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News & Analysis > All
News & analysis from Proletarian Internationalist Notes—news, reviews and analysis from a global perspective
Panama Papers shock: non-Amerikan elites need bank accounts, too
written April 7, 2016
Millions of documents from a Panamanian firm were leaked some time ago to certain media outlets. The firm provided “shell” services to non-Panamanians. An international organization of journalists based in Washington, D.C., helped distribute the information that was supposed to be private. As others have pointed out, many of the headlines that appeared as, and after, the so-called Panama Papers offshore records story dropped this month seemed pre-written to favor the united $tates. The head of government of a small rich imperialist country is now a political casualty of the leak. Just reading some of the first articles about the leak, one would not know there are elites in the united $tates. Keep in mind the following.
According to the U.$. Treasury, 11% of telephoned “taxpayers” (Amerikan adults) admitted it was acceptable to cheat on income taxes “a little here and there” or “as much as possible” in 2014.(1) Also relevant to offshore banking and shell companies is that 38% of these people in the united $tates (whether they filed taxes or not) admitted they completely disagreed or mostly disagreed with “I trust the IRS to fairly enforce the tax laws as enacted by Congress and the President.” 17% answered “completely disagree.” Almost half of respondents 50 or older didn’t say they trusted the IRS, which is relevant because people over 50 have more money, are thinking about retirement more, and are probably more likely to use offshore services than people under 25. The average age of a new pension/financial advising client in the united $tates may be above forty or in the mid-thirties if the results of two British surveys are relevant.(2) However, looking for the dirt on Amerikans in the Panama Papers heap may be a pointless exercise (if the leaked data were ever released in its entirety). With some reasonable assumptions, one can deduce that leaks from the offshore industry, the portion of the records involving illicit activity, will inevitably favor the rich. While reserving the right to expose Amerikans (including liberal Democrats and social-democrats) breaking their own country’s laws to attack oppressed nations, one would be justified in yawning at the some of the coverage of the Panama Papers not just because there were already the Offshore Leaks of 2013 and the Swiss Leaks, but also because a lot of the coverage is hype ignoring various realities one could have already known about. Of course, to Amerikan and Western chauvinists the leak just confirmed what they had suspected or already asserted.
At this point in history, all countries including former Soviet Republics and Third World countries have capitalists. There are u.$. sanctions against several countries, and embargoes against dozens more. Because of wars, u.$. policies, and trade favoring the united $tates, many non-u.$. capitalists particularly in the Third World have less income and less to save and invest in legal and aboveboard ways; although, u.$. capitalists have long used various middlemen legally and illegally to store and move money and to extract profit from other countries. Offshore services become attractive to many non-Amerikans just as another option. (An oppressed nation capitalist could use an offshore company to sell goods at higher prices or pay lower tariffs.) Some non-Amerikan capitalists may be more likely to consider using offshore services in an illegal way. In general, nobody wants to pay taxes. Most tax audits in the united $tates reveal an error or omission. Some people do some time in prison or pay fines for tax evasion in the united $tates, but penalties in some countries that are Amerikan neo-colonies or u.$.-backed are more severe, giving some non-Amerikans more reason to use more deception in their financial affairs. In addition, the united $tates has been involved in bribing capitalists in Third World countries, former Soviet Republics, and some imperialist countries. The recipients want to hide some of these bribes. Then there are the issues with the restoration of capitalism or colonialism, privatization being one aspect at certain stages, and transitions to/within bourgeois dictatorship that are associated with bribery and corruption. The chauvinist bourgeoisie and petty-bourgeoisie in other countries portray the bribery and corruption as aberrations particular to certain countries when it is convenient to do so.
Another difference involving taxes is that not everyone can give up citizenship like some Amerikans do to avoid paying taxes. Another is that less-rich capitalists in another country may face a tax rate equal to a rate some capitalists in the united $tates are paying, and they may experience the same tax rate as more burdensome. Amerikans often have higher tax rates, but the average Amerikan has much more income than people in many countries. Even if one were to look at just OECD countries, in terms of “tax wedge” (different from individual income tax) a country like Hungary, the Czech Republic, Greece, Portugal, Turkey or Poland could pay its government more percentage-wise of a worker’s wages (higher combined individual income and payroll taxes) than the united $tates does despite having a much lower average wage and a much lower GDP per capita.(3) (The OECD profess “a shared commitment to market economies backed by democratic institutions” and have been emphasizing a goal of ending tax evasion by ending bank secrecy and targeting offshore tax evasion.) In fact, total tax revenue as a percentage of GDP is much lower for the united $tates than for the vast majority of OECD countries.(4) In other words, Amerikans in many cases have to pay less tax to begin with. On top of this, keep in mind that, because of international wage and price differences, concepts such as gross domestic product typically overstate (the united $tates and other First World countries) or understate (countries in the Third World) what the country’s workers actually produce.
