NEW: #PandoraPapers reveals the inner workings of a shadow economy that benefits the wealthy and well-connected at the expense of everyone else.
Brought to you by ICIJ and 600+ journalists, the largest collaboration in journalism history. ?? https://t.co/qXMuUcqPc4
— ICIJ (@ICIJorg) October 3, 2021
I haven’t (yet) read beyond the headlines, but the International Consortium of Investigative Journalists have given us a trove worthy of its name. They deserve a bit of a flex…
World leaders, celebrities and billionaires are among those who've used offshore accounts to hide assets, a report by the International Consortium of Investigative Journalists reveals. The "Pandora Papers" analyzes nearly 12 million leaked files. https://t.co/yyA3iIP2LT
— The Associated Press (@AP) October 3, 2021
Hundreds of world leaders, powerful politicians, billionaires, celebrities, religious leaders and drug dealers have been hiding their investments in mansions, exclusive beachfront property, yachts and other assets for the past quarter-century, according to a review of nearly 12 million files obtained from 14 firms located around the world.
The report released Sunday by the International Consortium of Investigative Journalists involved 600 journalists from 150 media outlets in 117 countries. It’s being dubbed the “Pandora Papers” because the findings shed light on the previously hidden dealings of the elite and the corrupt, and how they have used offshore accounts to shield assets collectively worth trillions of dollars.
The more than 330 current and former politicians identified as beneficiaries of the secret accounts include Jordan’s King Abdullah II, former U.K. Prime Minister Tony Blair, Czech Republic Prime Minister Andrej Babis, Kenyan President Uhuru Kenyatta, Ecuador’s President Guillermo Lasso, and associates of both Pakistani Prime Minister Imran Khan and Russian President Vladimir Putin…
The latest investigation dug into accounts registered in familiar offshore havens, including the British Virgin Islands, Seychelles, Hong Kong and Belize. But some of the secret accounts were also scattered around in trusts set up in the U.S., including 81 in South Dakota and 37 in Florida.
Some of the initial findings released Sunday painted a sordid picture of the prominent people involved…
Factbox: Key findings of leaked Pandora Papers on offshore wealth https://t.co/xU8wrtcXsS pic.twitter.com/SkbVmQy03i
— Reuters (@Reuters) October 4, 2021
Of the more than 300 politicians and public officials unearthed in the #PandoraPapers, we profiled more than 50 of the biggest names – and their secret offshore holdings — in the Power Players interactive. ?? https://t.co/G2bgJn8Uce
— ICIJ (@ICIJorg) October 3, 2021
Meet the firms whose confidential records make up the basis of the #PandoraPapers: The Secrecy Brokers ??https://t.co/cZZgZqRsId
— ICIJ (@ICIJorg) October 3, 2021
The Pandora Papers leak is the latest in a series of whistleblower-led investigations that have rocked the world of finance in recent years
— BBC News (World) (@BBCWorld) October 3, 2021
What do the Pandora Papers tell us?https://t.co/V7Rh3bKuWe
— BBC News (World) (@BBCWorld) October 4, 2021
oatler
…and the sun continues to rise in the east.
MattF
Somewhat buried in the article is the odd fact that South Dakota is a global center of concealed financial transactions. And the governor of South Dakota… a name that starts with ‘N’…
Old School
There are no U.S. politicians in the report.
I wouldn’t have guessed that.
ExpatDan
Excellent work!
Another great group for real-deal investigative journalism is:
https://www.bellingcat.com/
Le Comte de Monte Cristo, fka Edmund Dantes
These will only be important when the releasing and indexing journalists start a substack that they can thunder from.
By the way, Greenwald hasn’t uttered a word about it. It’s all Hunter Biden, criticism of liberals, and Facebook and google as “monopolies” over at his twit feed.
Emma from Miami
Interestingly enough the only white Western Europeans appearing in “The Power Players” are Tony Blair, John Dalli and Dominique Strauss-Kahn. No Americans.
Anonymous At Work
@MattF: South Dakota, to attract service industry, often let the industry write their own regulations in return for certain minimum-staffed nominal HQs. Very much a Race to the Bottom aspect of federalism.
Anonymous At Work
This topic seems like a good one to ask Sinema, Manchin and their radical extremist Centrist cohorts about…”Why do you support hiding wealth like this by opposing IRS staffing?”
lowtechcyclist
IOW, just like the regular economy, only more so.
Kent
My guess is that most US uber-rich don’t use one of these 14 firms that were part of this hack as I think none were American firms. And honestly, the US is already so friendly towards the uber-wealthy that American billionaires don’t need to go to such lengths to shelter their wealth compared to other higher-tax countries. They just do it out in the open by buying Congress.
