A massive trove of records, the Pandora Papers, have recently unmasked numerous facts regarding the hidden wealth of the global elite, subjecting them to public scrutiny.
More than 600 journalists from the International Consortium of Investigative Journalists(ICIJ) compiled the files. Over 12 million files disclose how hundreds of world elites have hidden billions of dollars in assets over the last two and a half decades.
Among global statesmen mentioned in the papers are Former British Prime Minister Tony Blair and Jordanian King Abdullah II. The “leaks “debunk how considerable sums of wealth have been amassed through tax evasion and offshore accounts.
It seems like good news. The cat is out of the bag and the ill-gotten gains of the rich and wealthy, accumulated through tax evasion and laundered out to financial havens, are well exposed. However, something seems fishy: Where are the Americans?
According to ICIJ, the term “offshore banking” was originally “coined to refer to island nations with lax finance laws that allowed people to hide their assets”.
US states have topped the list, as global account holders utilized offshore trusts and shell companies for illegal purposes, such as to evade paying taxes or to fund felonious enterprises.
US State governments, particularly those of Nevada and South Dakota, have been chastised for allowing their states to become tax havens, where foreign nationals used companies based in the states to move money without being detected.
“Over the past decade, South Dakota, Nevada, and more than a dozen other US states have transformed themselves into leaders in the business of peddling financial secrecy”.
According to NPR, South Dakota and Nevada “adopted financial secrecy laws that rival those of offshore jurisdictions,” researchers wrote, citing the “explosive” growth of such schemes in the US.
Stories have also delved deeper into the US aspects of this system, such as the harm caused by US tax havens and how Americans accused of wrongdoing can avoid financial repercussions by using offshore entities.
Apparently, the explosive global investigation disclosed that the US now functions as an overseas tax haven globally for many, yet concealed the big American names.
Tech titans who supposedly power the US economy hide their wealth in bizarre tax-havens. It’s incorrect — and it adds up to the US which “is already chocking under an everything shortage“.
A 2019 report on Amazon, Apple, Facebook, Google, Microsoft, and Netflix, dubbed the “Silicon Six” by the non-profit Fair Tax Mark, claims a significant disparity between the taxes they are expected to pay and the amount they actually pay.
According to the report, between 2010 and 2019, companies used legal tax avoidance strategies that have become popular among corporations to pay $155.3 billion less in taxes across all global territories in which they operate than the actual tax rates would have required. When not only cash was paid but also money set aside for future taxes, the gap remained at $100.2 billion.
Fair Tax Mark chief executive Paul Monaghan said “we got the cash taxes paid from the cash flow statement, and we got the cash provisions from the [income statement]” through US financial filings”, adding that “these amounts were matched against the companies’ profits over the time period”.
A trillion here, a trillion there
In 2018, Amazon paid no federal income tax in the United States on more than $11 billion in profits before taxes. The federal government also gave it a $129 million tax break, according to CNBC data.
Last February, the retailing behemoth announced record-breaking sales and income for 2020, as well as an effective federal income tax rate of 9.4%, which is less than half the statutory corporate tax of 21%, according to CNBC data.
Its global pretax income for 2020 was $24 billion, up 73% from $14 billion in the previous pre-pandemic year. Its sales increased by 38% year on year—during a pandemic. In 2020, the company expects to earn $20 billion in profits in the United States. Amazon would have paid $4.1 billion in federal income tax if it had paid 21% of its profits. By fair means or foul, Amazon’s reported current tax of $1.8 billion was less than half that amount, implying that the company avoided $2.3 billion in taxes last year.
“Not in the trove”
Perhaps the most troubling concealment lies in the fact that the United States’ wealthiest nationals — including Amazon founder Jeff Bezos and the owner of the Washington Post; Tesla founder Elon Musk; Microsoft billionaire Bill Gates; and billionaire investor Warren Buffett, Trump, Biden’s son — are not part of those named in the trove.
How could such large sums and big personalities be excluded from the Pandora Papers?
The power behind (to be changed)
Digging into the group behind the Pandora Papers, ICIJ, you realize that it is openly funded by derivatives of the CIA and the US state department mainly the Ford foundation (the CIA use the foundation for covert funding), and Open Society Foundations (the founder George Soros – a well-known figure known for supporting colored revolution and NGOs that serve US foreign interests).
Not so surprisingly, ICIJ is also a participant in the Amazon Services LLC Associates Program. This might be one simple explanation, but it is not the whole story.
Fundamental flaws in the tax code
According to the US Department of Treasury, the wealthiest Americans may be avoiding up to $163 billion in income taxes each year, and many use tax laws to do so legally, financial experts say. Tax experts in the United States have long suspected, and many Americans have long questioned, why many of the country’s wealthiest people pay little or no tax?
The US system, on the other hand, prefers wealth-based income and provides avenues for the wealthy and corporations to avoid taxation that working people do not have.
These fundamental flaws in the tax code existed for many years prior to the 2017 Tax Cuts and Jobs Act (TCJA), which added insult to injury by providing massive new tax cuts to the wealthiest Americans and corporations.
These flaws have aided in the dramatic rise in inequality, resulting in a less dynamic and less just economy, which could be a factor in a crisis that might lead to the country’s “historic and catastrophic default.”
source : almayadeen.net