The Panama Papers leak proves what middle-class Americans have been saying for decades: ultra-wealthy individuals and corporations are doing everything they can to avoid paying their fair share in taxes, even as they take advantage of the public services and infrastructure that benefit us all.
The Panama Papers, leaked to the media and published April 3, are about 11.5 million documents with confidential information about more than 214,000 offshore companies. They include the names of shareholders and directors of companies and show how wealthy individuals hide their assets from public view, not always for illegal purposes but often to avoid paying taxes.
Many of those implicated are foreign leaders, but the fact is that U.S. citizens trying to hide their assets don’t have to go to Panama – they can establish a shell corporation here at home. In some places in the United States, it is easier -- and nearly as cheap – to get a fishing license than to register a shell company.
What the Panama Papers show is that money to support our schools, hospitals, prisons and other public services is available, just hidden. There’s no justification for politicians who balance state budgets on the backs of public workers and outsource public services, while doing nothing to prevent the ultra-wealthy and corporations from squirreling away their taxable income.
President Obama introduced new rules to narrow the loopholes that permit “inversion,” when a U.S.-based multinational corporation merges with a foreign one in a low-tax nation to pass itself off as foreign and cut its American taxes.
Just two days after the Obama administration announced the new rules, Pfizer’s merger with Allergan (a drug company based in Ireland) was dropped. It would have been the biggest tax-avoidance deal in the history of corporate America.
But Obama can only do so much. It will take action by Congress to effectively prevent these tax avoidance schemes to continue.
We all benefit from the public services and infrastructure that make our country great, but not all of us pay our fair share. As tax deadline approaches this April 18, the Panama Papers serve as an important reminder that the wealthiest 1 percent are still not paying their fair share.