Panama Papers

[Blah Blah]

I don't think anyone is at all suprised to see any of this or those names on the lists.

The question is what do we do about it when so many 'masters of the universe' are involved, including those in top level politics.

Even if Cameron doesn't beneift from it now, his privileged upbringing certainly did. Does he have any defense when HMRC go after ordianry people with a vengence, and 'we are all in it together' sounds more hypocritical than it ever has.

[Loz]

The Guardian makes me laugh, with its constant "mind you, there are many good, legitimate reasons to move business offshore" disclaimers.

Getting the excuse in early...

[malumbu]

Trouble is as much as I want to capitlise on this, the story is coming with one hell of a slant/agenda.

[Blah Blah]

The media response has been interesting to say the least. There is definitely a sense of closing ranks in some quarters. I saw Toby Young even trying to say it was really a non issue on BBC news - incredible!

And of course, this firm is just one of many accross the world doing the same thing. Trying to even imagine how much tax has not been paid from all of that wealth is mind boggling. Even the Brinks Mat bullion ended up there!

I do think it's just part of a wider problem around finance and secrecy. Loretta Napoleoni, in her book 'Terror Inc' talks about this and how much money for both rogue governments and terrorist organisations sits in Swiss banks accounts for example.

It's going to take a global solution and a massive reform of bankng and accounting practise to wipe all of this corruption out. I think the UK has 13 territories that operate as tax havens, so a massive part of the industry. we'd have to impose direct rule to shut them down, but don't because there are other places the money can go. It's all rather depressing.

[Loz]

malumbu Wrote:

-------------------------------------------------------

> Trouble is as much as I want to capitlise on this, the story is coming with one hell of a slant/agenda.

The Graun's headline on Simon Cowell being a case in point today. Read the story and you find that his accountant created two companies in order to buy some property in Barbados. In the end he didn't use ever them and they are now dormant.

But it did mean they could rather dishonestly squeeze Cowell's name into a headline. However much a non-story it was.

[Seabag]

Be honest, if you're rich enough, you would

I would, if I could

Am I sorry , no!

[Blah Blah]

That's why the only way to deal with it Seabag, is to not make it possible in the first place.

[Jeremy]

IMO it's ethically equivalent to the plumber who asks to be paid cash, or the IT contractor who avoids tax by paying himself dividends. Almost everyone who can, does - so to blame the individuals seems rather pointless. Like BB says.. you need to close down the loopholes...

[miga]

In my view, it boils down to the difference between what's legal and what's moral. I actually think there are many who could be wildly inventive about their taxes and save a packet, but for moral reasons choose not to do so. As morality is relative, or indeed absent as a factor in decision making in some cases, there are also many who merely do the most efficient legal thing possible. So a game of cat and mouse ensues.

[LondonMix]

It isn't equivalent because using offshore structures isn't illegal unlike what the plumber is doing. In fact, the only reason it works is because this country (as is the case with most countries) have specific tax treaties with certain offshore jurisdictions that make the entire structure work.

It is more equivalent to the self employed person taking dividends-- and every self employed person I know does that. No one pays more tax than they are legally obliged to.

The only solution if you don't like the status quo is to end all of the treaties but that would need to be done by not just the UK but every country globally to have the desired effect.

Jeremy Wrote:

-------------------------------------------------------

> IMO it's ethically equivalent to the plumber who

> asks to be paid cash, or the IT contractor who

> avoids tax by paying himself dividends. Almost

> everyone who can, does - so to blame the

> individuals seems rather pointless. Like BB says..

> you need to close down the loopholes...

[Earl Aelfheah]

Jeremy Wrote:

-------------------------------------------------------

> IMO it's ethically equivalent to the plumber who

> asks to be paid cash, or the IT contractor who

> avoids tax by paying himself dividends. Almost

> everyone who can, does - so to blame the

> individuals seems rather pointless. Like BB says..

> you need to close down the loopholes...

There are plenty of people who chose not to avoid tax believe it or not.

