Just the FACTs: April 12, 2017

Welcome to our “Just the FACTs” newsletter, which aims to highlight pertinent news stories and information related to our goals of curtailing offshore tax haven abuses, increasing the transparency of company ownership, and curbing the laundering of illicit money through the financial system.

Send feedback or items for future newsletters to Jacob Wills at jwills@nullthefactcoalition.org.


State of Play

Last April, the world’s attention was captured by a global investigation revealing more than 11 million documents from a Panamanian law firm documenting a secret financial network reserved for the wealthy and corrupt.  Now, one year later, the “Panama Papers” was just awarded the prestigious Pulitzer Prize for Explanatory Reporting, while experts are reflecting on how far we’ve come and how much farther we really need to go.  There is no doubt that the “Panama Papers” release reverberated throughout the world, but—with the extent of the problem the information exposed—it’s clear not enough has been done.

In a statement marking the the anniversary, FACT’s Gary Kalman graded the global response to the Panama Papers a “C-”, calling the progress “more scattershot than comprehensive.”  Though some real progress has been made, more must be done, especially when it comes to ending the abuse of anonymous companies.  In a blog that followed, he further reflected on this past year and made a prediction for the future—saying he is optimistic that, by the next anniversary, our grade will improve.

In similar fashion, FACT members and allies used the anniversary—which also coincided with the “Global Week of Action to #EndTaxHavens”—as an opportunity to step back and assess our progress.  In a blog, Global Financial Integrity’s Tom Cardamone urged that the anniversary should be seen as an “opportunity to underscore the severity of the problem.”  For years leaks have been pivotal in exposing the secret world of shell companies and tax havens, but what if they weren’t necessary?  In another blog, Global Witness’ Mark Hays asked us to remember why leaks are such a big deal—because so much information is kept hidden in the first place. He pointed out “we shouldn’t have to wait for massive leaks like the Panama Papers to shed light on the inner workings of criminal and corrupt activities.”  Though there is no doubt that the Panama Papers were immensely helpful, without increased transparency the corruption they exposed will continue.

As if on cue, a new report from Transparency International details how anonymous companies have allowed money-laundering from grand corruption to permeate housing markets in Australia, Canada, the U.K., and the U.S.  Strikingly, the report finds that U.S. high-end real estate’s attractiveness as a safe haven for shady investors is driving up the cost of housing—pricing many people out of the market. At the same time, since the homes are acting primarily as a tool for money-laundering, as much as 40% of properties in some neighborhoods are left vacant.

Recently, experts debated the merits of increased corporate transparency at a forum at the Brooking Institute.  Charles Davidson, Executive Director of the Kleptocracy Initiative, warned of the immense risks to national security and democracy posed by anonymous companies.  These concerns were echoed by Norm Eisen, former Ethics Czar for the Obama Administration, who added a warning about a burgeoning threat of oligarchy here at home.  In response to concerns the Chamber of Commerce had to legislation proposed, Davidson suggested that–with the immensity of the threat on a global scale–the Chamber should stop perpetuating the problem through blanket opposition to any solution and instead come up with a solution they could support.

As tax day quickly approaches, a flurry of new bills were introduced by lawmakers in the Congress last week to combat offshore tax haven abuse—similarly marking the Global Week of Action to #EndTaxHavens.”  Bills from Rep. Lloyd Doggett and Sen. Sheldon Whitehouse take precision aim at a number of tax haven loopholes, while Rep. Mark Pocan introduced a bill that could serve as a template for positive tax reform: it ends deferral, combats inversions, and boosts transparency of multinational tax avoidance with public country-by-country reporting.  “The comparatively simple reforms in this bill would curb the gaming of the tax code and ensure that wholly domestic and small businesses can compete more fairly with multinationals. Rep. Pocan’s legislation should serve as a template for what positive tax reform looks like,” noted FACT’s Clark Gascoigne in a statement.


From the FACT Coalition and Its Partners

Incorporation Transparency

On First Anniversary of Panama Papers Release, What Have We Learned?

FACT Coalition, April 6, 2017

By Gary Kalman

This week marks the anniversary of the Panama Papers, a leak of more than 11 million documents exposing widespread corruption and illicit financing involving 140 public officials in more than 50 countries around the globe. The leak, large as it was, included documents from just one law firm and, had reverberations throughout worldwide. The impact was profound, but was it enough? And what did we learn?

For those not steeped in money laundering practices and illicit financial flows, the Panama Papers showed the world how it all works. If you want to finance terror; steal from taxpayers; traffic in humans, weapons, or drugs; or evade taxes, anonymous shell companies are the vehicle of choice. The Panamanian law firm Mossack Fonseca showed that these entities were easy to set up, inexpensive to maintain, and able to provide legal secrecy even if covering up underlying illegal activity

Read the full blog
Read FACT’s new release
Read McClatchy DC Bureau article


A Year After Release, Panama Papers Remain Evergreen

Global Witness, April 3, 2017

By Mark Hays

One year on, the impact of the Panama Papers has been profound. Government officials have resigned. Executives have been sacked. Criminal charges have been filed.  But, arguably, the biggest impact the expose has had is what the documents tells us about the true value of transparency as a tool to uncover wrongdoing and to hold the powerful to account.

When the International Consortium of Investigative Journalists (ICIJ) released the Panama Papers last April, the sheer size of the leak was shocking; millions of documents and hundreds of thousands of secret companies, spanning across 2 terabytes of data. Yet, what the data revealed was even more profound: a full cross section of offshore financial industry secrecy that showed countless links to organized crime and tax evasion schemes, and exposed a myriad of public officials and high-powered executives systematically using this shadow financial system for private gain.

Read the full blog


Panama Papers Anniversary Is Opportunity to Underscore Severity of the Problem

Global Financial Integrity, April 3, 2017

By Tom Cardamone

Believe it or not, the Panama Papers scandal has an upside: it shed light on the dark corners of the international financial system. Prior to the revelation that one law firm helped establish over 200,000 anonymous companies, the casual observer knew tax evasion, corruption, and money laundering occur in the world but they didn’t know quite how it works. Now the term “anonymous shell company” has some resonance and it is in the general lexicon — even if most people still can’t explain how they work.

The bad news is that while there have been some very nice pledges by governments to do more to address the issue of anonymous shells, there hasn’t been a lot of action. Moreover, with a year behind us since the story broke, we have had time to reflect on fact that Mossack Fonseca—the law firm in question—is but the tip of the iceberg when it comes to companies with opaque ownership. Indeed, while Mossack Fonseca specialized in this service, a law firm need not focus on this line of work to be able to complete a company formation in short order. In fact, a law firm isn’t required at all. Simply Google ‘LegalZoom’ and you can setup your own anonymous shell company, complete with a registered agent, in under ten minutes and for about $300.

Perhaps the most frightening thing about these ‘ghost’ companies is that they are perfectly legal.  

Read the full blog


One Year Anniversary of Panama Papers Leak

Jubilee USA, April 3, 2017

By Greg Williams

More than 11 million documents were leaked from a law firm based in Panama a year ago today. The “Panama Papers” implicate various global figures and officials in possible acts of fraud and corruption.

“The Panama Papers reveal a secret network of shell companies and firms that can hide when government officials steal from their people,” noted Eric LeCompte, Executive Director of the religious development group Jubilee USA. “Congress can shine a spotlight on these activities. