On November 5th, the Paradise Papers were made public by the German newspaper Süddeutsche Zeitung and the International Consortium of Investigative Journalists (ICIJ), a “global network of more than 200 investigative journalists in 70 countries.” The Paradise Papers refer to millions of documents that contain details about offshore financial transactions involving thousands of clients over the last seven decades. These documents were primarily hacked from the offshore firm Appleby, who helps clients funnel their money into trusts and so-called “tax havens,” allowing clients to evade higher taxes in their home countries. Some of these clients are well-known companies like Nike and Apple as well as high-profile figures including Wilbur Ross a member of President Trump’s cabinet.
Like the disclosure of the Panama Papers (also revealed by ICIJ) in 2015, the Paradise Papers is not new information. But it is concerning when nearly 80% of the offshore funds are coming from the top 0.1%, especially when financial capital is hidden away in locations beyond the government’s jurisdiction.
The Paradise Papers provide further evidence to the profit motive of the wealthiest people and corporations, and is a reminder that the wealthy do not wish to contribute their obligations towards the common good. Although the ultra-wealthy can avoid paying their due, they cannot avoid disapproval of their self-serving actions.
The consequences of large-scale tax evasion are not difficult to imagine. Tax evasion makes the government spend more, which contributes to America’s increasing budget deficits. With potentially billions of dollars lost in tax revenue, widespread problems such as infrastructure and mental health (for many population groups) will continue to plague the people.
As the wealthy serve their financial interests, the poor will inevitably suffer. Those at the bottom of the class system cannot achieve upward social mobility, which is restrained by tax evasion and other rich-people decisions that choke the poor of programs and funds that aim to support them. Therefore, today’s troublesome economic circumstances should compel voters and politicians to decide whether it is okay for the ultra-wealthy to continue evading taxes.
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