The Atlantic reports;
I did nothing wrong. That’s the gist of how many individuals connected with the “Panama Papers”—the millions of leaked documents exposing how a Panamanian law firm, Mossack Fonseca, helped the rich and powerful park their wealth in tax havens and offshore bank accounts or shell companies—are responding to the revelations this week. And in many cases, they may be telling the truth. As The New York Times points out, “Holding money in an offshore company is generally not illegal, although such financial arrangements can be used in illegal ways—for example, to facilitate tax evasion or money laundering.”
Wear a ski mask around town on a warm day, perhaps for a perfectly good reason (you’re a celebrity trying to avoid paparazzi, you ran out of sunscreen), and you’ll probably invite suspicion. Because it looks like you might rob a bank.
The release of the Panama Papers is a bit like the end of The Truman Show, the 1998 film about a man, Truman Burbank, who gradually realizes he’s spent 30 years on the set of a reality TV show in which he’s the star. In the last scene, Truman is sailing a boat when its bow pierces the artificial sky—hinting at a world beyond the show’s set. The leaks, from just one law firm in one country, have similarly pierced the screen that normally conceals a vast network of financial secrecy. But on the other side, there’s a much bigger world that, for most people, remains unexplored.
And this elite world has an impact on the world your Average Truman inhabits. In a report earlier this year, the British charity Oxfam argued that the use of tax havens by individuals and corporations is contributing to growing economic inequality around the world. It cited a finding by Gabriel Zucman, an economist and the author of The Hidden Wealth Of Nations: The Scourge Of Tax Havens, that $7.6 trillion, or 8 percent of individual financial wealth in 2014, is held in offshore tax havens, resulting in $190 billion in lost annual tax revenue for governments from Africa to Latin America. (Zucman estimates that roughly 80 percent of offshore funds aren’t reported to tax authorities and that the amount of money in tax havens has been increasing in recent years; other experts claim that the amount of private offshore wealth may be two to four times as high as Zucman’s figure of $7.6 trillion. Needless to say, measuring the size of an industry whose purpose, in part, is to obscure its size isn’t easy or precise.)
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