Panama Papers

[Maladict]

Where I am with Marty is that this kind of stuff is done by everyone everywhere, the only difference is, everyone is doing it on their own scale. That BS business expense excuse you used to pay a few dollars less tax, having your car on your company's name etc.

Speak for yourself.  I've never done such a thing.

yeah, wtf.

[celedhring]

How do you reconcile this supposed "right to asset privacy" with taxation?

[Solmyr]

How do you reconcile this supposed "right to asset privacy" with taxation?

You don't. Marty is just pulling "rights" out of his ass.

[crazy canuck]

Whether these other parties have a right to know these assets exist depends entirely on the jurisdiction.

As a moral rather than legal question, I generally believe that people have a right to privacy and it extends to their assets, in the same way people should be able to keep their correspondence private (and it should be legal for them to use encryption and other technical means of ensuring this privacy) - even though in some jurisdictions such techniques are prohibited.

Your position that some of the transactions that were arguably legal should not be criticized has some questionable assumptions.

The first assumption is that a legal act should not be criticized.  That is a rather odd position to take in a democratic society.  Laws should be carefully considered and where appropriate changed through the democratic process.  One way to do that is to make the general public aware of laws that should receive more scrutiny. 

The second assumption is that because many of transactions in question were arguably legal nobody should be able to discover how the law is being used (and many would say abused).  But if the public never learn about laws that should be more closely scrutinized how do you propose that any meaningful legislative reforms take place?

The third assumption you are making really underpins the first two assumptions.  That is the assumption that these laws are fine so everyone should carry on and not make such a bother about it.

Your assumptions work well in a more dictatorial form of government where government officials working closely with other elites get to decide what is best without others really knowing what is occurring.  But I am not convinced that such a model should be defended.   

[Martinus]

Your position that some of the transactions that were arguably legal should not be criticized has some questionable assumptions.

The first assumption is that a legal act should not be criticized.  That is a rather odd position to take in a democratic society.  Laws should be carefully considered and where appropriate changed through the democratic process.  One way to do that is to make the general public aware of laws that should receive more scrutiny.

This is probably why I said in one of the first posts in this tread that if you don't like such actions being legal, lobby for law to be changed, rather than bitching about evil rich people trying to minimise their tax exposure through legal means.

I don't understand your point in the other two assumptions so will not respond.

[crazy canuck]

Your position that some of the transactions that were arguably legal should not be criticized has some questionable assumptions.

The first assumption is that a legal act should not be criticized.  That is a rather odd position to take in a democratic society.  Laws should be carefully considered and where appropriate changed through the democratic process.  One way to do that is to make the general public aware of laws that should receive more scrutiny.

This is probably why I said in one of the first posts in this tread that if you don't like such actions being legal, lobby for law to be changed, rather than bitching about evil rich people trying to minimise their tax exposure through legal means.

I don't understand your point in the other two assumptions so will not respond.

Yeah, the fact that you are missing the point is pretty clear from your response.  If people are not aware of the problem, how are they supposed to lobby for the law to be changed?

[MadImmortalMan]

That might not actually be the point.

Marty said morally it's questionable to violate the privacy of the people with accounts or companies or whatever it is. I don't know that doing that violation of privacy is necessary in order to point out the failures of the law.

I mean, they obviously decided to put their money there because the banking laws of their own jurisdiction failed to adequately protect their privacy, either due to the law itself or due to functional failure. Or at least that's one of the reasons. Outing them does not fix that problem.

[crazy canuck]

That might not actually be the point.

Marty said morally it's questionable to violate the privacy of the people with accounts or companies or whatever it is. I don't know that doing that violation of privacy is necessary in order to point out the failures of the law.

I mean, they obviously decided to put their money there because the banking laws of their own jurisdiction failed to adequately protect their privacy, either due to the law itself or due to functional failure. Or at least that's one of the reasons. Outing them does not fix that problem.

They obviously decided to put their money there so they would not have to pay tax on that money.  Privacy laws had nothing to do with it.

But for the sake of argument let's take that angle.  Which is the moral choice?  To allow a law to be used by an exclusive few without the knowledge of the many or to allow the many to know how the law is being used by the privileged few?  The person who answers the former is relying on an assumption that the law and those using it should be protected even if that means that an unjust law continues to be unchallenged because the privacy of those privileged few outweighs the interest everyone to have good and just laws of general application. 

As may be obvious, I don't accept that rationalization.  It runs counter to all the legislative efforts across democracies to make policy decisions of government and politicians more transparent and accountable.

[viper37]

That might not actually be the point.

Marty said morally it's questionable to violate the privacy of the people with accounts or companies or whatever it is. I don't know that doing that violation of privacy is necessary in order to point out the failures of the law.

I mean, they obviously decided to put their money there because the banking laws of their own jurisdiction failed to adequately protect their privacy, either due to the law itself or due to functional failure. Or at least that's one of the reasons. Outing them does not fix that problem.

They obviously decided to put their money there so they would not have to pay tax on that money.

Not all of them.  Possibly the majority of them, but not all of them.

Say you have a business.  It is 1998.  You operate in Venezuela.  2 years later, the Venezuelan government decides that you are a thief and they expropriate your business, seize all your assets, financial and material.

