Trouble in Paradise? The Paradise Papers and the Ethics of Lawful Tax Avoidance

Document Type

Article

Abstract

Just last week, a group of investigative journalists unveiled a new source of records known as the Paradise Papers. Following on the heels of the Panama Papers, this stash of records sent from an anonymous source gives us a closer look at how wealthy individuals and multinational corporations hide their assets in offshore jurisdictions, including Caribbean island nations. As I will discuss below, the reaction to the Paradise Papers has been less explosive than it was to the Panama Papers. One key reason is that most, if not all, of the activity is legal—only one criminal indictment has been filed (in India) since the papers started making the headlines. By contrast, the Panama Papers led to the arrest of the law firm partners at the center of the controversy for money laundering relating to illicit activities. The Panama Papers may simply be a brief “lifestyles of the rich and famous” mini-series. At the same time, the leaked documents show us pervasive patterns of the rich and powerful moving their money as a tax avoidance strategy. It may be highlighting to the less powerful citizens in many countries, that while their taxes are going pay for police, roads, and essential services, others who can move money (and often change citizenship) are not always sharing the burden. We are still in the early days of revelations, however, and the sheer number of names linked to the papers may lead to further pressure for regulatory reform.

Link to Full Text

Share

COinS