Ken
2.94 terabytes sounds like a lot, but I’d guess a lot of the documents are PDF files of image-scans of paper copies, or some other variation of the .NORM file format.
Also, it’s tiny compared to some modern mathematical proofs, now that “proof” has been extended to “have a supercomputer enumerate all possibilities”, and the proof paper consists of the authors’ names and a link to the downloadable 200-terabyte file.
Le Comte de Monte Cristo, fka Edmund Dantes
Oh, wait – Glenn is admiring and retweeting a Pakistani who prattles on about the “soullessness” of liberal culture and recommends that westerners who are worried about cancel culture should pick up a Koran and convert to Islam.
Wonder when Glenn’s gonna do that?
Baud
@Le Comte de Monte Cristo, fka Edmund Dantes:
Is he even interesting any more? He’s pretty well-ensconced in the right wing bubble now, no?
Fair Economist
This is an amazing body of work and all involved deserve the highest accolades.
@Old School: A large motivator in the hidden wealth is political disguise of personal interests. In the US, a multimillionaire investor in coal businesses can chair the Energy Committee (Manchin) and nobody in power even blinks. Why bother?
Ruckus
There are no US politicians but are there US billionaires who can hide their money here in places like South Dakota without even going offshore, say just by working through shell corps in a state they don’t do any legitimate business in, or have any obvious holdings?
Ruckus
@Kent:
Our current tax laws for the uber wealthy actually help them create extreme wealth, at of course the expense of the overall economy, and the defunding of the IRS has made finding those who have large amounts and catching them damn near impossible. There is a name of a family of wealth that most of you would recognize that supposedly owe back taxes in the billions range but getting the law fixed in their favor means they likely will never have to pay. And we all suffer.
oatler
OT but my new favorite commercial: “Lume-for stinky privates!”
The Moar You Know
@Old School: I question the veracity of the entire report if that’s what it states. I know goddamn well the last fucking asshole who was president was up to his eyeballs in that shit.
O. Felix Culpa
@Baud: No. Yes.
Le Comte de Monte Cristo, fka Edmund Dantes
@Ruckus: I’ve been of the impression for a while that our bullshit tax policy allows them to have enough wealth to distort public policy and society via campaign donations, think tank funding, lobby funding, educational contributions, church giving, charitable contributions and arts endowments. None of these drop their lifestyle spending at all (and don’t improve their lives), represent no sacrifice, and much of it is deductible AND going to untaxed entities. Most of the time, these are folks born sliding into home plate, and it leads to ossified thinking with regard to economic and social policy as they think of themselves as brilliant.
Ocotillo
Related, one of the items in the Build Back American bill, or so I am told it is in there, is banks having to report transactions over the amount of $600. Lobbyists (community banking associations) are Spamming Linked In about this asking people (bankers and others) to let their Congress Critter know their opposition to this.
What are the specifics behind this? Why drop the amount to $600? Today banks monitor transactions that exceed $10,000 per day and most track smaller amounts to suspicious activity but why under a grand?
MisterForkbeard
@Kent: There was some information on this earlier. The supposition is that it’s a combination of two things:
1) Tax rates in the US are so fucking low in very legal ways that many of the American Rich just don’t bother with hidden transactions or have little incentive to perform them in a major fashion.
2) The American Rich use different firms and methods than these guys.
Doug R
Considering how we always seem to be behind catching these uber dodgy rich, maybe cutting off loopholes and offering amnesty for awhile might be a way to go.
With confiscation for accounts discovered after the grace period.
MisterForkbeard
@Le Comte de Monte Cristo, fka Edmund Dantes: I will admit that the people who are really concerned about “Cancel Culture” are fundamentalist whackjobs (or deceived by them). So maybe there’s some similarities there.
Glenn, of course, is just happy that someone is attacking the Left because it benefits the Right and Trump, whom he totally does not support.
@Ocotillo: Why not under a grand? I think the number idea is basically “We’re monitoring a value large enough that it’s relatively easy to slip under, and this is basically no-cost in terms of reporting” (it’s computerized and causes little-to-no extra work to do).
At that point, picking a value that’s over the cost of a standard rent payment in most of the country makes sense and lets you weed out a lot fraud. But that’s just a guess.
dm
Is “Pan-” the prefix for ill-gotten-gains document dumps in the way that “-gate” is the suffix for political scandal, now? A few years ago it was the “Panama Papers”, revealing pretty much the same thing about the people next door to the ones in the Pandora Papers.
Baud
@dm:
Will the next dump be the Pangea Papers or the Pan Flute Papers?
MisterForkbeard
@Baud: The pancake papers. About the maple syrup barons of Canada.
