One of the biggest stories in the world right now is the massive data leak of the so-called “Panama Papers” that reveal in great detail how the world’s wealthiest elites use shell companies to avoid paying taxes in their home countries. The documents are also filled with scandalous details about the behavior of several major government officials, including the prime minister of Iceland and Russian president Vladimir Putin.
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So what are the big takeaways so far? Here are the major political scandals unveiled so far:
- Icelandic prime minister Sigmundur David Gunnlaugsson secretly owned debts for failed banks whose fate he was in charge of negotiating back in 2009.
- A network of secret deals worth $2 billion have all benefited members of Vladimir Putin’s inner circle and couldn’t have been possible without his patronage.
- Ukrainian President Petro Poroshenko stuffed his business interests in an offshore account despite pledging to sell them off during his campaign.
However, as Vox’s Matthew Yglesias points out, the Panama Papers mostly deal with the routine and completely legal ways that ultra-rich people avoid paying taxes.
“Incorporating your hedge fund in a country with no corporate income tax even though all your fund’s employees and investors live in the United States is perfectly legal,” he writes. “So is, in most cases, setting up a Panamanian shell company to own and manage most of your family’s fortune. Tax avoidance is an inevitable feature of any tax system, but the reason this particular form of avoidance grows and grows without bounds is that powerful politicians in powerful countries have chosen to let it happen.”
The Guardian has put together a video showing how infuriatingly easy it is for rich people to hide $1 billion away in offshore tax havens — check it out for yourself below.