[Earl Aelfheah]

LondonMix Wrote:

-------------------------------------------------------

> It isn't equivalent because using offshore

> structures isn't illegal unlike what the plumber

> is doing. In fact, the only reason it works is

> because this country (as is the case with most

> countries) have specific tax treaties with certain

> offshore jurisdictions that make the entire

> structure work.

>

> It is more equivalent to the self employed person

> taking dividends-- and every self employed person

> I know does that. No one pays more tax than they

> are legally obliged to.

>

> The only solution if you don't like the status quo

> is to end all of the treaties but that would need

> to be done by not just the UK but every country

> globally to have the desired effect.

>

> Jeremy Wrote:

> --------------------------------------------------

> -----

> > IMO it's ethically equivalent to the plumber

> who

> > asks to be paid cash, or the IT contractor who

> > avoids tax by paying himself dividends. Almost

> > everyone who can, does - so to blame the

> > individuals seems rather pointless. Like BB

> says..

> > you need to close down the loopholes...

I agree that the loop holes need to be closed. It is not true however that everyone who can avoid tax does. Many people take a principled position on it.

[LondonMix]

There a plenty of people who don't break the law rahrahrah but everyone uses legal ways to minimize their tax bill. Paying dividends from your company is really no different than investing in a tax free ISA.

Some people's behavior might seem morally wrong to you but the reality is they are simply using government set up structures and policy like everyone does.

[Earl Aelfheah]

I thought this was an interesting early response to the leak. Notice that many of the predicted responses have been trotted out: http://waitingfortax.com/2016/04/04/some-thoughts-on-the-panama-papers/

[*Bob*]

Jeremy Wrote:

-------------------------------------------------------

> IMO it's ethically equivalent to the plumber who

> asks to be paid cash, or the IT contractor who

> avoids tax by paying himself dividends. Almost

> everyone who can, does - so to blame the

> individuals seems rather pointless.

Only your plumber doesn't use his ill-gotten gains to send his son to Eton, then on to Oxford - ushered through on a velvet cushion into a world fettered with access, contacts, privilege.. all the way up to the highest seat in the land where he sees fit to lecture others about fairness, equality and (all together now) 'all being in it together'.

'Does' Cameron benefit from his father's dubious dealings is moot point - he already 'has'.

[LondonMix]

It might seem trite but its true. There is a difference between acting legally and illegally. If you want people on mass not legally reduce their tax bill you have to change the laws that allow and induce them to do so. Trying to plead to some moral duty would be as effective as telling an average person not to put money in an ISA because the government needs more tax revenue. It would seem absurd, because it is absurd.

rahrahrah Wrote:

-------------------------------------------------------

> I thought this was an interesting early response

> to the leak. Notice that many of the predicted

> responses have been trotted out:

> http://waitingfortax.com/2016/04/04/some-thoughts-

> on-the-panama-papers/

[Earl Aelfheah]

LondonMix Wrote:

-------------------------------------------------------

> There a plenty of people who don't break the law

> rahrahrah but everyone uses legal ways to minimize

> their tax bill. Paying dividends from your

> company is really no different than investing in a

> tax free ISA.

>

> Some people's behavior might seem morally wrong to

> you but the reality is they are simply using

> government set up structures and policy like

> everyone does.

There is a world of difference between a tax free ISA and some of the more complex tax avoidance which takes place (which whilst not in breach of the letter of the law, is clearly not in the spirit of it). It is simply not true that 'everyone does it'. Plenty of people decide to pay more than they strictly have to, because they don't want to get involved in lawful, but unprincipled avoidance strategies. I guess you'll just have to take my word on this.

[Earl Aelfheah]

LondonMix Wrote:

-------------------------------------------------------

> It might seem trite but its true. There is a

> difference between acting legally and illegally.

> If you want people on mass not legally reduce

> their tax bill you have to change the laws that

> allow and induce them to do so. Trying to plead

> to some moral duty would be as effective as

> telling an average person not to put money in an

> ISA because the government needs more tax revenue.

