Steve Mahoney: What are the Panama Papers?

aThe Panama Papers have been making headlines this week, but what exactly are they and what might be their potential implication?

About a year ago, an anonymous source contacted the German newspaper the Suddeutsche Zeitung, and provided them with 2.6 terabytes of documents from a Panamanian law firm, Mossack Fonseca, which specialized in selling anonymous shell corporations that help the rich hide business dealings and avoid paying taxes, according to a Suddeutsche Zeitung report.

The German paper reports that this is the largest leak to journalists, ever. The paper is working alongside the International Consortium of Investigative Journalists to process the information and bring secrets to light.

bSo far, the papers have implicated world leaders such as Russian president Vladimir Putin, prime minister of England David Cameron, and the now former prime minister of Iceland, who resigned after he was tied to the leaks, according to The Guardian. Many others have been implicated, from the president of China to members of crime families like the Japanese Yakuza. This is only the tip of the iceberg and there surely will be more names to come.

It is important to point out that in many cases these shell corporations are not illegal, but unethical if you subscribe to the belief that people have an obligation to pay taxes to the country where the money was made.

There are about 3,500 people with addresses in the United States who have been implicated, but they may not all be U.S. citizens, the New York Times reported. The Times says that it is fairly easy to set up a shell corporation in the United States, so many Americans don’t need to go to Panama to hide their money.

The Panama Papers is just another event that highlights why income inequality is increasing and the lengths the rich will go to avoid paying their fair share in taxes. Hopefully these revelations lead to something, but they more than likely will not.

 

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