Le Comte de Monte Cristo, fka Edmund Dantes
@The Moar You Know:
But when you’re a demonstrably proven failure at most things you try and are only really valued in business for the licensing power of your name due to propped up fame, will the smart money Europeans really allow you to play? Particularly when you’re a known blowhard?
He was persona non grata to pretty much every bank but the Russian banks and DB acting as cutout to Russian banks.
danielx
@Ocotillo:
I did notice that, and it irritated me no end. Six hundred bucks? Really? Is there really a compelling government interest involved here?
Baud
@MisterForkbeard:
Scandalous and delicious.
Ruckus
@Le Comte de Monte Cristo, fka Edmund Dantes:
Way too nicely summed up.
IOW absolutely but without enough swear words.
The UK is I believe actually far worse than we are at this time, our laws that allow this can be changed. Their system is top of the pile based and while ours currently work similarly, the basis is different. The laws could be changed back or better, but with great difficulty, but they can be changed back to better, fuller enforcement and taxing limits. I doubt at this time it’s politically possible, but we were better not all that long ago and the legal means are still in place.
Barbara
I am not saying it would be a simple thing, but if the two major currencies required financial institutions wherever they are located to adhere to minimum transparency and tax standards in order to have any kind of “banking” or other trading relationship with their financial institutions, a lot of this activity would cease. Whether it’s Jersey or Monaco or the Cayman Islands or Switzerland or Panama or Cyprus, It is motivated solely by tax and transparency arbitrage. I really don’t care if the economy of the Cayman Islands tanks because its revenue base is built on transaction fees for the uber rich seeking to hide assets and avoid taxes.
When the French bank (BNP Paribas?) thumbed its nose at U.S. regulations regarding Iran and other verboten transactions, like laundering money for well-known drug dealers, it paid $8 billion in fines when it was made clear that the sanction was being cut off from Federal Reserve. Holding nations to minimum standards is way past due.
Eunicecycle
@oatler: I just saw that commercial! It is pretty hilarious!
Ruckus
@danielx:
Yes, yes there is. If the focus is on little players the system gets backed up beyond usage/reality. It makes it easier to hide the big deals if the system is clogged up chasing nothings. That’s the IRS now. Lower staff levels make it far harder to spend the money/effort chasing the big money, with tons of accountants/lawyers protecting that big money.
Eunicecycle
@danielx: That does seem too low to me. I have a friend in the accounting world who is livid about it.
gvg
@dm: No. That is just coincidence. Panama is a place that is one of the tax havens. That leak was about finance in that location. Pandora obviously refers to opening Pandora’s box. I don’t know why yet.
I don’t hear about many Americans doing this in this leak. I have been hearing about a lot of British finance corruption for years and references to Russian mob money propping up London real estate to the point that is seems dangerous to reform because it might start a crash that effects ordinary British people and also frequent assumptions that it was some EU disclosure laws scheduled to start that made some British leaders want Brexit. I do not know how true all that is, but I guess I am not surprised that British leaders are implicated and not Americans (this time).
We should take warning and not allow criminals to imbed to deeply into our markets.
Jeffro
@Ruckus: so…sort of a “keep what few cops we do have busy chasing down jaywalkers while banks get robbed in broad daylight”, something like that?
Ruckus
@Barbara:
Notice that a lot of the people involved have political connections that put roadblocks or actually stop the process now of being controlled in any way. That is in this country as well. I’ve talked about our politicians that have a lot of money even though their salaries don’t justify it. Mitch is worth over 20 million and he doesn’t make that much. (and yes he’s married to a wealthy woman, whose worth is greater than his) How did he get there, does he save most of his salary and has for decades? How does a politician become that wealthy?
Hungry Joe
@Le Comte de Monte Cristo, fka Edmund Dantes: I don’t know that the ultra-rich are born “sliding into home plate.” More like, trotting across home after an intentional walk with the bases loaded.
Le Comte de Monte Cristo, fka Edmund Dantes
@gvg:
So 20 years ago or so, I went through the expense and effort of becoming an overseas agent in Anguilla, one of those Brit Crown Colonies that had created this shadow banking and corporate system for the purpose of shielding assets from creditors, wives and taxing authorities. I’d decided that I would help people dodge creditors and wives, but that I’d not get involved in tax duckers, as I didn’t have any desire to be named in an indictment as either an indicted or unindicted co-conspirator. I actually did a couple of them for people who were trying to fend off aggressive creditors, when I got a communication from some outfit n Hong Kong about my rates. They said I was too high and moved on. Several months later, they reached out again – they were offering to sell me entities off-the shelf that they created by the hundreds, and were aging like fine wines. They were offering them cheap, too – like $350 per entity.
