The thing is that: using offshore tax havens isn't corruption. It's legal.
Corruption is when you use your position or influence in the government to help yourself. (Often by helping someone else who then gives you kickbacks somehow.)
It's legal because, as noted by Adam Smith: "Wealth, as Mr Hobbes says, is power."
The rich write the laws. In many cases here, the rich are the law.
And as John Doe (the Panama Papers leaker) wrote in his manifesto this weekend:
The prevailing media narrative thus far has focused on the scandal of what is legal and allowed in this system. What is allowed is indeed scandalous and must be changed. But we must not lose sight of another important fact: the law firm, its founders, and employees actually did knowingly violate myriad laws worldwide, repeatedly. Publicly they plead ignorance, but the documents show detailed knowledge and deliberate wrongdoing. At the very least we already know that Mossack personally perjured himself before a federal court in Nevada, and we also know that his information technology staff attempted to cover up the underlying lies. They should all be prosecuted accordingly with no special treatment.
>It's legal because, as noted by Adam Smith: "Wealth, as Mr Hobbes says, is power."
No.
It's legal because it's a reasonable and morally acceptable thing to do. You put money in an offshore account, then pay tax in your home country. No moral or legal problems there. There are many valid and morally acceptable reasons for doing this.
The problem is when people don't pay the taxes in their home country.
> There are many valid and morally acceptable reasons for doing this.
In order for all of us to stay focused on Panama leaks, can you please specify just the most common reasons for putting money in Panama? If you don't know which most common reasons are, then please at least those which you'd believe were most common, among "many"? Thanks in advance.
An offshore location sets up it's laws to simplify the taxation and legal issues, like a nice API joining complex systems.
Funds are set up in offshore locations to cut the "gordian knots" of tax and securities laws, within a stable country that has skilled legal and administrative infrastructure.
Taxation and securities laws for direct investment between different countries/states are complex, often unfair, and can change unpredictably.
The fund also needs to avoid getting taxed unfairly and other liabilities. For example countries have laws that would tax the whole fund if one citizen is a minor investor (which is why a fund in say Delaware might only accept foreign investors). Dual citizenship is another hideous complexity.
Some locations or funds allow countries to "look into" investments by their citizens and corporates, so are not necessarily secret at the government level.
> [Using offshore tax havens] may or not be legal, I'm pretty sure a lot of the people in the list are using for Tax Evasion.
Nope. The majority of the information contained in the Panama Papers does not pertain to any illegal activity[0] (tax evasion is illegal).
And even of the information that provides evidence of illegal activity, most of it is illegal for reasons that have nothing to do with taxation. Some of the information does point to transactions that were otherwise illegal (such as drug cartel money), but that is in the minority of the information leaked.
Using offshore tax havens isn't illegal in se. And in fact, most uses of offshore tax havens aren't going to be illegal, because if you're going to do something illegal (tax evasion), why bother to use an offshore tax haven? The whole point of using an offshore tax haven is to to reduce tax liability through legal means[1].
[1] Not to be confused with the goal of using hard-to-trace offshore bank accounts to (e.g.) launder drug money or money obtained through bribery, which is illegal but has nothing to do with taxes.
The thing is that: using offshore tax havens via an expensive law firm as a private person is not illegal per se, but in 99.9% of cases is used to hide illegal activities - most odiously straight-out looting of a country's public finances by officials (like in Russia), but also pedestrian crimes against the public like tax evasion or receiving bribes, or the fraudulent hiding of assets from civil affairs like bankruptcy or divorce proceedings.
>99.9% of cases is used to hide illegal activities
Do you have any evidence to back up that 99.9% statistic? Even many of the public disclosures haven't been illegal (for example David Cameron's investment fund was 100% legal and he paid all the UK taxes required).
Corruption is when you use your position or influence in the government to help yourself. (Often by helping someone else who then gives you kickbacks somehow.)