I woke up early yesterday, after a few minutes decided to read my phone, and there was the blow-up over the “Panama papers”. I read the BBC’s excellent “live” page which in twitter-timeline style was posting news and highlights as they uncovered details.
And then I went back to sleep. There wasn’t anything really new here, it just confirmed what many people already knew, third world dictators, power junkies and desperate wanna-live-forever celebrities were cheating on a massive scale.
Later in the day many of my politically minded friends posted links, articles and critiques on facebook and twitter. Ultimately the leak is a big deal as it takes away on of the key value propositions of this type of activity, secrecy. Without secrecy, the sorts of deals, services and tax avoidance is sort-of-meaningless.
What most ordinary people have overlooked, or turned a blind eye to is that they more than likely benefit from similar schemes. If you’ve used the services of, or bought stuff from IKEA, Pepsi, Starbucks, Microsoft, been to Walt Disney theme park, then you too have benefited or contributed to tax avoidance. Indeed, almost everyone orders from Amazon, and in many cases, doesn’t pay tax that they would have paid had they bought the self same product from a local store.If you bank with Barclays, Citigroup, Deutsche Bank, HSBC, JP Morgan, then yep, same thing.
“The World’s Favorite New Tax Haven Is the United States.” Why? Because even American law firms dedicated to protecting the financial assets of the world’s elite say the US is a perfectly effective tax haven”
What make the Panama papers different, is it gives the tax authorities around the world the chance to go after individuals. Thats much easier and much more interesting than going after these big tax avoiding companies. As always, it’s divide and conquer.
Not doubt entirely coincidentally, when I collected my mail yesterday, I got a full FACTA request/disclosure from my bank, FirstDirect, a subsidiary of HSBC. So, they can make it very difficult for me to maintain a bank account back in the UK, and will directly report to the US Inland Revenue Service, I on the other hand can do nothing about their deliberate tax avoidance, that the UK and US Tax authorities know all about.