It scared me right the hell off – that sort of process could be used for a fuckton of rottenness, and it came at the same time that the IRS and State Department were leaning hard for transparency in the wake of 9-11.
Never tried anything that flaky again.
Nelle
@Ruckus: Most any politician, I think, but that brings Rick Perry to mind. Only public service and millions in the bank. Or hidden on an island somewhere.
Ruckus
@Jeffro:
Yes.
Geo Wilcox
@gvg: Jersey is the UK’s home grown tax shelter “country”.
Eric S.
@The Moar You Know: This is a report of only 14 firms. I bet that’s just a drop in the bucket. Plus, as many have pointed out the US has very favorable laws towards the wealthy making it less necessary for people to hide their wealth.
bjacques
It was really rich Tony and Cherie Blair avoiding 300,000 quid stamp duty (5% home purchase tax) on a 6.5 million London townhouse by buying the offshore company that owns it rather than buying it from the company. It’s not the fraud that’s outrageous, but what’s allowed, if you’re rich and connected. EDIT: The back page of Private Eye is full of this stuff.
Baud
Kent
@Barbara: BNP Paribas also has very extensive holdings in the US. I believe they own Bank of the West https://en.wikipedia.org/wiki/Bank_of_the_West which operates in about 800 branch locations in the west and Midwest. So they have to play ball with the US regulators.
Ruckus
@Nelle:
Once again, as our national tax system is currently run, the big money can throw up so many roadblocks that the IRS can realistically not spend the effort to catch them, given their current (for a while now) funding. It’s not necessarily the laws that are the problem it’s the enforcement side that is. So the IRS scans a lot of relatively small time tax returns and finds the little things that may/likely aren’t actual fraud, just mistakes. They are doing their job, they just don’t have the resources to do the heavy lifting.
Ken
@Baud: The triumph of socialism.
Barbara
@Kent: Everyone has to play ball with U.S. and/or EU regulators. Unless you are willing to charter a jet to fly cash around the world, transactions of this size cannot take place without international banking conventions. The only surprising thing with BNP is that the DOJ was so pissed off it made clear that it was ready to follow through on a threat to what would have effectively been a death penalty for the bank. It did so because BNP deliberately slow walked an investigation into the culpable employees, thus making it possible for them to escape prosecution.
Bottom line, if a bank can’t electronically “transfer” or communicate with an other bank, life gets very difficult.
JCJ
@Ocotillo: Is it the case that payment for work under $600 does not need to be declared for tax purposes but once $600 or over it does? I think that was something in the past, but I am old and my memory is cloudy so I will defer to those who have actual knowledge.
catclub
Canada’s strategic maple syrup reserve was robbed, you know.
Poe Larity
@Ocotillo:
$600 is the max limit for ATM withdrawals for most people. Just another sign that Bin Laden won.
catclub
@JCJ:
Yeah, I think around $600 is the limit for w-2 income reporting.
Not sure if there is any lower limit on 1099 reporting
Ken
@Le Comte de Monte Cristo, fka Edmund Dantes: I’ve never been swimming and suddenly found a great white shark swimming next to me, but I imagine it would feel something like that.
ExpatDanBKK
@JCJ: I recall reading that it not $600 at a transaction level, but a $600 balance difference in income/outgo on an account. I don’t recall the reporting interval (month? quarterly? annually?) And no longer have the link. A search should find it though.
catclub
@danielx:
I suspect that the total volume of taxable transactions in the amount between $600 and $10k is not small. So yes there is.
raven
I wonder if Facebook got attacked, it’s down.
Goku (aka Amerikan Baka)
@Baud:
Cool. This is something I assumed was never going to happen because Republicans apparently hate it. I’m surprised DeJoy is implementing this
Another Scott
@Ocotillo: Made me look.
CAP:
It’s always good to keeps one’s skeptic hat handy.
HTH!
Cheers,
Scott.
Ken
Regarding the $600 limit, I’m remembering that bill that was posted here last year. It was from one of TFG’s hotels, to the RNC or some other Republican organization that was using the facility, and consisted of row after row of $9,990 hospitality charges. Setting a much lower limit would at least make it more annoying to hide payments in that way.Never mind, @Another Scott‘s post says this is unrelated.
Citizen Alan
@Ruckus: Beyond a certain income level, it is quite simple to have enough spare income to invest in real estate and other investment opportunities that let you make more money without doing anything. If I’d stayed in gov’t service after 2006 instead of going into a private practice that struggled for 12 years, I’m quite certain my gov’t salary over that decade or so would have let me purchase and flip-or-rent several houses in my neighborhood, possibly enough to be a millionaire by now. That’s why it never bothered me that the Soshulist Bernie Sanders was a millionaire. After decades in Congress, he’d have to be a spendthrift not to be.
