April 5, 2013 12:00 pm
“No one knows for certain how much of the planet’s private wealth is parked in tax havens,” says the CBC. “One estimate is that there’s $32 trillion stashed offshore; a more conservative calculation puts it at a minimum of $8 trillion. Either way, that means tens – if not hundreds – of billions of dollars in lost tax revenues for the world’s governments.”
A massive investigate project by the International Consortium of Investigative Journalists saw reporters dig through 2.5 million files, revealing “the secrets of more than 120,000 offshore companies and trusts, exposing hidden dealings of politicians, con men and the mega-rich the world over.”
The leaked files provide facts and figures — cash transfers, incorporation dates, links between companies and individuals — that illustrate how offshore financial secrecy has spread aggressively around the globe, allowing the wealthy and the well-connected to dodge taxes and fueling corruption and economic woes in rich and poor nations alike.
ICIJ’s investigation is an incredibly thorough look at the global tax game, one played by “the wife of Russia’s deputy prime minister,” “Indonesian billionaires with ties to the late dictator Suharto,” along with “American doctors and dentists and middle-class Greek villagers as well as families and associates of long-time despots, Wall Street swindlers, Eastern European and Indonesian billionaires, Russian corporate executives, international arms dealers and a sham-director-fronted company that the European Union has labeled as a cog in Iran’s nuclear-development program.”
Talk of tax havens, loopholes and secret bank accounts and international offices (not always illegal, mind you) comes up all the time when discussing how some extremely rich people or corporations avoid paying taxes. Perhaps you’re curious as to how this seemingly other world works. To that end, the CBC has put together a fun interactive that lets you walk through the steps of how to set up your own tax haven, everything from picking the kind of sham business you want, picking your favorite tax-friendly nation, and deciding whether to use your own name on the documents of one of a “nominee.”
No one is recommending that you actually do this. While holding money in offshore accounts, setting up businesses overseas and many of the other routes taken to hiding money from the tax collectors are not in themselves inherently illegal, moving money in and out of these holdings in ways that allow you to skirt taxes are, meaning that there’s little reason to go to all the effort if you just plan to keep things above board.
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