Sprinkles from the Left

⏰🚀 Ready, Set, Go: These opinions take 1.56 minutes to read.

“For all the remarkable revelations about the shadow global financial system for wealthy individuals and businesses since the ICIJ’s first revelations in 2013, it’s striking how little has changed.

Measures to wind back this system seem ineffectual at best. Eight years have passed since governments promised coordinated action to crack down on the use of offshore structures to minimize corporate taxes and starve states of revenue, but if anything the movement has been in the opposite direction…

Ultimately, the problem lies with the unrestrained capital flows that have moved around the globe since the decline of the Bretton Woods system in the 1970s. While capital can move across borders without restraint, a small portion of that money will always be available to those who want to keep their wealth out of the hands of legal or tax authorities.

The world’s financial architecture is only tentatively starting to contemplate whether the opening of capital accounts — and the loss of monetary independence or exchange-rate stability that inevitably results — has been a good deal, or a devil’s bargain. If governments want to address the cause of tax avoidance rather than apply endless Band-Aids to the symptoms, that decision must ultimately be revisited.”

–David Fickling, Bloomberg Opinion

“This week we are closely watching the disclosures emerge from the Pandora Papers, a massive leak of secret data about the illicit financial activities of the super-wealthy from 200 countries…

U.S. citizens are under-represented in these leaks, largely due to where the service providers are located. No U.S. wealth-advisory firms were part of the leaks. Nonetheless over 700 companies revealed in the Pandora papers have ties to beneficial owners connected to the United States…

The Pandora Papers show that the U.S. and states like South Dakota now rival notoriously opaque jurisdictions in Europe and the Caribbean in financial secrecy. The states with the most active trusts revealed in the files were South Dakota (81), Florida (37), Delaware (35), Texas (24), and Nevada (14).

Findings suggest that South Dakota has sheltered billions in wealth linked to wealthy individuals previously accused of serious financial crimes and labor violations… The reason global money is flowing to the “Mount Rushmore State” is because of their low taxes and advantageous dynasty trusts.

The Pandora Papers will hopefully give a boost to the US Congress in passing a progressive tax plan to fund the Build Back Better program—and that includes money for IRS enforcement to ensure the wealthy pay their fair share.”

–Chuck Collins, Common Dreams

Sprinkles from the Right

⏰🚀 Ready, Set, Go: These opinions take 1.53 minutes to read.

“His secret girlfriend has lots of secret wealth.

Russian President Vladimir Putin’s longtime mistress has an estimated net worth of $100 million in “shadow wealth,” including swanky apartments and a yacht, despite her modest background, a trove of newly leaked documents reveal.

Svetlana Krivonogikh, 46, has been romantically linked with the Russian strongman since he was still deputy mayor of her hometown of St. Petersburg, and reportedly has a daughter with him…

Krivonogikh is far from alone in benefiting from a long-standing relationship with Putin.

For years Russia’s inner circle has gravitated to Monaco, where lax tax laws and policies have made the waterfront city a favorite for the wealthy…

“It has become Moscow-on-Sea. The mentality is to show off,” local lawyer Dominique Anastasis told the Guardian. “Nobody asks where your money comes from. There’s no culture of checking. You don’t make a tax declaration”…

Putin has denied ties to the lucrative companies detailed in the Pandora Papers.

But jailed Russian opposition leader Alexei Navalny has referred to Putin as “the world’s richest man.””

–Jorge Fitz-Gibbon, New York Post

“Hundreds of world leaders, politicians, billionaires and celebrities have used secretive offshore bank accounts and shell companies to hide billions of dollars from tax authorities in their countries, according to leaked documents called the “Pandora Papers” that were analyzed in an investigation carried out by 150 media outlets across 117 countries…

Suprising Fact: While many of the alleged shell companies and offshore accounts are located in places like the British Virgin Islands, Seychelles, Hong Kong and Belize, the Washington Post noted that the most “troubling revelations for the United States” centered around the complicity of some U.S. states in the offshore economy… South Dakota, Nevada and others have adopted financial secrecy laws that rival those of several infamous tax-havens. The papers show that a former vice president of the Dominican Republic finalized several trusts in South Dakota to store his personal wealth and shares of one of the country’s largest sugar producers…

Crucial Quote: Reacting to the Pandora Papers’ revelations, Oxfam International, a British consortium of charities, said: “This is where our missing hospitals are. This is where the pay-packets sit of all the extra teachers and firefighters and public servants we need. Whenever a politician or business leader claims there is ‘no money’ to pay for climate damage and innovation, for more and better jobs, for a fair post-COVID recovery, for more overseas aid, they know where to look.””

–Siladitya Ray, Forbes