The USA as the world’s number one tax haven? Well, FATCA does play a role in making it harder for other countries to operate as tax havens. FATCA most certainly operates to assist the U.S. in preventing competition to the USA in the tax haven industry. As a recent article from the Tax Justice Network notes:
Bloomberg is running a story entitled The World’s Favorite New Tax Haven Is the United States, which closely follows the line that TJN has been taking, particularly since our big Loophole USA blog a year ago, and our subsequent USA Report for the Financial Secrecy Index last October.
Expanding on a quote we used in our USA report and in our more recent call for Europe to apply withholding taxes to counter the new global threat emanating from the United States, Bloomberg cites:
“How ironic—no, how perverse—that the USA, which has been so sanctimonious in its condemnation of Swiss banks, has become the banking secrecy jurisdiction du jour,” wrote Peter A. Cotorceanu, a lawyer at Anaford AG, a Zurich law firm, in a recent legal journal. “That ‘giant sucking sound’ you hear? It is the sound of money rushing to the USA.”
The article is a most useful contribution to the debate. It does quote people spouting the usual claptrap about confidentiality peddled by wealthy wealth-extractors, tax evaders and market riggers:
“Rokahr and other advisers said there is a legitimate need for secrecy. Confidential accounts that hide wealth, whether in the U.S., Switzerland, or elsewhere, protect against kidnappings or extortion in their owners’ home countries.”
The above tweet references an article written by Tony Burman, which appeared in the Toronto Star (and other papers) on April 9, 2016. The article included:
The global aftershocks of the so-called Panama Papers are only beginning to be felt. More revelations are expected in the weeks ahead, and this will only add to the uproar.
The prime minister of Iceland has already been dumped. Other government leaders have been embarrassed. Several countries have announced inquiries into the secretive world of offshore tax evasion. And public anxiety about the corrupt coddling of the world’s superwealthy “1%” is showing signs of turning into red-hot anger.
But we shouldn’t be surprised. It’s not as if we didn’t already know that the world’s political and business elites frequently cheat and steal, that our governments are swindled out of trillions of dollars of revenue and, as a consequence of this greed, the vast majority of people suffer from a painful culture of austerity so these freeloaders can get richer. We already knew that.
However, it is the disgusting detail contained in this week’s revelation of leaked documents that is so revolting — and, of course, the appalling fact that so much of this is technically “legal.”
With their own interests in mind, politicians and business leaders in many countries have worked quietly in the dead of night to make this so. The result is that, more than ever, taxes now appear to be primarily for the little people.
The documents come from an influential Panama-based law firm. They include 11.5 million internal records disclosing the financial secrets of heads of state, billionaires, drug lords, celebrities and others.
While expressing outrage at the part of the “Panama Papers” that represents tax evasion, Mr. Burman identifies that much of the revelations of the “Panama Papers” was the result of clear and deliberate government policies and laws. In other words, the story of the “Panama Papers” is mostly about “legal tax avoidance” and ” NOT illegal “tax evasion”. Therefore, it is entirely unreasonable and counterproductive to focus on “tax evasion” and exclude “tax avoidance” from the discussion. Nevertheless, when it comes to tax evasion …
Q&A on the "Panama Papers" – OECD https://t.co/1YnEZPXb2K – lack of info on beneficial ownership of entities is facilitating illicit flows.