We don’t need Panama — the US is home to lots of sleazy tax havens


250,000 American corporations hide in this building

The single-story brick building at 1209 North Orange St. in downtown Wilmington, Del., looks bland and innocuous. But the building, home to the Corporation Trust Company, has an intriguing claim to fame. In the last few years, it has served as the registered address for more than 250,000 businesses, giving companies around the world access to Delaware’s business-friendly laws.

During his 2008 presidential campaign, Barack Obama criticized Caribbean tax havens. He mentioned one building in the Cayman Islands that is the registered home of more than 12,000 U.S.-based corporations, saying, “That’s either the biggest building in the world or the biggest tax scam on record.” But as the example of 1209 North Orange St. demonstrates, the same activity is going on in President Obama’s backyard.

A massive leak of confidential documents from Mossack Fonseca, a law firm in Panama that helped wealthy clients set up anonymous companies in tax havens, is highlighting how the global offshore industry secretly invests massive amounts of wealth around the globe. The 11 million leaked documents cover 40 years of the law firm’s operations and allegedly touch on the financial dealings of 12 current or former heads of state, as well as 60 more people linked to world leaders.

The documents…show connections between offshore accounts set up by Mossack Fonseca and money laundering, bribery and tax evasion, among other charges…

But one of the least recognized facts about the global offshore industry is that much of it, in fact, is not offshore. Indeed, some critics of the offshore industry say the U.S. is now becoming one of the world’s largest “offshore” financial destinations…

Offshore isn’t so much a destination anymore as “a set of capabilities,” which include ensuring secrecy, minimizing taxes, managing assets, and providing clients security and access to their wealth from anywhere in the world…The Tax Justice Network ranks the U.S. third in terms of the secrecy and scale of its offshore industry, behind Switzerland and Hong Kong but ahead of the Cayman Islands and Luxembourg…

Responsible politicians in equally responsible countries are setting up regulations to stop the illegitimate uses of shell corporations, e.g., money laundering for criminals and terrorists, fraud, tax avoidance, etc.. No one is surprised at the difficulty encountered trying to get similar efforts through Congress.

RTFA for the details and designs. Think about nudging your Congress-critter to show a little gumption and stand up to corporate class tax fraud.

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