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How the U.S. Became a Top Secrecy Jurisdiction

Sometimes, ranking near No. 1 in the world is not a badge of pride. According to the Financial Secrecy Index released by the Tax Justice Network (TJN), the United States is the second largest contributor to financial secrecy in the world, placing it in the company of infamous tax havens such as Switzerland (ranked No. 1) and the Cayman Islands (ranked No. 3). Financial secrecy is enabling people to hide income from the authorities to evade taxes or financial regulation, launder profits from crime, finance terrorism, or otherwise break the law.

As the new TJN report explains, the United States contributes more to financial secrecy in the world than any country other than Switzerland for two reasons. First, this country has the largest share (22.3 percent) of the global market for offshore financial services. Second, several U.S. states promote financial secrecy by allowing individuals to form corporations without providing any real identifying information. In some states, people who want a library card must provide more identifying information than those who want to incorporate. The result is a huge amount of money held in shell companies in the United States that cannot be traced to any individual anywhere in the world.

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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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U.S. Tax Plan’s Spiraling Consequences for Human Rights and Poverty – At Home and Abroad

As the United States Congress considers drastically altering its tax code, my organization — the Center for Economic and Social Rights (CESR) — has brought the spiraling human rights costs of the proposed U.S. tax cuts to the attention of a leading UN human rights official visiting the U.S. to look into poverty in the country.

On Dec. 1 – the morning before the U.S. Senate rushed through a lopsided and dysfunctional tax plan to unfairly benefit the top tiers of the economy while costing ordinary people within and outside the U.S. dearly — the UN Special Rapporteur on Extreme Poverty and Human Rights Philip Alston launched his official visit to the US to investigate the links between the growing phenomenon of poverty and human rights deprivations there.

In advance of his visit, we made a formal submission entitled Fiscal Impoverishment in the United States, warning that the Republican-backed tax plans would only deepen poverty and inequality within the U.S., while also enabling transnational tax abuse and undermining the ability of countries around the world to invest in human rights.

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Shopping for a Tax Haven: How Nike and Apple Accelerated Their Tax Avoidance Strategies, according to the Paradise Papers

A year and a half after the release of the Panama Papers, a new set of data leaks, the Paradise Papers released by the International Consortium of Investigative Journalists (ICIJ) provides important new information on the tax dodging of wealthy individuals as well as multinational corporations.

The leaked data, about 13.4 million files in total, exposes the tax avoidance schemes and strategies of wealthy and powerful individuals, as well as large corporations. More than 7 million of the files were obtained from the offshore law firm Appleby. The 119-year-old firm is a leading member of the global network of lawyers, accountants, bankers and other operatives who set up and manage offshore companies and bank accounts for clients who want to avoid taxes or keep their finances under wraps.

It is no secret that corporations like Nike and Apple are holding billions of dollars offshore for tax avoidance purposes, but the Paradise Papers give us a deeper look into what these tax avoidance schemes look like, and show that Apple’s leadership has aggressively moved to reinvent these schemes while simultaneously proclaiming their innocence.

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House Tax Plan Would Make Offshore Tax Avoidance Substantially Worse

The release of the Paradise Papers has once again brought the issue of offshore tax avoidance to the forefront of public discussion. The papers expose the complex structures that companies such as Apple and Nike have pursued in recent years to pay little to nothing in taxes on their offshore earnings.

Yet even as these revelations make headlines, House Republicans are moving forward with major tax legislation, the Tax Cuts and Jobs Act, that would reward the worst tax avoiders and make it even easier for multinational companies to avoid taxes.

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