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Jacob Wills

Jacob Wills is the Communications Associate with the FACT Coalition.

Just the FACTs: July 18, 2018

After 2 years of bipartisan negotiations, without warning or fanfare, the leadership of the U.S. House Financial Services Committee stripped beneficial ownership provisions out of a bipartisan anti-money laundering bill and planned a Committee vote.

A decision was made to drop beneficial ownership because it was thought to be controversial and a stripped down bill would “pass easily.” However, as FACT’s executive director describes in this op-ed in the American Banker, that was simply not the case.

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Just the FACTs: April 19, 2018

In January, we were optimistic that this would be the year anonymous companies would end.  Since then, the momentum for disclosure has only grown. Legal scholars and international affairs experts have recently called for action, a recent poll showed overwhelming support from small businesses, and a report from Fair Share reminded us that anonymous companies are continuing to fuel the opioid epidemic.  Between these and a recent investigation by Reuters that found Russians are using a web of anonymous companies to skirt U.S. sanctions and boost the government of Syria’s Bashar al-Assad, Iran’s Revolutionary Guard, and the Hezbollah militia, the arguments for secrecy are becoming more and more invalid.

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Just the FACTs: February 23, 2018

Movements to end anonymous shell companies exploded in 2017, already this year the momentum has ballooned.  With several committees in the House and Senate taking up the issue and a broad-based, bipartisan coalition calling for action, the previously elusive transparency measure is no longer a long-shot.

Two recently released reports exemplify why the momentum needs to continue.  The 2018 Financial Secrecy Index provides insight into secrecy jurisdictions globally and the Polaris Project’s report, Human Trafficking in Illicit Massage Businesses, reveals (among other things) how the abhorrent industry of sex trafficking is shielded behind anonymously registered businesses.

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2018: The Year Anonymous Companies End

2018 is shaping up to be the year that the abuse of Anonymous shell companies is finally put to an end in the United States.  Last week, the Senate Banking Committee held their second hearing of the month, and, just like the first hearing, the witnesses urged members to take action on anonymous companies.  One of the witnesses, Acting Deputy Assistant Attorney General M. Kendall Day, repeatedly called on lawmakers to tackle beneficial ownership requirements, adding that it would allow them to “bring more cases, more quickly, with more impact if we had a better system in place to make that information available to law enforcement.” Pressed by Sen. John Kennedy (R-LA) the second witness, Treasury Under Secretary for Terrorism and Financial Crimes Sigal Mandelker, responded that they were studying the issue carefully and hoped to have recommendations within 6-months.

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Just the FACTs: November 17, 2017

When the Panama Papers were released just a little over a year ago it sent shockwaves throughout the world.  The massive scale of the leak and the VIP’s that it implicated outraged a public that had already seen the wealthy and corporations as not paying their fair share.  Though, with all that the leak revealed, an important question was on everyone’s minds, where are the Americans?  This past week, it seems, we found them.

The Paradise Papers—a leak of 13 million documents from Appleby, a large offshore law firm—contains details on tax avoidance techniques of at least 31,000 U.S. citizens, residents and companies. This includes household names like Apple, Nike, and Uber.  While governments have moved to crack down on tax avoidance schemes, documents in the leak show how Apple and Nike were able to outrun regulators by exploiting gaps between differing tax codes.

Just a few days before the leak, House leaders released a tax plan that rewards companies for creating complicated tax avoidance structures like those found in the leak.  It is, in effect, a gift to the multinational companies that have dodged taxes for years by offshoring profits and jobs with an estimated $458 billion tax giveaway on the profits that are currently offshore.  In 2004, a similar measure was used in an effort to create jobs yet the multinationals who benefited most from the repatriation holiday slashed 20,000 U.S. jobs over the next two years.

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Territorial: The Hidden Danger Beneath the Tax Rate Debate

Our tax system is fundamental to our democracy, delineating who pays the costs of a functioning civilization. But the system is broken, leaving an undeniable imbalance between the working and middle-classes and the wealthy and multinational companies. It would seem to follow then that the focus of tax reform should be around correcting this imbalance by targeting those that have gamed the system and flagrantly avoided taxation. Yet, the priority for Congress and the administration seems to be to exacerbate tax avoidance with greater incentives for shifting profits offshore.

There is currently $2.6 trillion booked offshore — untaxed — by multinational companies. This is the result of a gaping loophole for multinationals known as deferral, where a company can delay paying taxes until the profits are “repatriated” to the U.S. The administration has frequently cited this number as a reason our tax code needs “reform,” and, on that point, there is broad agreement. Our tax system undoubtedly needs reform, though, their solution—to simply not tax offshore profits—misses the point.

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