Bobos & Wojaks

Get rich or die tryin

Crypto Tax politics

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It’s hard to believe, but none of these significant leaks has resulted in an actual change of laws and regulations. Politics has failed the people as two investigative Journalists, who were part of the research team, note:

“When we published the Panama Papers five years ago, we knew it wouldn’t stop at that one leak. And so it was: shortly afterwards, the Bahamas Leaks were leaked to us, then the Paradise Papers. This was followed by the FinCEN files, which a courageous whistleblower sent to our colleagues at Buzzfeed – and now the Pandora Papers: the biggest leak to date from the world of tax havens, depending on how you count it. It reveals how hundreds of politicians – including 35 heads of state – hide their money in shell companies, trusts and foundations.

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The big offshore business continues to boom. The existence of tax havens has been known for years. That letterbox companies are used by tax evaders, fraudsters and other criminals has also been known for years. And yet there has been little willingness to really change this.”

To put these papers into context with each other, this is how much data was leaked:

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But none of this has had any effect on politicians to change legislation:

“Of course investigations were launched, some politicians resigned, some even went to prison. A few laws have also been tightened. Finally, more countries have a register where you can look up the true owners of companies.

The G20 countries also agreed on global minimum taxation – but it is a ridiculously low 15 percent and only applies to large corporations. The big deal failed to materialize. And the big offshore business continues.

A sensible and rapid exchange of information between investigators of all countries is still a long way off. Sanctions against tax haven are even more so. How could they? After all, one of the biggest tax havens in the world is, of all places, the USA. The states of Delaware, Nevada and Wyoming have been criticized for years – and yet nothing is done. What’s more, when the tax haven Bahamas tightened its laws in 2018 under pressure from the United States, many offshore clients migrated – to the USA, of all places, to South Dakota.

Irresponsibility of politics

US governments have always led the way in demanding more transparency from other countries and a move away from dirty money. But at home, in their own backyard, they don’t look so closely. The crooks of this world thank you.

But if you are looking for hypocrisy, you don’t need to go far afield. The European Union, too, has not covered itself with glory as far as the fight against tax havens is concerned. Only two days after the first Pandora Papers were published, EU finance ministers removed Dominica, Anguilla and Seychelles from the blacklist of tax havens – at a summit in Luxembourg, the picturesque tax haven in the heart of Europe.

How are we supposed to explain to the people that politics on the one hand has not been acting for years – and at the same time we constantly expose politicians as profiteers of the offshore system on the other hand? That of all people, those social actors who could and should remedy this deplorable state of affairs have themselves profited from the system? That they have hardly pushed anything forward since the Panama Papers? It is difficult to explain.”

As the article states, it is incredibly difficult to understand and explain why nothing significant has happened. Moreover, the attack on crypto as a dangerous, criminal and bad investment around the world is just an attempt to distract, a decoy, from the real problem: the power of the rich.

This is also partly dangerous for our democratic system:

“If a few can choose which laws apply to them, this creates a two-class society: here those in the offshore world – there the rest. But people no longer identify with a form of society in which there are different rules and in which “those up there” can abide by completely different rules. This in turn endangers our democracy. For it makes it easy for populists to pick up votes: all they have to do is rail against “those up there”. And we, as journalists, also prove this with every leak, because we confirm that the elite allows themselves other rules.”

Blockchain and decentralized regulated cryptocurrencies (needs to happen for adoption and to ensure that crypto does not meet the same faith as traditional investment assets) have the potential to offer a solution to an increasingly difficult-to-solve problem. But crypto is far from the problem or bad, it’s just another attempt from politicians who are clearly involved in this to get their head out of the swamp.