If you have a company set up in an offshore account, you can keep most of your financial assets, you only lose what the government won't let you take out of the country.

Of course, having offshore accounts can be useful to bribe foreign leaders without leaving a trace.  That is the disgusting part.  But having the account for the first reason stated is not an automatic #2.

If, as an individual, you travel a lot abroad, in unsafe countries, it's very useful to keep money in such an account that can't be easily accessed by a government or criminal group.  It can be a life saver in some places, if things turn sour.

And as strange as it sounds, for those operating in international finance, with transaction in multiple, generally safe countries, it will often be easier to transfer large funds to/from such an offshore account to/from a more traditional bank than from, say, Toronto Dominion to Crédit Lyonnais.  Less hassles, less fees, once the initial setup is done.

Again, most of the people with such accounts do this to avoid taxes or hide corruption money.  Most, but not all.
A I am on Marty's side on this, but I do not follow him on his zealous defense on the right of asset privacy from your government in all cases.  If I was a russian businessman not aligned to Putin, I would have an offshore account or two.  If I was a legitimate canadian businessman rich enough to have an offshore account, probably not.  I'd prefer avoiding countries of ill-repute instead.

[MadImmortalMan]

Putting assets in multiple jurisdictions is a simple and obvious risk management step.

[Berkut]

Your position that some of the transactions that were arguably legal should not be criticized has some questionable assumptions.

The first assumption is that a legal act should not be criticized.  That is a rather odd position to take in a democratic society.  Laws should be carefully considered and where appropriate changed through the democratic process.  One way to do that is to make the general public aware of laws that should receive more scrutiny.

This is probably why I said in one of the first posts in this tread that if you don't like such actions being legal, lobby for law to be changed, rather than bitching about evil rich people trying to minimise their tax exposure through legal means.

I don't understand your point in the other two assumptions so will not respond.

How can you lobby about a problem that nobody is aware of because the current structure allows the mega wealthy to hide the problem completely?

[MadImmortalMan]

Which is the moral choice?  To allow a law to be used by an exclusive few without the knowledge of the many or to allow the many to know how the law is being used by the privileged few?  The person who answers the former is relying on an assumption that the law and those using it should be protected even if that means that an unjust law continues to be unchallenged because the privacy of those privileged few outweighs the interest everyone to have good and just laws of general application. 

Is it a big secret that you only get to know about if your net worth is high enough? Did someone actually pass a law saying that diversifying funds to other countries was only available to super rich people?

Which law are you talking about?


Yes, the privacy of the individual does outweigh just about any public good I can possibly imagine here. I can't even think of any reason that someone might need to publish the contents of your bank account in order to advocate for a change in a law of any kind.

[crazy canuck]

Which is the moral choice?  To allow a law to be used by an exclusive few without the knowledge of the many or to allow the many to know how the law is being used by the privileged few?  The person who answers the former is relying on an assumption that the law and those using it should be protected even if that means that an unjust law continues to be unchallenged because the privacy of those privileged few outweighs the interest everyone to have good and just laws of general application. 

Is it a big secret that you only get to know about if your net worth is high enough? Did someone actually pass a law saying that diversifying funds to other countries was only available to super rich people?

Which law are you talking about?


Yes, the privacy of the individual does outweigh just about any public good I can possibly imagine here. I can't even think of any reason that someone might need to publish the contents of your bank account in order to advocate for a change in a law of any kind.

In answer to your rhetorical question, I think the answer is yes.  Who other then high net worth people would know about the arcane world of tax avoidance?   That is what is so impactful about this disclosure.  Although people knew that the rich had means to shelter their assets I don't think many understood the magnitude of the problem until now.

How many actually read Picketty's book and understood his call for tax reform?

The really funny thing is that Marti used to quote from him. 

If you think that secrecy is the most important moral good then you and I will have to part company there.  Even Switzerland is being forced to change to a more modern and I dare say moral approach.

[MadImmortalMan]

Everyone "has access" to these methods. Just because I personally don't have enough assets that assuming the overhead of these kinds of diversification strategies would make sense doesn't mean "the law" is somehow discriminating against me.


I read P, and he never advocated outlawing overseas investing.

[crazy canuck]

Everyone "has access" to these methods. Just because I personally don't have enough assets that assuming the overhead of these kinds of diversification strategies would make sense doesn't mean "the law" is somehow discriminating against me.

The law prevents everyone from sleeping under a bridge.

That logic just doesn't work my friend.  Only those with sufficient income will find it to be cost effective to retain the services of a specialist to take advantage of off shore tax devices to shelter their money.  It is therefore only those people who benefit from tax avoidance laws while the rest of the 99% pay the full tax bill.  It is illusory to suggest that is a law of general application. 

Let us return to our discussion about morality.  I think it is moral to have laws which provide special benefits to the least advantaged in our society.  I think it is immoral to provide laws which provide special benefits to the most advantaged in our society and particularly when those advantages are, for all practical purposes, hidden from view.

I read P, and he never advocated outlawing overseas investing.

You should reread the parts where he expressly talks about removing laws which allow this sort of tax avoidance.  He readily admitted that the level of international cooperation which would be necessary made it unlikely to achieve but he certainly expressed the view that international tax dodges were a significant part of the problem of wealth inequality in our society.