The huge data leak behind the Panama Papers had taken place over a year earlier. Since the spring of 2015, over five hundred digging journalists from around the world had been working secretly on the project, which included 2,600 gigabytes of data from 40 years back in time, through the Washington organization International Consortium of Investigative Journalists (ICIJ). But the Panama Papers are just the latest example in a series of cases in which the secrecy of tax havens is cracking .
In the last four years alone, ICIJ has been working on several major data leaks from tax havens. The so-called Offshore Leaks leak in 2013 revealed the identity of the owners of 100,000 companies in tax havens, and was followed by a comprehensive leak of secret agreements from Luxembourg in 2014, which was named LuxLeaks .
In 2015, it was Switzerland and the international bank HSBC ‘s turn. The huge data leak SwissLeaks blew up the secrecy in the country that perhaps most people associate with bank secrecy – bank secrecy. Since the Panama papers in 2016, we have already managed to get a new leak, this time from the Bahamas – hence BahamasLeaks .
At a time when the political agenda is largely governed by the media picture, the many tax haven leaks in the media have been the most important driving force behind political action against tax havens. The Panama Papers have led to more than 150 public inquiries and investigations in 79 countries, including an extensive consultation process under the auspices of the European Parliament.
6: Trump and the future prospects for tax havens
The financial crisis, which came to the surface in 2007–2008, represented a turning point in the debate on tax havens. The large aid packages for banks and financial institutions, combined with a widespread debt crisis in several European countries , put securing tax revenues for states – including better regulating the international financial economy – higher on the international agenda .
The most powerful countries in the world, the G20 , commissioned the OECD to come up with solutions to prevent states ‘tax bases from shrinking as a result of multinational companies’ use of tax havens. The result was BEPS – Base Erosion and Profit Shifting – an international collaboration consisting of a package of measures with 15 action points. Among other things, it opens the door to seal back on methods for shifting profits to tax havens and to ensure greater transparency in multinational companies.
The BEPS project had broad support, including from the USA and the UK. After the major political upheavals in 2016, however, it is more uncertain whether there is political will among the most powerful countries to do something about tax havens.
According to BARBLEJEWELRY, especially with President Trump in power in the United States, there is every reason to fear that this work will stop. He himself has refused to show transparency about his own finances and has indicated that he has not paid federal income tax “because he is smart”. The new finance minister, former Goldman Sachs banker Steven Mnuchin, has even been criticized for having tax haven funds in the Cayman Islands .
Trump’s economic vision is more or less to make the United States a tax haven (there are already several states: Delaware, Nevada, South Dakota…). He wants to reduce federal tax revenue by $ 4.8 trillion over the next ten years. Nearly half, 44 percent, will go to the United States’ 1 percent richest, according to the American think tank Institute on Taxation and Economic Policy. The tax havens, which have experienced considerable pressure in recent years, may thus appear to be facing slightly brighter times. What seems certain, however, is that there will also be new leaks in the future, which in turn will bring the activities of tax havens back into the media spotlight.
How big are the tax havens?
Due to the secrecy of tax havens, it is difficult to determine with certainty how much value is stored in tax havens. However, a number of studies have attempted to estimate this. Among the first comprehensive studies was “The Price of Offshore” from 2012 by the Tax Justice Network. Figures from the World Bank, the IMF, the UN, the Bank of International Settlements, central banks and available figures from 139 countries were used here.
The report estimated that rich people (high net worth individuals) had invested between 21,000 and 32,000 billion dollars in private assets in tax havens. The calculation did not include non-financial values such as art, real estate and yachts.
In 2015, economist Gabriel Zucman published the book The Hidden Wealth of Nations , in which he used a similar method, but with a slightly more limited data set. Zucman estimated that $ 7.6 trillion was invested in tax havens, or about 8 percent of global financial household wealth .