthau was highlighting the use of what came to be known as Foreign Personal Holding Companies (FHPCs), and it's true now.
posted by jpe at 10:08 AM on October 11, 2016
Given that the gentleman was quoted talking about existing tax avoidance, it's not clear it has. Tax law has always been a game of cat and mouse between the law and those that want to avoid tax. That was true when Morgenthau was highlighting the use of what came to be known as Foreign Personal Holding Companies (FHPCs), and it's true now.
posted by jpe at 10:08 AM on October 11, 2016
It's contrary to hundreds of years of basic trust law
I saw that trust guy from Harvard speak on this, and he genuinely seemed to loathe this aspect. Consistency with the common law of trusts strikes me as, fundamentally, an aesthetic objection; I don't think it moves many people that aren't already convinced.
FWIW, I really haven't seen any of these in the wild despite having worked w/ an institution that had a Delaware trust company.
Without consistency, you turn the law into Calvinball*. If you let folks stash assets they can easily get to but their creditors can't because of 'magic wand' legislation that says they can't, you kludge up all sorts of things down the line. If they become widespread and hold up under litigation (they won't, I suspect) then all sorts of folks can now become effectively judgment-proof. That's bad news for everybody, making contracts less enforceable and products and services more expensive.
That's not even getting into the Dynasty Trusts, which are just a terrible idea and spit in the eye of the Rule Against Perpetuities. The potential effects of those suckers over 2+ generations would be enormously corrosive to society (deadhand control, dissolute heirs for generations, etc). There's a reason we abolished the aristocracy in this country, because they were mostly idiots who exercised disproportionate power due to inherited wealth.
To quote Jefferson (citing Adam Smith) "A power to dispose of estates for ever is manifestly absurd. The earth and the fulness of it belongs to every generation, and the preceding one can have no right to bind it up from posterity. Such extension of property is quite unnatural."
*Also known as Constitutional law.
posted by leotrotsky at 10:25 AM on October 11, 2016 [10 favorites]
I saw that trust guy from Harvard speak on this, and he genuinely seemed to loathe this aspect. Consistency with the common law of trusts strikes me as, fundamentally, an aesthetic objection; I don't think it moves many people that aren't already convinced.
FWIW, I really haven't seen any of these in the wild despite having worked w/ an institution that had a Delaware trust company.
Without consistency, you turn the law into Calvinball*. If you let folks stash assets they can easily get to but their creditors can't because of 'magic wand' legislation that says they can't, you kludge up all sorts of things down the line. If they become widespread and hold up under litigation (they won't, I suspect) then all sorts of folks can now become effectively judgment-proof. That's bad news for everybody, making contracts less enforceable and products and services more expensive.
That's not even getting into the Dynasty Trusts, which are just a terrible idea and spit in the eye of the Rule Against Perpetuities. The potential effects of those suckers over 2+ generations would be enormously corrosive to society (deadhand control, dissolute heirs for generations, etc). There's a reason we abolished the aristocracy in this country, because they were mostly idiots who exercised disproportionate power due to inherited wealth.
To quote Jefferson (citing Adam Smith) "A power to dispose of estates for ever is manifestly absurd. The earth and the fulness of it belongs to every generation, and the preceding one can have no right to bind it up from posterity. Such extension of property is quite unnatural."
*Also known as Constitutional law.
posted by leotrotsky at 10:25 AM on October 11, 2016 [10 favorites]
□ Each of the allies had its own reasons for entering the bloody conflict now variously known as the “Helvetian War,” the “Secrecy War,” and the “Last-We-Hope” — perhaps the most bizarre and furious armed struggle of all time.
A leading factor in the industrial north was the laundering of profits for drug merchants and tax cheaters. Overburdened with TwenCen debt, citizens of America and Pan-Europe demanded those groups at least pay their fair share, and resented the banking gnomes for sheltering criminals’ ill-gotten gains.
