Paradise Papers


        In 2015 one of the biggest information leaks in history gave light to how the ultra wealthy and the biggest corporations around the world were hiding billions in taxes from numerous different governments around the world; it was called the Panama Papers. The Panama Papers leak revealed 11.5 million documents, some dating back to the 1970’s, showing tax evasion, fraud, and shady international tax loopholes allowing the world’s wealthy elites and corporations to evade taxes they owed to a plethora of different countries (Paradise 12). Estimates showed that potentially hundreds of billions of dollars were not paid to countries around the world (Paradise 13). For a fleeting moment the world listened up and payed attention to the screaming plague of missing fortunes not being paid to countries to which they were owed. Then new issues, both domestic and foreign came along and fewer people by the day followed the story of the Panama Papers, because few bothered to care for much longer. Government officials and tax revenue experts said new legislation was being quickly formed to stop this from happening again,  people believed it and went on with their lives. Well, it happened again. In October 2017 rumors and allegations of more tax evasion arouse from multiple different sources centered around a tax firm called Appleby. On November 5, 2017, the documents themselves were released to the public; 13.4 million documents totaling 1.4 terabytes of information telling a tale of deceitful and sometimes illegal affairs allowing for trillions of dollars to escape from the governments they were owed to (Paradise 12). The promises and pledges governments and officials made in 2015 following the Paradise Papers scandal were shown to be empty and fruitless as the same thing happened, but on a larger scale and with even more taxes evaded.

The people behind these shady and lucrative deals should be charged with crimes and be forced to pay back all amounts of currency they owe any government, and more. The firms behind the scandal, like Appleby, should be disbanded and those in high ranking positions should be charged with criminal infractions of the law, in whatever countries they wronged. For too long wealthy and powerful people in this country and around the world have been able to walk away with no or little punishment for wrongdoings, which have cost people and governments far more than any number of petty gang criminals could ever amount to. The tax system needs to be re-written completely to allow for a fresh reboot which plugs any loopholes and ensures tax evasion on this scale never happens again. To do this, the people of the US and the world need to pay attention to this issue, and demand action from the leaders which they follow.

There are three main reasons this atrocity was able to reoccur after mass tax evasion was supposed to be fixed after the Panama Papers; first, there are not enough agencies, or groups dedicated to safeguard against tax evasion, and the few groups which do exist, are not in proper shape to do the job correctly. Second, the promises which were made after the initial break of the Panama Papers, were empty and never actually occurred. Third, the world and especially the American public stopped paying attention and putting pressure on governments to take action on the issue allowing governments and agencies to sit back and let the issue drift into neutral without anyone noticing that nothing was being done.

Since 2010, funding to the IRS has been cut by 17%, which does not seem like much but has had profound effects on the agency, primarily in workforce numbers. The IRS  had to cut 14% (13,000) of its employees and 23% (12,000) enforcement staff since 2010, while workload continues to climb (Marr 1). Before 2010 many experts expressed concern that the agency was already under duress and could not properly keep up with the assignments it was expected to complete, and this is before the agencies budget was slashed by 2.4 billion dollars (Marr 4). The Criminal Investigation Division (CI), which is the division in charge of criminal tax evasion investigations, lost more than 11,000 employees from 2010 to 2015 (Marr 5). This led to an overall drop of 33% (350,000) less audits during the same time frame, meaning more and more criminals were able to get away with tax evasion (Marr 15). The worst part is that studies show that for every dollar invested into the IRS, specifically divisions like CI, four dollars is recouped (Marr 17). So, imagine what 2.4 billion multiplied by four would do for government revenue.

Not many people bother to look at wasteful government spending. In 2015 the United States of America gave monetary aid to Russia (the country which commonly opposes US influence and power in every continent and courtroom) 23 million dollars, China (the country we currently owe 1.2 trillion dollars) 47 million dollars, Japan (a country with one of the most powerful and fastest growing economies) 8 million dollars (U.S.). Together these countries alone were given 78 million dollars in total, which, if invested in the IRS would give back 312 million dollars to the American people instead of more spending and debt.  

After the Panama Papers, politicians abroad promised to make legislation to rewrite tax laws to ensure the actions exposed by the leak would not occur again. In the US, not a single law was passed from the time the Papers were released which even attempted to change tax code evasion (Congress).

The last, but not least, reason the Panama Papers did not properly change society and governments they way it should have, was because a large majority of the American public did not even bother to check in on the issue after the initial news coverage of the leak. When the American people do not care about an issue enough to even check on it, American Congress certainly does not care about it, unless private interest groups or corporations with money in hand do. Once the American people simmered down from the heat of brief outrage about the topic of the papers, virtually no news organization bothered to cover it, unless the seldom event of someone involved in the countless schemes was arrested or sentenced, which was just once. The Panama Papers should have been a topic covered from start to finish; from the first release to the last sentencing of the financial vampires who viewed themselves as above society and the law. But, life moves on and people did not make time to make sure that they were up to date on one of the biggest fraudulent financial schemes in history, not the United States, not Mexico, not Panama, but the biggest financial fraud in the history of the world. The public does not care about subjects which do not directly affect themselves. They may care about starving children in Africa for a fleeting moment, or the thousands displaced and hungry from Hurricane Irma in Puerto Rico and surrounding islands for the thirty seconds of airtime given to show images of the destruction, but when the screens turn off, thoughts of empathy and human compassion for most fade away in minutes or less. The Panama Papers incident was no exception, it came and went, because most of the public subconsciously thought “this doesn’t apply to me” and never bothered to keep up with issue and realise sufficient action was taking place to fix the problem. The same exact thing is happening with the Paradise Papers.