> It would seem absurd, because it is absurd.

Tax free ISAs were created for the purposes of encouraging saving. They are intentionally and explicitly set up for the purposes of not paying tax on savings. Putting money in a cash free ISA complies with not only the letter of the law, but the spirit of it. Putting money into an ISA is completely different to off shoring money in Panama. The key point of that article is this:

"What Panama has offered ? its USPs in the competitive world of tax havenry ? is an especially strict form of secrecy, a type of opacity of ownership, and (if the reports of backdating are correct) a class of wealth management professionals some of whom have especially compromised ethics.

You go to Panama, in short, because, despite its profound disadvantages, you value these things.

And the question you should be asking is, what is it about this Mr X or that Mrs Y and his or her financial affairs that causes them to prioritise secrecy or opacity or (if the reports are correct) ethically compromised professionals above all else?

Perhaps it is not because the behaviour is criminal: tax evasion or money laundering or public corruption. Perhaps it is not. But ? and especially in the case of Panama ? very possibly it is."

I agree that the law needs to be tightened. To imply that anything which is lawful is necessarily moral however, is quite different.

[LondonMix]

How can you say that though? These tax treaties specifically exist the reduce tax so saying they are not in the spirit of the law is patently untrue.

Its more complicated to set up than an ISA but its no less clear what the purpose is. In fact, many corporations get tax rulings from the tax authorities to specifically ensure that the structures they are using are not seen as avoidance. These types of structures are used by state investment entities in addition to private investors.

I don't think you realize how complicit the tax authorities themselves are in the system that currently exists globally.

[LondonMix]

With all that said, I'm not saying that the system should remain as is. That's a totally different question.

[Parkdrive]

I see people mentioning agendas on here. Does it really matter? The points is you have the likes of Cameron telling us he will aggressively pursue corporations and individuals not paying tax yet his own family are guilty. There is no, nor has there been, political will to close the loop holes. Sod agenda if you're a greedy bastard trying to hid your wealth inappropriately or even illegally , then name and shame the fcukers.

[Earl Aelfheah]

I think it's an individual judgment. My point is simply that it is not true that given any opportunity to reduce one's tax burden, 'everybody would'. Plenty of people have turned down opportunities to reduce their tax because schemes seem less than straight forward and (although legal) morally dubious.

And again, I point to the final line in that article which I think it the whole point:

"Perhaps it is not because the behaviour is criminal: tax evasion or money laundering or public corruption. Perhaps it is not. But ? and especially in the case of Panama ? very possibly it is."

[miga]

> I agree that the law needs to be tightened. To

> imply that anything which is lawful is necessarily

> moral however, is quite different.

Exactly - if most people behaved (and not just with regards to tax) on the principle that your only obligation is to act legally to the (sometimes twisted) letter of the law, this society would be awful. Similarly, not every breach of law is immoral in my view. But, as I said earlier, morality is relative, as shown on this thread. For lots of people "legal = moral = ethical".

Things that lay people do, like putting their money in ISAs, or pensions, to save on tax are to the spirit of the law - people are deliberately encouraged as a policy to save, for retirement or otherwise.

Also - if the plumber or handyman wants cash, you can't infer that they're avoiding tax (they may not be obliged to pay VAT, they may want to avoid the inconvenience of bank fees, credit cards etc.).

[LondonMix]

Rahrahrah-- I agree that there are people actually committing crimes and laundering money. It should be investigated who they are and they should be prosecuted.

The point I was making to Jeremy is that people legally using existing tax law are unlikely not to do so unless the law changes. You think these people are morally bankrupt and I think these people are like most people on earth, neither good nor bad.

I was simply drawing the distinction regarding the plumber that few people will knowingly break the law compared to those that simply use the law as its intended to their advantage.

[*Bob*]

I don't know about anyone else (who's self-employed) but every time I read another story like this I ram another eight things through expenses I might have previously have been in two minds about.