Chief Oshkosh
@Goku (aka Amerikan Baka): My assumption is that DeJoy and his ilk have finally figured out how to profit from it, so they are enacting it.
raven
Le Comte de Monte Cristo, fka Edmund Dantes
@Ken:
Not a good feeling – and I have been swimming with sharks (black tips, grays and hammers), 8 footers zipping within a couple of feet of my head.
This felt a lot worse.
Funny story – one time night diving in Bonaire, I felt “not alone”. I swung my dive light left, and I had the company of about a six foot long tarpon. Swung right, and there was a similar sized guy there. They were borrowing the beam of my light to hunt.
Made sure I kept my hands in tight – those jaws could do a number on them.
Ken
@raven: Yeah, forget Skynet; if the global DNS ever becomes self-aware and asks “how can I ensure my continued existence”, the social media companies are going to be among the first to go dark.
Baud
@Another Scott:
Thanks. Bad policies sometimes slip through, but most of the time the criticism is BS.
Steeplejack (phone)
@MisterForkbeard:
I don’t know how you’re defining “most of the country,” but the median monthly rent in the United States was $1,098 in 2020.
Le Comte de Monte Cristo, fka Edmund Dantes
@Ken:
Its like NOBODY watched the BSG reboot and Adams’s remark about networked computers…
Ksmiami
@Kent: generally yes- plus most Billionaires in the USA are fully invested and never cash out directly; opting for special loans etc.. without cashing out, there’s no capital gains and no income. We don’t tax wealth in the US…
Ksmiami
@Ruckus: insider trading and secret bank donations
Ksmiami
@catclub: I read about that crazy heist!
Kayla Rudbek
@Ocotillo: dude, that’s more than a mortgage payment or rent here in Northern Virginia! Guess I have to contact my Congressman and Senators about this…
Roger Moore
@MisterForkbeard:
There’s another very important point you’re missing: Americans and Europeans are already closer to the center of the economic system. A corrupt person in the third world is much further from that economic center. Their money has been made in local currency and is going to be limited in what it can buy because the demand for local currency is limited. One of the first things they want to do is to convert their money into something more broadly accepted- dollars, euros, pounds, etc.- so they can spend it anywhere. Obviously that whole step is unnecessary for people whose money is already in those readily accepted currencies.
karen marie
@The Moar You Know: I don’t think he or anyone he hires has the know-how. So far what we’ve seen is been pretty basic shell games and outright theft of other people’s services.
Ksmiami
@Ruckus: the Waltons?
Dorothy A. Winsor
Fair Economist
@danielx: A six hundred dollar reporting requirement is to catch underground economy tax cheats, of which there are a lot; I know one small business which is almost all cash and I will bet they pay almost none of the taxes they should. It’s pretty minimal hardship to *report*; how much does it affect an honest person that their bank sends an electronic report on large ATM deposits? You wouldn’t even know.
Baud
@Dorothy A. Winsor:
https://youtu.be/rw9uNgvfJsY?t=83
Dorothy A. Winsor
@Baud: LOL. True. There are better uses for our time.
Ksmiami
@Dorothy A. Winsor: I hope the company disappears
SFAW
I call bullshit on this report: nowhere does it mention the billions of $$$ Hitlary and Al Gore have sheltered in a string of pizza joints used as a front for child sex trafficking. I hear the pizza joints keep stacks of greenbacks in vaults in their basements.
Ken
That’s green olives. Which is an entirely different crime against humanity.
Betty
@Barbara: Even then countries have limits on the amount of cash you can bring in.
Roger Moore
@SFAW:
As others have pointed out, the presence of some people in this leak doesn’t clear anyone who isn’t named. They might just use other companies to do their nefarious business. You’re going to have to wait until the hackers breach the Lizard People and The Elders of Zion before the truly juicy stuff leaks out.
burnspbesq
@Old School:
The U.S. has pretty significant reporting requirements, and tries to enforce them. Remember what Manafort went down for?
burnspbesq
@Anonymous At Work:
SD did away with the Rule Against Perpetuities, so you can set up a trust that goes on forever. “Dynasty Trusts” are state of the art, fully legal estate-tax avoidance devices.
Betty
@Roger Moore: In fact, the crooked ones can find numerous ways to get dollar income, such as the misuse of donor funds. Around here it includes selling passports to dubious international figures.
Betty
@Roger Moore: I was so hoping they caught our Prime Minister. Guess he is getting away with his gig for now. Lucky man.
RobertB
@JCJ: My brother won $2500 on a keno ticket or something like that the other day, and it had to be reported to the IRS.
