The Paradise Papers have been flooding news cycles around the world, but I don’t think many of us really get why.
Bono uses them to funnel his wealth into investments in shopping malls while fighting for human rights and ending poverty. Lewis Hamilton uses them to save millions in import taxes on his private jet. And then you have war criminals and corrupt politicians using them. Republics and Democrats in the US have been linked to sending their money to tax havens. The companies that help set up and manage offshore activity do not discriminate between a war criminal, corrupt public official, trust fund kid or celebrity. It’s all so incredibly opaque that the only time we get a glimpse of all of this is when a whistleblower leaks information to investigative journalists.
Why is this important, besides being juicy reading?
“Assuming conservatively that global offshore financial wealth of $21 trillion earns a total return of just 3 percent a year, and would have faced an average marginal tax rate of 30 percent in the home country, the unrecorded wealth might have generated tax revenues of $189 billion per year – more than twice the $86 billion that OECD countries as a whole are now spending on all overseas development assistance.” – TIME
That’s $189 billion that could have been used to improve schools and healthcare and jobs, help reduce taxes on the people who really do need the tax cuts, and send some of this money towards research and development to tackle climate change or superbugs.
It might seem like the ultra-wealthy live by a completely different set of rules than the rest of us. They do. But by having organisations like the ICIJ and journalists like Frederik Obermaier work with the material brave whistleblowers send them (risking their lives along the way), we can become aware of these rules and use our votes and voices to pressure governments to make changes. Big changes (such as the Pakistani PM resigning thanks to the revelations that came out of the Panama Papers last year).
Sometimes, knowledge is power.