The question behind the Panama leak: Why aren’t international rules stopping offshore tax evasion?

April 5, 2016 5:09 PM

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The question behind the Panama leak: Why aren’t international rules stopping offshore tax evasion?

A lot of people are upset about the release of the “Panama Papers,” a leak of 11.5 million files from Mossack Fonseca, reportedly the world’s fourth-largest law firm providing offshore financial services. The leak is creating a scandal, as they reveal how a huge range of political elites and celebrities — from the suspect, like members of Putin’s inner circle, to the seemingly squeaky clean, like a quarter of Iceland’s ruling cabinet — have used shell companies and accounts to keep their capital. Shell companies can be used for a variety of legitimate purposes, but can also be used to avoid paying taxes or to hide ill-gotten gains. Lists of political elites with shell companies, including 12 current national leaders, their advisers and various celebrities, have emerged.

This isn’t the first such leak — in recent years, we have seen leaks from Luxembourg, Singapore and Switzerland. The Panama leak provides us with a longer list of names to point our fingers at. The more important question is the underlying one. Why do we need whistleblowers to see what is going on i...

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