How The Wealthy Hide Billions Using Tax Havens
"Secrecy World" author Jake Bernstein explains how the super-wealthy hide billions using tax havens and shell companies. -------------------------------------------------- Follow Business Insider on Twitter: https://twitter.com/businessinsider Follow BI on Facebook: http://bit.ly/1W9Lk0n Read more: http://www.businessinsider.com/ -------------------------------------------------- Business Insider is the fastest growing business news site in the US. Our mission: to tell you all you need to know about the big world around you. The BI Video team focuses on technology, strategy and science with an emphasis on unique storytelling and data that appeals to the next generation of leaders – the digital generation.
How The Wealthy Hide Billions Using Tax Havens
The Panama Papers
This section introduces the Panama Papers leak and its significance.
Introduction to the Panama Papers
- In 2016, 11.5 million files were leaked from Mossack Fonseca, the world's fourth-largest offshore law firm.
- The leaked files were called the Panama Papers and exposed hundreds of thousands of offshore entities and shell companies connected to over 200 countries and territories.
- Prominent world leaders, politicians, business people, and the super wealthy were exposed to have been using offshore accounts for tax avoidance and other purposes.
Why Should You Care?
- Every year, about $70 billion that the US could be using for infrastructure, law enforcement, healthcare or education is missing.
- The US Treasury estimates that something like $300 billion a year is laundered through the United States.
- Tax avoidance and tax evasion are going on through this secrecy world making it impossible for people who live there to afford property.
How Did British Virgin Islands Become a Huge Tax Haven?
This section explains how Mossack Fonseca discovered British Virgin Islands as a new territory for anonymous shell companies.
Discovery of British Virgin Islands
- After instability in Panama was pushing clients away during the '80s, Mossack Fonseca discovered that British Virgin Islands were ripe new territory for anonymous shell companies.
- Their vision was to be McDonald's of the offshore system by pumping out these anonymous shell companies and make them available to a wider audience.
Why Is This Still Happening?
This section explains why tax evasion is still happening despite being a big problem.
Reasons for Tax Evasion
- Congress has eviscerated the IRS and starved it of funds, making it impossible for them to go after this kind of tax evasion.
- A lot of this information is being held in banks.
Austerity Measures in Europe
In this section, the speaker discusses how austerity measures were implemented in Europe after the financial crisis and how it affected multiple countries.
Europeans are ahead of us on this
- The Europeans got hit very hard after the financial crisis.
- Major cutbacks were implemented in multiple countries.
- Leak investigations revealed that mega wealthy individuals were not paying their fair share.
- People got upset about this and it hasn't penetrated as much in the United States yet.
Conclusion
In conclusion, the speaker emphasizes that people need to be aware that they don't have to accept austerity measures being forced upon them. The reality is that there are alternatives available.
Alternatives to Austerity Measures
- People need to be aware that they don't have to accept austerity measures being forced upon them.
- There are alternatives available.
- It's important for people to understand how big and all-encompassing the issue is.