International banking secrecy was even more hated in the developing world. Those nations’ awesome debts were aggravated by “capital flight,” whereby leading citizens had for generations smuggled mountains of cash to safe havens overseas. Whether honestly earned or looted from national treasuries, this lost capital undermined frail economies, making it even harder for those left behind to pay their bills. Nations like Venezuela, Zaire and the Philippines tried to recover billions removed by former ruling elites, to no avail. Eventually, a consortium of restored democracies stopped railing at their ex-dictators and instead turned their ire on the banking havens themselves.
Still, neither taxpayer outrage up north nor cash starvation in the south would have been enough to drive the world to such a desperate, unlikely confrontation were it not for two added factors — a change in morality and the burgeoning Information Age.
Those were the days of the great arms talks, when mutual, on-site inspection was seen as the only possible way to ensure de-escalation. As each round of weapons reductions raised the verification ante, the international corps of inspectors became sacrosanct. Words like “secrecy” and “concealment” began taking on their modern, obscene connotations.
To increasing numbers of “blackjacks” — or children of century twenty-one — the mere idea of secrecy implied scheming dishonesty. “What’re you hiding, zygote?” went the-now corny phrase. But in those days it conveyed the angry, revolutionary spirit of the times.
That wrath soon turned against the one remaining power center in whom secrecy was paramount and unrepentant. By the time the members of the Brazzaville Consortium gathered to write their final ultimatum, they were no longer in a mood for compromise. Belated conciliatory words, broadcast from Berne and Nassau and Vaduz, were too little and far too late to stifle the new battle cry:… Open the books. All of them. Now!
Would the allies have gone ahead, suspecting what death and horror awaited them?
Knowing what we do now, about what lay buried under the Glarus Alps, most agree their only mistake was not declaring war sooner. In any event, by the second year of fighting, mercy was hardly on anybody’s agenda anymore. Only vengeful modern Catos could be heard, crying from the rooftops of the world—
Helvetia delenda est!
By then it was to the death.
— From The Transparent Hand, Doubleday Books, edition 4.7 (2035). [□ hyper access code 1-tTRAN-777-97-9945-29A.]
posted by Apocryphon at 10:45 AM on October 11, 2016 [6 favorites]
A leading factor in the industrial north was the laundering of profits for drug merchants and tax cheaters. Overburdened with TwenCen debt, citizens of America and Pan-Europe demanded those groups at least pay their fair share, and resented the banking gnomes for sheltering criminals’ ill-gotten gains.
International banking secrecy was even more hated in the developing world. Those nations’ awesome debts were aggravated by “capital flight,” whereby leading citizens had for generations smuggled mountains of cash to safe havens overseas. Whether honestly earned or looted from national treasuries, this lost capital undermined frail economies, making it even harder for those left behind to pay their bills. Nations like Venezuela, Zaire and the Philippines tried to recover billions removed by former ruling elites, to no avail. Eventually, a consortium of restored democracies stopped railing at their ex-dictators and instead turned their ire on the banking havens themselves.
Still, neither taxpayer outrage up north nor cash starvation in the south would have been enough to drive the world to such a desperate, unlikely confrontation were it not for two added factors — a change in morality and the burgeoning Information Age.
Those were the days of the great arms talks, when mutual, on-site inspection was seen as the only possible way to ensure de-escalation. As each round of weapons reductions raised the verification ante, the international corps of inspectors became sacrosanct. Words like “secrecy” and “concealment” began taking on their modern, obscene connotations.
To increasing numbers of “blackjacks” — or children of century twenty-one — the mere idea of secrecy implied scheming dishonesty. “What’re you hiding, zygote?” went the-now corny phrase. But in those days it conveyed the angry, revolutionary spirit of the times.
That wrath soon turned against the one remaining power center in whom secrecy was paramount and unrepentant. By the time the members of the Brazzaville Consortium gathered to write their final ultimatum, they were no longer in a mood for compromise. Belated conciliatory words, broadcast from Berne and Nassau and Vaduz, were too little and far too late to stifle the new battle cry:… Open the books. All of them. Now!
Would the allies have gone ahead, suspecting what death and horror awaited them?
Knowing what we do now, about what lay buried under the Glarus Alps, most agree their only mistake was not declaring war sooner. In any event, by the second year of fighting, mercy was hardly on anybody’s agenda anymore. Only vengeful modern Catos could be heard, crying from the rooftops of the world—
Helvetia delenda est!