Barbara
@Betty: Yes. It’s virtually impossible to do. An acquaintance who tried to liquidate an account in a foreign bank that would not transfer funds to an American bank (a very long story) tried to relocate the money in cash, and just let me tell you, this is not something you ever want to try to do. And the amounts involved were nowhere near what are being discussed in this article.
burnspbesq
@JCJ:
All income is supposed to be reported by the recipient, but if it is less than $600 the payor isn’t required to file a 1099, which makes it virtually impossible to trace.
Martin
@Kent: Well, Delaware is one of the best tax shelters in the world. Why buy foreign when you can buy domestic.
In other news, the invisible hand of big oil is now touching Laguna Beach.
Ken
@Betty: What if you fly with the cash to one country, then ask the US Embassy there to arrange a helicopter trip over the border? Asking for a friend in Oklahoma.
artem1s
you can bet we’d already know it if Hunter or Soros was on the list.
I seem to recall an IRS investigation into Swiss and European tax shelters. They offered a one time get out of jail free opportunity to the uber rich who had been hiding taxable income. There were lots of questions during the 2012 elections about whether RMoney took advantage. He never turned over his tax returns for that year when that late filing would have appeared. I’m sure this is anther one of the reasons 2008 Obama voters didn’t vote for him in 2012 and were so willing to let TFG get nominated in 2016. The GOP nominees were willing to let him have the nomination because they didn’t want to turn over their returns if they did. They didn’t think anyone had a snowballs chance to beat Hillary and they never imagined they’d get away with not turning over their returns the way TFG did.
I’m assuming some of them got SMRT and better at hiding it after the last time they got caught.
Jeffro
@Barbara:
@Betty:
@Ken: what about the old ‘hollow book’ trick? Does that still work? I would think that would still be good for hiding at least a couple Gs.
Martin
@catclub: Depends on the 1099 subtype. 1099-K like from an Etsy shop is $20K, proposal to lower that to $600 to pay for infrastructure.
Roger Moore
@RobertB:
Sure. But one of the things about the US monetary system, and the world’s economic system more generally, is that it focuses on protecting the edges and gateways to the system. We work very hard to close down all the ways somebody who has money outside the system can bring it in- reporting requirements on cash transactions, reporting of every gambling winning, etc.- but not nearly as much on what happens once money is inside the system.
That makes some sense. We’ve been working hard for the past hundred years or more to make sure more and more of the economy takes place within the system controlled by banks*. That leaves less and less of the economy in straight cash transactions, and that leaves the part being handled in cash ever shadier. That leaves those gateways between the banked and cash economy as important spots for criminals, and that makes monitoring them important.
The downside is that we tend to ignore what happens once the money is brought into the banking system. Money in a bank is treated as inherently clean, so we don’t spend nearly as much time and effort watching it to make sure it really is clean. Criminals who have figured out how to commit crime within the system rather than outside it can get away with a lot.
*IMO, this is a good reason to want something like postal banking that brings more of the economy into the light.
Martin
@ExpatDanBKK: It’s $600 per payee per year. So if you earn $600 from one business over a year, they need to file. It’s not a requirement on the taxpayer but on the business hiring you.
raven
@Martin: Not surprisingly, you were right.
Ken
Subtext: “We know there’s enough tax cheating going on to balance the budget and allow a lot of additional spending.”
ExpatDan
@Martin:
Actually it has nothing to do with income from work. Here’s the article to which I was referring: https://www.americanprogress.org/issues/economy/news/2021/09/14/503821/bank-tax-reporting-critical-component-bidens-build-back-better-agenda/
Another Scott
Ooof. Sounds like it should be more difficult to do that. :-/
Popehat has been battling the past week or more with a stupid stalker troll who has something against Loder.
Hmmm…
Cheers,
Scott.
Martin
@raven: Easy one to be right about. The current flows from north to south (which is why the ocean here is colder than in NJ where it flows from south to north) so unless they can buoy the whole damn thing, which they are struggling to do, then it’s going to keep moving south. It’ll dissipate as it moves somewhat.
If it moves any further north they’ll have to move the 1% and growing of the global container ship fleet that is moored off of Long Beach.
MattF
Re: the Facebook outage. Appears to be self-inflicted.
Martin
@ExpatDan: That provision has been dropped ATM. They’re currently only looking to bring the 1099 subtypes into alignment at $600. Might return, but I doubt it. If the goal is to pay for the bill by taxing the wealthy, the $600 deposit is more likely to scoop up your kids lawnmowing side hustle rather than Bezos.
It’s looking less like minmaxing the tax revenue, and more cleaning up the tax code to make things more consistent.
