The Perplexing Problems of the Panama Papers

Recently, twitter, Facebook, and other social media platforms, as well as every major news outlet have been focused on the recent groundbreaking revelations brought to light in the Panama Papers. The information leaked by the previously unheard of Panamanian law firm, Mossack Fonseca, have shaken world politics to the core. From the implication of British PM David Cameron and various close friends of Vladimir Putin, to the resignation of a world leader, the lightning storm brought down on the fiscal world by the Panama Paper revelations is just beginning.

What are the Panama Papers?

The Panama Papers are a series of papers leaked to Wikileaks by an unknown source that implicate various athletes, politicians, and public figures in tax sheltering schemes. The papers demonstrate how easily it has been for the wealthy to conceal their finances from any form of government taxation by opening shell corporations in more tax-friendly countries. The papers have tied individuals and corporations to potential bribery, money laundering, and various other forms of crime and corruption.

What is their relevance to you?

The first thing world economists notice when they peruse the information contained in the Panama Papers is that, of the eleven and a half million documents published and more than two hundred countries mentioned, only around two hundred individuals with ties to America are identified. Since our government is one of the most corrupt in the first world, it would stand to reason that numerous wealthy individuals would have used shell corporations to aid them in tax avoidance or other, more criminal ventures.

But why didn’t we hear about any of them?

There are a few possible explanations being thrown around by economists, and none of them shine a kind light on our government.

World famous whistleblower, Bradley Birkenfeld, believes the most likely explanation to be that the CIA itself is the leaker. Considering that the vast majority of high profile leak victims are Chinese officials and Russian friends of Putin, it is a small step to come to the conclusion that the end goal was to put pressure on communist rivals of the continental United States.

Of course, if this is true, then in doing so we have thrown various allies (like David Cameron) under a very large bus and then pretended we had nothing to do with it. It is likely that, if the CIA is the leaker, that the British PM was merely collateral damage.

After the Snowden leaks, it should be apparent to government agencies that acting in such a shady fashion is absolutely unacceptable. Notwithstanding the fact that it puts us at odds with some of our most important allies.

The alternative is that there simply aren’t many American citizens using offshore tax shelter corporations.

This doesn’t necessarily mean that our rich folk are squeaky clean though.

It actually means quite the opposite.

If Americans are not using shell corporations, it is less likely that they are doing it because they prefer fluffy bunnies and rainbows, and more likely that they are doing it because our own country’s tax laws are so broken that there are various states in which opening a shell corporation is even easier than doing it out-of-country.

In fact, many of the shell corporations founded using the aid of Mossack Fonseca were established inside the United States, in states like Florida, Wyoming, and Nevada where the process is laughably simple.

The Panama Papers shine light on the seedier aspects of the financial world outside of the United States. Indirectly, however, they also make it very evident just how corrupt our own system actually is. These shell corporations have been connected, largely, with corrupt career politicians – the type of politician that is ever popular in the American electorate system.

The only way to prevent this sort of shady dealing is to stop voting for democratic and republican interests. Vote for an independent who is transparent, capable, and honest. Vote for Art Drew.