By then it was to the death.
— From The Transparent Hand, Doubleday Books, edition 4.7 (2035). [□ hyper access code 1-tTRAN-777-97-9945-29A.]
posted by Apocryphon at 10:45 AM on October 11, 2016 [6 favorites]
The only reason we plebs care is because so much of our future finances are tied up in stocks and bonds, so we often rise or sink with 'the economy,'…
'Grab them by the pension.'
All too effective.
posted by jamjam at 11:18 AM on October 11, 2016
'Grab them by the pension.'
All too effective.
posted by jamjam at 11:18 AM on October 11, 2016
"Given that the gentleman was quoted talking about existing tax avoidance, it's not clear it has. Tax law has always been a game of cat and mouse between the law and those that want to avoid tax."
But my point was, at least back then, the cat actually wanted to pursue the mouse. I'm sure there are some people in the IRS today who care, but the general opinion among policymakers seems to be "if you can get away with it, good for you". That's what I'm asking about - why did elites suddenly decide, in the early 20th century, that "getting away with it" was no longer acceptable, and why did that change back? I mean, it's obvious that the early 20th century wasn't a high point for tax compliance, with the whole Prohibition/Al Capone thing. But there certainly seems to be a sense that people who did that were wrong, and should be condemned.
posted by kevinbelt at 11:55 AM on October 11, 2016 [1 favorite]
But my point was, at least back then, the cat actually wanted to pursue the mouse. I'm sure there are some people in the IRS today who care, but the general opinion among policymakers seems to be "if you can get away with it, good for you". That's what I'm asking about - why did elites suddenly decide, in the early 20th century, that "getting away with it" was no longer acceptable, and why did that change back? I mean, it's obvious that the early 20th century wasn't a high point for tax compliance, with the whole Prohibition/Al Capone thing. But there certainly seems to be a sense that people who did that were wrong, and should be condemned.
posted by kevinbelt at 11:55 AM on October 11, 2016 [1 favorite]
I think the cat has pursued the mouse pretty well in the past few decades. The '80s and '90s saw increasingly tough tax rules for foreign trusts and foreign investment assets, the aughts (IIRC) saw new rules against inbound trusts and tougher penalties for failure to disclose foreign assets, and in this decade we've had FATCA.
posted by jpe at 12:13 PM on October 11, 2016 [1 favorite]
posted by jpe at 12:13 PM on October 11, 2016 [1 favorite]
MetaFilter: What’re you hiding, zygote?
posted by Halloween Jack at 1:22 PM on October 11, 2016
posted by Halloween Jack at 1:22 PM on October 11, 2016
The rich prefer Tax havens to be beautiful islands with sailing and golden beaches. I'm scratching my head on that one as an accountant doesn't even have to go there to set up a bank account or paper company.
As an aside I heard about an American accountant who worked for a disaster agency in Fiji; played golf one day a week and claimed the wall street journal as a business expence, which he on lent to other expatriots.
posted by Narrative_Historian at 12:50 AM on October 12, 2016
As an aside I heard about an American accountant who worked for a disaster agency in Fiji; played golf one day a week and claimed the wall street journal as a business expence, which he on lent to other expatriots.
posted by Narrative_Historian at 12:50 AM on October 12, 2016
fwiw...
Capitalism in the Age of Revolution: Burke, Smith, and the Problem of Value - "The idea of the book is to look at how theorists and philosophers (and even some economists) conceived of capitalism less as an economic system and more as a political system, at several junctures in time."
Capitalism in the Age of Revolution: Burke, Smith, and the Problem of Value - "The idea of the book is to look at how theorists and philosophers (and even some economists) conceived of capitalism less as an economic system and more as a political system, at several junctures in time."
