Nov 13, 2017
The German newspaper Süddeutsche Zeitung and a group of other major international news outlets released what they’re calling the “Paradise Papers.” It is a trove of over 13 million leaked computer files showing how some of the world’s largest corporations and wealthiest individuals avoid paying taxes by hiding money in tax havens around the world. Some of the companies included are Google, Facebook, Twitter, Apple, Disney, Uber, Nike, Walmart, Allianz, Siemens, McDonald's, Yahoo, and Allergan, the manufacturer of Botox. Individuals mentioned include Queen Elizabeth and Prince Charles, cabinet members, advisors, and donors to Donald Trump, including Commerce Secretary Wilbur Ross and Steve Bannon, celebrities like Harvey Weinstein, Shakira, Bono and Madonna, and other wealthy people like Robert Kraft, owner of the New England Patriots and a close friend of Trump.
Together with previous leaks, like the 2015 Swiss leaks and 2016 Panama Papers, the latest leaks give a clearer picture of the ways the corporations and wealthy individuals hide what they do with their money.
One economist, Gabriel Zucman from the University of California, Berkeley, estimates the U.S. government loses 70 billion dollars every year in taxes due to the corporations shifting profits to tax havens. That amounts to 20 per cent of the corporate taxes it does collect. It would be enough to cover the entire amount the U.S. government spends each year on food stamps.
Extremely wealthy households hold 8.7 trillion dollars in offshore tax shelters, most of which they never report on their taxes.
It’s hidden away in a long list of low or zero-tax countries that include obscure places like the Cayman Islands, the island of Jersey and the Isle of Man in the English Channel, and Bermuda, to less obscure places like Switzerland, the Netherlands, Singapore and Ireland.
And it’s not all off-shore. States like Delaware, Nevada and South Dakota also have tax laws that allow for corporate secrecy.
It’s money that could be spent on fixing the roads, building schools and funding education, or providing healthcare to every individual.
All this financial secrecy is not only a way for the corporations and the wealthy to avoid paying taxes. Who knows where the money that’s hidden in these accounts comes from, whether it’s from selling iPhones, or laundered money from selling drugs, or human trafficking?
It may seem ironic that people supposedly in positions of responsibility like the Queen of England and U.S. Commerce Secretary Ross use such methods to hide their financial doings. But it’s a mark of capitalist society, particularly in its period of decay, that huge corporations and very wealthy people move their money to wherever they can make profits, rather than investing that wealth in production that could provide things that humanity needs. Politicians pay lip service to “closing tax loopholes” but then turn around and act as enablers for corporations and the wealthy to continue their financial maneuvering. When their financial wheelings and dealings get exposed, corporations like Apple and people like the Queen of England simply respond that they are just doing what the law allows.
The result is that the rest of us pay 40 per cent of our income in taxes to make up for some hugely profitable corporations and wealthy individuals who pay practically nothing, however much they like to pretend otherwise.
The working class cannot wait for politicians, bought and sold by these same corporations and individuals, to put a stop to it. They’ve been pushed back before, but only in the face of social movements that threatened to bring down their crooked system.