In 2017, leaked documents — The Paradise Papers — were another reminder of how the rich and privileged use tax havens and complex, multinational schemes to hide assets and avoid taxation.
The New York Times reported:
The core of the leak, totaling more than 13.4 million documents, focuses on the Bermudan law firm Appleby, a 119-year old company that caters to blue chip corporations and very wealthy people. Appleby helps clients reduce their tax burden; obscure their ownership of assets like companies, private aircraft, real estate and yachts; and set up huge offshore trusts that in some cases hold billions of dollars.
Like the Panama Papers, Paradise Papers were first given to German newspaper Süddeutsche Zeitung and then shared with International Consortium of Investigative Journalists and its worldwide network of associates.
Leaked materials showed ultra-high-net-worth individuals and organizations were moving income to no-tax jurisdictions and shrouding monetary transactions and wealth accumulations in near-impenetrable secrecy. Most were subverting financial asset regulations of home countries.
Listed in the papers were entertainers, oligarchs, political leaders and corporations familiar to everyone. Three former Prime Ministers of Canada and Stephen Bronfman, Justin Trudeau’s top fundraiser, were named. So were the United Kingdom’s current and future monarch.
Many of the individuals were in positions of authority that enabled them to help shape laws that ensure tax haven use is wildly profitable. Media owned by billionaires teach common folk that these schemes are legitimate and criticism is unwarranted.
Dartmouth Professor Brooke Harrington is the author of Capital without Borders: Wealth Managers and the One Percent:
There is this small group of people who are not equally subject to the laws as the rest of us, and that’s on purpose. These people live the dream of enjoying the benefits of society without being subject to any of its constraints.
Social scientist Harrington had first hand experience of being threatened for researching international wealth management and knew the industry was closed to inquiries from researchers. She noted a case where a Newsweek journalist was deported from Jersey for reporting on that tax haven and was banned from re-entering the island, or any part of the U.K.
A research fellowship relieved Professor Harrington temporarily from teaching and administrative responsibilities. Using that freedom, she trained to be a wealth manager, noting:
In designing my own research strategy, I was particularly inspired by the work of John van Maanen—now a professor at MIT’s Sloan School of Management—who famously did his doctoral research on a California police department in the early 1970s, not long after the Watts riots. In this period of heightened anti-police sentiment, van Maanen found himself shut out: He received over 20 rejections to his requests to study police departments as an outsider looking in.
But rather than giving up and picking another subject for his research, van Maanen did something extraordinary: He enrolled in the police academy and underwent the full training process to become a police officer, including going out on armed patrols. Only then did he build enough trust and cooperation with fellow officers to conduct his research.The Atlantic
With Trust and Estate Planner qualification (TEP) in hand, Harrington found doors opening. She immersed herself in an unprecedented study, gained insights into the management of vast pools of capital, and found:
There was also something bigger, and even more disturbing: a domain of libertarian fantasy made real, in which professional intervention made it possible for the world’s wealthiest people to be free not only of tax obligations but of any laws they found inconvenient.
Categories: Tax Evasion & Avoidance