Some proponents of this system of offshore tax haven use shown in the Paradise Papers stimulates international commerce and stops the occurrence of double taxation (Khan 7).  These statements are nothing more than an attempt to make money laundering and tax evasion sound like a viable and moral option. Offshore tax havens have been shown to corrupt officials and aid money launderers and white collar criminals (Khan 7). Moreover, offshore tax evasion also takes billions from the people and governments of numerous countries (Paradise 13). The perpetrators like the lawyers and clients of firms like Appleby claim what they have done and continue to do is not illegal, and while they are correct it does not justify tax evasion to the grand total of billions of dollars.

The idea from the general public that this is not something which directly or adversely affects them is foolish and miscalculated. Estimates formed from the Paradise Papers put the grand total of taxes dodged by wealthy individuals and corporations in the US in the trillions (Covert 14). TRILLIONS. Corporations alone avoided approximately seventy billion in taxes (Covert 1). To replace all of the lead water pipes in the city of Flint would take 140 million dollars, not even a hundredth (.002 ot be exact) of all the taxes the American public was robbed of by greedy corporate interests (Covert 1). That seventy billion is not the total either, it is the estimated total of what the US misses every year. So since 2010, it would be safe to assume that all together there is about four-hundred billion dollars (which also looks like this: $490,000,000,000) unaccounted for in the US treasury. The cost to end homelessness in the United States would be about twenty-two million, and to give free college tuition to all in would be about seventy million (Covert 2). With all of the money the US has missed out in a single year on we could now have state funded college, little to none homelessness, and clean drinking water for the people of Flint who still are missing safe water. Remember that the seventy billion a year is just the money which corporations skim from the IRS, that does not include the wealthy 1% and others, so it would also be safe to assume that every year the United States is missing hundreds of billions of dollars because certain people are able to use loopholes and technicalities to shift around bank accounts and revenue statements to other countries where they pay virtually no taxes whatsoever, just so the wealthy can become wealthier.

This problem is not just a few greedy people and corporations either, hundreds of companies and people in the United States alone have participated in tax evasion. Household brand names like Nike, Apple, and plenty more (Paradise 5). The Paradise Papers show multiple ways these companies are able to evade taxes, such as creating “shell companies” in other countries where there is little to no taxes, cutting their taxes down significantly. Individuals like the Queen of England, F1 race car driver Lewis Hamilton, and Trump advisor Wilbur Ross have also all been accused of using offshore tax havens to shield their fortunes from tax payments (Paradise 5). When individuals are able to bank through foreign banks, they can register different items and incomes in different countries where the tax depending on the situation is cheaper, saving potentially millions for a single person. The aforementioned Lewis Hamilton was able to avoid paying virtually any taxes on his seventeen million dollar luxury jet (Paradise 5), which begs the question, why does someone who can afford to buy a seventeen million dollar plane need to not pay taxes when a disabled veteran or a single mom cannot afford to put gas in their cars? What makes these people who already make millions or even billions in a single year different from the rest of the population who pay their taxes; why do they need to save more money for themselves and not cooperate and provide the taxes that are expected of them when everyone else abides by the rules?

Insanity is doing something over and over again and expecting a different result,” -unknown. The American public is insane. In 2016 few people kept up with the Panama Papers leak in the following months after the initial outrage, allowing for criminals to escape prosecution, and legislators avoid devoting time to the problem. The same thing is happening right now in America and few people realise it. After the Panama Papers debacle, only two men in the whole world were prosecuted for crimes in the Panama Papers (Willingham 2). The majority of people who educated themselves on the topic in the beginning when information about the Paradise Papers was most readily available have moved on and forgotten, but this issue deserves far more attention than it has received, especially considering this is the second time this type of occurrence has happened. The only way for any change and reform to come about in order to fix this plague of greedy tax evasion is for the public to inform themselves and then demand the government actually do something this time.

The first of these demands should be that those who have been exposed for committing illegal acts by the Paradise Papers should be convicted of the crimes they have committed to the highest degree possible. By punishing the individuals who will most likely get away with their crimes, it sends a clear message to others that they will not be able to do the same without fear of punishment. If there are few punishments shown to those in a position to potentially gain large sums of money from cheating taxes there is a good chance they will act on the opportunity to save themselves any amount possible. But, by showing there is a high punishment to contradict the potential gain, far less people would consider evading their taxes.

How much longer must the American public be duped and robbed of the fair share of income corporations and the wealthy owe, but do not pay because they feel they do not owe it? By investing more into the IRS, sending a clear and loud voice to Washington to do something, and paying attention and give due diligence to make sure everyone contributes what they owe to the government we all have to support together America and other countries of the world can receive the income owed to them. This atrocious circle of info leaks has given citizens ample information to use against those who do wrong, but no one does anything because the populace does not care, does not have the time or resources, or just loses interest. Billions and trillions of dollars are not something to lose interest in. The American pubic and others around the world should demand action from their legislators to take action and actually close the gap for good this time to make sure tax evasion is an extinct issue which will no longer plague society. By investing more in the agencies like the IRS who safeguard against tax evasion, and keeping a diligent eye on the occurrences when they happen, the American public can make sure this type of calamity never occurs again. Those who escaped paying their taxes using legal loopholes should be forced to pay back what they owe, and more in reparation to the people of the United States and the world. It is not fair for others to evade the taxes they owe their countries because they believe they are better than the rest of society.

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