Huffington Post reporter Zach Carter did a most unusual thing when reporting on Panama being a tax haven. He called up one of the many firms offering to help him hide his money from the IRS for $2,000 dollars and filmed it.
What is it about trade that silences cable news? Beyond silence, we see article after article pimp for these deals, quoting biased fictional lobbyist white papers, often spun out by the U.S. Chamber of Commerce.
It's astounding how most of the press ignores trade facts. What is it about the never ending trade deficit they don't understand?* Over and over statistics have proved trade deals are glorified offshore outsourcing agreements. Yet in spite of the results, the same incorrect math is routinely reported as fact, even when Panama's tax haven business is well known. Even the GAO has reports on Panama as a tax haven country:
A majority of the largest publicly-traded companies and federal contractors in the United States use multiple subsidiaries in offshore tax havens to conduct business. Dorgan and Levin, who have focused on combating offshore tax abuses causing an estimated $100 billion in lost U.S. tax revenues each year, point out that many of these companies are paid with taxpayer dollars and some have also received billions of dollars in taxpayer bailout funds.
This report shows that some of our countrys largest companies and federal contractors, many of which are household names, continue to use offshore tax havens to avoid paying their fair share of taxes to the U.S. And, some of those companies have even received emergency economic funds from the government, said Senator Dorgan. I think we should take action to shut down these tax dodgers and we will be introducing legislation to do just that.
Senator Levin said, We need to put an end to the use of offshore secrecy jurisdictions as tax havens. We must get to the bottom of activities such as the following: Citigroup has set up 427 tax haven subsidiaries to conduct its business, including 91 in Luxembourg, 90 in the Cayman Islands, and 35 in the British Virgin Islands. Hundreds more tax haven subsidiaries operate under strict secrecy laws in places like Switzerland, Hong Kong, Panama, and Mauritius.
Public Citizen as well as others have been sounding the alarm bells the Panama free trade deal will undermine U.S. Efforts to Stop Offshore Tax Haven Abuse and Regulate Risky Financial Conduct:
The FTA (free trade agreement) does not directly or indirectly remedy Panama’s problems with tax evasion and money laundering. There are no special requirements that take into consideration, much less try to counter, Panama’s banking secrecy rules, lax financial service regulations or designation as a venue for money laundering and tax evasion. In fact, if the Panama FTA were adopted, it would make these matters of bipartisan concern worse, by:
- Forbidding U.S. policies from treating Panama and Panamanian financial services and transactions differently than we treat those of non-tax- haven countries.
- Forbidding use of limits on financial transactions, except for very limited circumstances, which is a key tool in many anti-tax-haven and anti-money laundering policies.
- Locking in U.S. “market access” rights for banks and investors operating in Panama, regarding both cross-border services and establishment of U.S. facilities that would limit the U.S. government’s ability to fight tax-haven abuse and re-regulate financial service firms.
- Granting expansive new FTA foreign investor rights to Panamanian firms and the 350,000 subsidiaries of U.S., Chinese, and other multinational firms operating in Panama that will allow them to challenge U.S. government regulations in foreign tribunals – including policies that limit financial transactions from banks operating from Panama or owned by Panamanian investors.
Let's see, we just had a global financial crisis with round two turning into a global economic malaise and too low taxes creating deficits the size the world has never seen since WWII. The situation is so bad, billionaires still loyal to the nation are begging to be taxed.
Eliminating offshore tax loopholes could save U.S. taxpayers $210 billion over the coming decade, according to the Office of Management and Budget (OMB). Meanwhile, the Senate Homeland Security Committee estimates a savings five times as great. These funds would assist greatly in helping put people back to work amidst the deepest recession in the post-war period.
The Huffington Post reporters started their story out right in pointing out the absurdity of Obama claiming he wants to roll back Bush tax cuts to the wealthy. A great rhetorical on closing loopholes on tax incentives to offshore outsource your job echos the airwaves, all the while opening the back gate for corporations and the super rich to avoiding paying any taxes whatsoever and topping it off by closing any recourse the United States has to do anything about it.
President Barack Obama reaffirmed his commitment to raising taxes on the wealthy. But as he pushes to get the rich to pay more into federal coffers, Obama is also urging Congress to approve a trade agreement that would cement a key tax avoidance tactic deployed by some of the richest Americans.
*Dylan Ratigan exempted of course.