The Panama Papers; the non-scandal ripe with possibilities

It seems to be big news to a lot of folks that there's many rich people who exploit the fine print of tax regulation to minimize their tax obligations. Nothing new about it at all. Why do you think KC Irving spent his twilight years in Bermuda?

In fact, the Irvings waged a lengthy battle with Canada's tax collectors re: the sale of supertanker loads of oil dropped off from all over the Middle East at their Canaport reception facility in New Brunswick. Those million barrel cargoes were sold to a Bermuda middle man between when they entered the Bay of Fundy and when they disgorged their load at Canaport. As it happened, any profit on that supertanker load of oil accrued to an Irving subsidiary in no-tax Bermuda instead of high-tax New Brunswick.

Which proves nothing more than that the Irvings were ahead of the curve. Nothing in these sensational Panama Papers is, on the face of it, illegal. The reason we have "tax havens" on this planet is, guess what, so rich people can avoid taxes!

Legally!

Hey, guess who writes the tax codes all over the world?... the lawyers and accountants who work for the rich folks!

This is a surprise???

But here's why this non-scandal is pregnant with possibilities. Maybe, just maybe, enough people will be pissed off about this story that they'll be motivated to make some changes.

Tax havens need to be put out of business.

Why Trump's "attack" on hedge funds was nothing of the sort

Most of the coverage I've seen about Trump's so-called attack on hedge fund managers gets it all wrong. Allegedly Mr. Trump is taking these guys to task for paying less than their share of taxes. Instead of paying at the "income" rate of 39.6% that the peons pay, they're using the "carried interest loophole" and other magic tricks to pay a mere 20%, which is the capital gains tax rate.


So the big boys are paying 20% on their profits, are they? Not bloody likely! Oh ya, maybe on the few profits they declare in the US, but what kind of doofus keeps his money in the US when the world is awash in tax havens where you'll pay little or nothing?


Remember the hoo-ha over the Mittster's financial revelations before the last election?  On the face of it, Romney was paying a tax rate of 15% on gains declared in the US. Sure, that's enough of a scandal, but myriad investigative journalists never really got to the bottom of what's in those Romney accounts in Luxemburg, Cayman Islands, Bahamas...


That's the REAL scandal!


Trump has done a valuable public service in shining a light on these non-productive paper-shufflers. But Trump himself is well aware that the problem is not the 20% capital gain tax rate.


The real problem is the hundreds of billions that successful American corporations and wealthy individuals deliberately offshore in tax havens to avoid paying any share of their US tax burden.

Patriotic US corporations stash $1.95 trillions in offshore tax-havens...

...thereby proving that they can offshore more than American jobs!

This story from Bloomberg claims that's an increase of $206 billion in just the past year. The lead offender is the iconic General Electric, with a cash horde of 110 billions stashed offshore, followed by that great philanthropist Bill Gates' Microsoft at 76 billion.

The off-shoring of profits cost the government up to $90 billion per year in lost revenues, a deficit that then needs to be made up by the little folks who don't have access to offshore tax havens.

When multi-billion dollar corporations shirk their taxes, it's up to you to pick up the slack.