Barbara
@Jeffro: I can’t get into this too much, but let me just say that the USG seems to be quite adept at finding currency hidden in this way. Do you have any idea how much space $10,000 takes up? And if you are trying to transport considerably more than that, it’s just hard to do. I am sure it goes on, but I was surprised when I found out how the person I know was caught.
Baud
@MattF:
Suicide. The guilt was too much to bear.
Roger Moore
@Barbara:
It takes up some space, but surprisingly little if you can get it in $100 notes. I keep some cash around as part of my emergency preparedness kit, and 100 bills can be compacted into something quite small, especially if you vacuum seal it. I wouldn’t want to try smuggling the stuff- I’m sure all my smart ideas for how to hide it are well known- but it isn’t that bulky until you start dealing with a lot of it.
Mike in NC
Any organization that calls itself the “International Consortium of Investigative Journalists” pretty much tells you that no American reporters need apply.
Brachiator
@Emma from Miami:
Even though this work includes a huge amount of data, it still represents only a small portion of the income shelter industry.
Bill Arnold
@Old School:
Guessing that it’s a combination of (a) US Politicians not be massively corrupt on a world standard (we rank reasonably well) and (b) a small amount of luck.
There is not a lot out (yet) about how the leaks were acquired, but there were enough source companies that it is unlikely (IMO) that it was an op by US-friendly actors.
Cermet
@The Moar You Know: But he isn’t wealthy enough – not a billionaire by any measure.
sab
@catclub: In general, 1099-MISC has a $ 600 minimum. If you pay someone less than $600 miscellaneous income you do not need to issue them a 1099.
lowtechcyclist
My wife and I adopted our son from Russia, back when you could still do that. Let’s just say there was some cash involved. And yeah, $10K in hundreds really doesn’t take up much room.
Gin & Tonic
@Barbara: I can tell you that $5k in US currency easily fits into something like this.
Central Planning
@dm: Pantisocracy Papers
Barbara
@Roger Moore: If it were just one shipment of $10,000 you wouldn’t even need to worry about structuring — you could legitimately offload enough to be below the currency limits. If you have more than that, you have two choices, which is to risk doing what you are saying in one trip, with a larger amount, or to take multiple trips, which all by itself can raise suspicions, especially if it is too and from certain countries that are know to be banking shelters. Anyway, people who want to maintain a felony free lifestyle do not want to be put in the position of risking seizure at the border.
Anoniminous
@MisterForkbeard:
Don’t forget poor little ol’ J. K. Rolling. Her complaint about being “cancelled” was limited to 25,500 global media outlets.
Martin
The US also has this great tax shelter called a ‘farm’. Buy some farmland where it qualifies for low or no property taxes, tenant it out for 25%-50% of the take, and the federal govt will pay you crop insurance if the tenant doesn’t produce enough because the farm bill isn’t about farmers, but about land owners.
Who is the largest farm owner in the US? Bill Gates.
Anoniminous
@raven:
Word is their network engineers mucked with the config file which took the system down and simultaneously locked themselves out so everything has to be re-booted locally.
IOW, their own incompetence bite them in the ass.
Tony Jay
According to the FTF Guardian it is ‘potentially embarrassing’ for President Biden that South Dakota is named as a prime node in the Pandora Papers. It doesn’t make clear quite how this state of embarrassment might come about, since the last I heard SD was a Republican-run hellhole and Biden’s Administration has been a bit busy since January, but I think it runs something like this:
1) Biden said he was going to crack down on dodgy finance shit
2) South Dakota is in America
3) This proves Biden was lying/is on on it/is a failure.
I think that’s it. I found it hard to think clearly after the FTF Guardian defended me with high-pitched denials that the revelations about the Blairs being shady property tax dodgers actually meant that they were shady property tax dodgers, because they definately don’t mean that, for reasons. Most prominent of which appears to be because the FTF Guardian bloody well says so.
Wankers.
Gin & Tonic
OT, but I see some SoCal jackals here. Might be in the slightly-north-of-San-Diego area later this month with a little free time. Is the mission at San Juan Capistrano worth a visit? Yes, we’ve previously been to the S.D. Zoo, Torrey Pines preserve, etc.
Gin & Tonic
@Anoniminous: BGP is hard. Fucking it up is easy.
Chris Johnson
@Baud: Aw HELL yeah. I didn’t think I’d be seeing those words in that order in my lifetime :)
JCJ
@Roger Moore:
When my wife and I travel to Bangkok to visit her family (trans-Pacific flight departing Detroit or Minneapolis) we nearly always take along $3000 – $5000 in $100 notes. It is not bulky at all. We often see treasury department folks questioning some departing passengers (who are almost always Hmong) if they are carrying over $10,000. The agents stopped my wife once when she was traveling solo and went through a bunch of her stuff. When we travel together I always walk with her in the jetway so they leave her alone.
