Don’t Let Those Unnamed in the Panama Papers get off Easy

Even if no American names are in the Panama Papers, it would be a mistake to view this as the US being free of tax evasion; this scandal should be as much a reminder to America, as it is to the rest of the world, of the need for meaningful corporate reform.

The recent publishing of Mossack Fonseca’s documents has shed light on just how bad the global tax evasion problem and how broken the system that allows it to happen are (if you’re unfamiliar with the Panama Papers, check out NMZ Talk’s overview at http://nmztalks.tumblr.com/post/142913114360/behind-the-journalism-the-panama-papers). Though it may sound surprising, there is a fair chance that Americans will be mentioned little or not at all in these papers. However, this is no reason for Americans to give ourselves a pat on the back; it’s been estimated that in the US, about $2.1 is held in untaxable shell corporations. Tax evasion of any nature—even if not occurring in Panama—deprives citizens of schools, hospitals, roads, etc. and undermines democracy. The global trend in responding to the Panama Papers seems to be punishing the offenders; in the US, we need to go a step further. If we don’t treat this scandal as a wake up call to make substantial policy changes, we can expect this behavior to continue.

One of the many world leaders that had to face the consequences of his involvement was Iceland’s former Prime Minister, Sigmundur David Gunnlaugsson. Gunnlaugsson was forced to resign when confronted with masses of enraged, Icelandic protestors who demanded he step down from his position as Prime Minister. Other countries with leaders tied to the scandal, are beginning investigations in an effort to bring perpetrators to justices. Though this approach might create a façade of security through making examples of individual offenders, many nations—specifically the US—can’t afford to restrain themselves to this method alone if they strive to solve the tax evasion problem. Wealthy Americans—who commit the 3^rd highest amount of tax evasion than any other nationality—have other locations they’d prefer to hide their money than Panama. This is for good reason: Territories such as Bermuda, the Cayman Islands, and Singapore operate under a derivative of English common law and are viewed to be more politically stable. This gives American lawyers a sense of familiarity and confidence in their legal systems and their ability to navigate them. To make American tax evasion easier, utilizing the previously listed territories isn’t even necessary: Some of the best tax havens in the world are located right on US soil. Is it hard to believe that there are no American’s involved in the Panamanian tax fraud when they’re able establish a partially tax exempt, nearly impossible to trace, shell corporation in Delaware with less information than is required to obtain a library card? These thieves of the American economy deserve to be brought to justice but will never be if we rely solely on the Panama Papers to do so.

The release of the Panama Papers isn’t the first time attention has been called to the problem of tax evasion. World leaders gathered together in 2014 to discus the issue of tax avoidance and put the issue at “the top of their to-do lists”. However, since then no new policies have been put in place. Literally nothing has been done to resolve the problem: not because it’s not important, not because it can’t be done, but because those who control the system do not want it to be. The United States government could easily and effectively shut down all offshore tax havens by refusing these shell companies access to US banks, and it could require corporations in all states to be up to snuff registration wise. This clearly has not happened. Our government is ruled by the wealthy; wealthy people like the system just the way it is.

The wealthy and powerful in this country would prefer to pursue any Americans specifically named in the Panama Papers (if any arise), and leave it at that. They are not going to push for a public registry of corporation owners, transparency of international business transactions, or any other policy changes that get at the root of the bigger issue. Regardless of the quantity of American names associated with the Panama Papers, this scandal should be a wake up call as to who really controls the system we live in and what their motives are. As citizens, it is our duty to elect officials that represent our priorities, not those of people stealing from our economy, if we want to end tax evasion. This is not meant to be a subliminal endorsement for Bernie Sanders; rather, this is an appeal for Americans to support politicians like him to fill the seats in our congress as well as the oval office. Until then, future scandals like the Panama Papers will only result in more PR band-aids administered by those with no intention of solving the problem.