Thus we have in Burke two views of value. On the one hand, value is subjective, dependent on the wit and whimsy of the men of capital. On the other hand, there is a hierarchy of value that divides and distinguishes rich from poor, capital from labor. That value is objective. In the case of labor, it can be quantified and measured; in the case of capital, it is beyond measure. So it is the task of capital to set the value at market of whatever it is selling and whatever it is buying. The final intimation of Burke, never developed or realized but hinted at and suggested, was of an objective order of ranks and rewards, in which the better man occupied the superior rank, while the worse man occupied the lower one.also btw...
Two moves would follow, for Burke, from the blend of subjectivism in the market and objectivism in the social order. The first would be to call into question not the legitimacy of social hierarchy as such, but the composition of the higher orders, to raise the question of who is rewarded by membership in the nobility. The second would be the growing sense that the proving ground of that social hierarchy—the determination of higher and lower value, not just in the economy but throughout society—was to be found in the market.
- Capitalism, ethics, and the iceberg - "To put it in terms of the iceberg economy, the ethical is the will both to recognize the noncapitalist forms of economy below the waterline and to risk a different social organization in which capitalist exploitation ceases to be the exclusive or even predominant mode of appropriating and distributing the surplus."
- Reframing the world - "So if the performance of the liberal capitalist model is inferior to another model, then perhaps democratic liberal capitalism is not the best way to organize the mankind everywhere? Second, in responding to the challenges of globalization and the hollowing out of the domestic middle classes, a significant part of the Western public opinion shifts to populism, nationalism etc. all the forces that a successful liberal capitalist model should make sure remain marginal. But they are no longer so. Third, Danny raises the issue: should not our thinking about what is the best way to organize economic and political life be influenced not only by who is doing it most successfully but also by where the majority of the world population lives?"
- The Golden Laws of Prosperity - "Implement policy which is as good for as many people as possible."
- What's the optimal tax for capital income? - "It appears that the optimal capital income tax rate is higher than the labor income tax rate."
It's fair to say the United States does a much better job of collecting the taxes it believes due than most other countries. That's in part because of how the US taxes. If you're a US citizen, income earned abroad by US citizens is taxable in the US, with a credit for overseas taxes paid. That's unusual. You really only see in the US.
There's a reason why there weren't many US citizens on the Panama Papers lists, after 9/11 we got really strict with the money laundering regulations, which had the side effect of forcing all sorts of disclosure requirements on tax havens. Many won't even take on US clients anymore to avoid it.
Forget tax havens, the disclosure requirements extend to any bank anywhere an American holds an account. I can no longer open a personal bank account in my own name because local banks don't want the reporting burden (good thing I trust my wife!), and I can't open a small business account even with joint local partners for the same reason which has stopped me dead from starting a business in my adoptive country. Basically honest dual citizens and US emigrants are being lumped in with whatever big fish they're fishing for and it's killing me.
posted by BinGregory at 5:53 AM on October 12, 2016
There's a reason why there weren't many US citizens on the Panama Papers lists, after 9/11 we got really strict with the money laundering regulations, which had the side effect of forcing all sorts of disclosure requirements on tax havens. Many won't even take on US clients anymore to avoid it.
Forget tax havens, the disclosure requirements extend to any bank anywhere an American holds an account. I can no longer open a personal bank account in my own name because local banks don't want the reporting burden (good thing I trust my wife!), and I can't open a small business account even with joint local partners for the same reason which has stopped me dead from starting a business in my adoptive country. Basically honest dual citizens and US emigrants are being lumped in with whatever big fish they're fishing for and it's killing me.
posted by BinGregory at 5:53 AM on October 12, 2016
@jpe ... and we've had Starbucks and Facebook and Google pay something like 5000 pounds (no, that's the correct amount of zero's) in corporate tax in the UK and elsewhere. On billions in profits.
Or what about HSBC's drug money laundering?
Or one of the many other transgressions we know of and the many we don't?
These things don't get prosecuted and the loopholes don't get fixed.
posted by MacD at 10:35 AM on October 12, 2016
Or what about HSBC's drug money laundering?
Or one of the many other transgressions we know of and the many we don't?
These things don't get prosecuted and the loopholes don't get fixed.
posted by MacD at 10:35 AM on October 12, 2016
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posted by entropicamericana at 7:48 AM on October 11, 2016 [31 favorites]