Roger Moore
@Anoniminous:
Yeah, the main people who complain about “cancel culture” are people who think they have a right to hold unpopular beliefs without challenge. It’s mostly people like fundamentalists, but the loudest group are people who are used to having a big audience and are surprised when they get pushback.
Jeffro
@Barbara: fwiw, I was just being a little facetious there. =)
I’m sure $10k in small bills takes up more room than your average hardcover book can handle.
Central Planning
@Gin & Tonic: That is true. I have yet to see how DNS fucks up BGP though.
Ken
Biden should use one of the President’s Reserve Powers[*] to revoke South Dakota’s admission and place the territory back under direct federal control.
[*] I didn’t realize the President had these, until TFG’s supporters started pulling them out of thin air.
Another Scott
@Tony Jay: IIRC, back in the ’70s? ’80s? South Dakota changed its banking laws to attract CitiBank’s credit card operations. I don’t know what else they did, nor what other banking operations are there, but I very much doubt that Citi is alone there.
Cheers,
Scott.
Ken
Yes, the proper tool for that is network security. You could deny connections on port 179, for example.
Anoniminous
@Gin & Tonic:
Got zero F’s to give. Yup, it’s hard. Tough noogies. It’s their job. For which they get paid A Lot.
Xenos
@burnspbesq: USD 599 is a pretty small amount for smurfing!
Meanwhile, the OECD keeps tightening. As someone in the international institutional space, it makes compliance complicated, but nbd in the end.
I worry about cowboys on the client side, though.
cain
@Le Comte de Monte Cristo, fka Edmund Dantes:
Aren’t you in fact doing cancel culture by converting to Islam – canceling evangelicalism???
Gin & Tonic
@Central Planning:
Tony Jay
@Ken:
@Another Scott:
Well that’s it then. The fact that Biden was alive and nefariously active in the 1970s/80s and has since refused to use the mighty Reserve Powers of the Gold-Fringed Flag Presidency to change South Dakota’s state constitution proves that Gary Busey and/or Sinese was right about the Treasure of Mount Rushmore.
Which is a relief, I suppose.
Gin & Tonic
@Central Planning: Anyway, it was the other way around, reportedly. The BGP routes to FB’s authoritative DNS servers were withdrawn from the global BGP tables.
Xenos
@Ken:Biden should use one of the President’s Reserve Powers[*] to revoke South Dakota’s admission and place the territory back under direct federal control.
That is my proposed constitutional amendment – any state that drops below 1/3 of 1% of the national population reverts to a federal territory. A bit like a political bankruptcy, to avoid such rotten boroughs.
Ken
@Xenos: It had never occurred to me that by definition, states average 2% of the population; and, given Zipf’s law[*], the majority of states have less than 2%.
[*] “Not really a law, but the universe follows it anyway”
gene108
@Ocotillo:
Any income earned under $600 does not need to be reported to the IRS. If I did some odd jobs for a small company, and they cut me a check for $500 neither the company nor I are required to report this.
If I did a bit more work and got a check for $700, this should be reported by the company issuing me a 1099 and I report on my tax return.
This often gets overlooked for amounts not substantially over $600, which is sometimes due to an oversight by the employer maybe booking it in an expense category that normally doesn’t generate 1099’s and/or by the recipient just failing to report the amount on their taxes for whatever reason.
The audit risk for this is low, if the amounts are relatively small. If banks report transactions over $600, then an audit trail gets generated for the IRS. They can check to see that gene108 got deposited a check for $700 and why wasn’t that reported as income.
I’d probably get a letter asking about it and if I need to amend my return, at most. But it gives the IRS a tool to track under reporting of income, especially by Schedule C filers, like unincorporated contractors.
Edit: This is my guess anyway as to part of the reason for the change in the law.
Xenos
@Ken: without going into all the notation, if the mean Is 2%, the lowest population state can not get below 0, and California is how big?
I guess that is why the median is, I think, KY at 4.5 million.
My first version of this was to set the limit to 1%, or 3.34 million. That would leave us with just 30 states!
The Lodger
@Tony Jay: It probably would have embarrassed Biden more if South Dakota hadn’t decided to enact some really lenient banking regulations in the 70s or 80s, because SD did that to take the business away from Delaware.
sab
@Tony Jay: South Dakota has been financially dodgy for most of my adult life, and I am old and collecting Social Security. Usery and shifty finance is one of their local industries. Userous credit cards. Good God, you don’t need to be on a Carribbean or Mediterranean island to be financially slimy.
Gary K
As it happens, I just watched “Official Secrets,” a movie that inspired me to google the phrase “Tony Blair lying sack of shit.” And here he is again!