Relatedly, Amerikans may have a permissive or cynical attitude toward conspicuous displays of wealth, and “lobbying” and business donations, while criticizing others selectively for the same thing. They are used to much wealth being around them, and Amerikan workers identify with their imperialists to an extent. Some other countries regard ostentatious or conspicuous wealth and capitalist influence more negatively. That may be another pressure leading to use of offshore bank accounts or bank accounts under another name.
In addition to pressures related to differences between imperialist countries and the massive exploitation of the Third World, there is the reality of spying. At the moment many suspect CIA involvement in the Panama Papers or how it was reported. The fact of spying being lopsided in favor of the united $tates would be an issue of importance not just for understanding one leak. The CIA, MI6, ASIS, CSIS etc. naturally have an interest in offshore banking and services, but non-Amerikans and non-Westerners might use them to avoid the risks involved in relying on domestic banking and services. Various capitalists need bank accounts for what they want to do legally, which may not be congruent with Amerikan interests. “Financial intelligence” is one of many areas in which even Amerika’s allies may be monitored and targeted under the pretext of “anti-terrorism,” “national security,” of “informing” “international security” decision-making, and can be undertaken by claiming to fight money laundering and tax evasion or by drawing from information collected in efforts against these. Amerikan elites can make use of spying in conflicts with each other and may be spied on by other countries, but they don’t have as much to worry about in regard to spying as non-Amerikan elites do.
Oppressed nations should know (in ways that don’t rely on imperialist intelligence agencies) about various financial or economic flows that hurt them, including hidden flows in legal trade of goods and services, not just illicit outflows of money part of which could have gone to taxes. People everywhere rightly view the Panama Papers as a distraction from what’s wrong with Amerika and its foreign policy. If one were in a certain country and needed to criticize elites or capitalists in that country for some struggle, there might be a reluctance to emphasize all of the points in this article. However, the perspective taken here is global. There is no socialist Soviet Union or socialist China today, so in international relations the conflicts between the government and elites of the united $nakes and other imperialist countries, and between even neo-colonial Third World governments/elites and imperialist countries, take on additional significance for the oppressed. Contrary to what racists think or suggest, conflicts between neo-colonial governments and the united $tates don’t have less proletarian content than conflicts between the united $tates and other imperialist countries. They have more; most imperialist countries actually have exploiter majorities and no proletarian working class. Even if some lackeys of u.$. imperialism were avoiding paying taxes to their country’s neo-colonial government, the appearances generated by the Panama Papers leak and its coverage benefit u.$. imperialism and the parasitic u.$. population.
The ICIJ—the organization that facilitated investigation of the Panama Papers—had published articles suggesting the OECD hadn’t done enough to include poor countries in a plan to share information to fight tax evasion.(5) It wasn’t enough that many countries took a hit after the Offshore Leaks. ICIJ found it necessary to spread the Panama Papers data after claiming to be on the side of poor countries.
In imperialist countries, criticism of multinational corporations—as with LuxLeaks—joined to criticism of domestic and “global” “elites” and denying that most First World people are parasites on the Third World, is one recipe for thought leading to fascism. Delusional people who think they can help turn the united $nakes into some behemoth of a Scandinavian utopia while attacking small, rival or oppressed countries for their financial sins as some kind of quasi-anti-capitalist global struggle, are wrong about that. ◊
1. “2014 Taxpayer Attitude Survey,” 2014 December. https://www.treasury.gov/IRSOB/reports/Documents/IRSOB%20Taxpayer%20Attitude%20Survey%202014.pdf
2. “Young investors missing out as average age of new pension client is over 41, survey reveals,” 2010 February 1. http://www.investmentinternational.com/news/latest/young-investors-missing-out-as-average-age-of-new-pension-client-is-over-41-survey-reveals-3317.html
“People are seeking retirement advice 10 years too late,” 2015 June 17. https://business.unbiased.co.uk/press-releases/people-are-seeking-retirement-advice-10-years-too-late-17-6-2015
3. “Taxing wages - comparative tables.” http://stats.oecd.org/Index.aspx?DataSetCode=AWCOMP
4. “Revenue statistics - comparative tables.” https://stats.oecd.org/Index.aspx?DataSetCode=REV
5. For example: “Can the OECD’s tax evasion plan trickle down to the developing world?” 2014 February 24. https://www.icij.org/blog/2014/02/can-oecds-tax-evasion-plan-trickle-down-developing-world
For example: “OECD’s plan to end bank secrecy blasted by activists,” 2014 July 23. https://www.icij.org/blog/2014/07/oecds-plan-end-bank-secrecy-blasted-activists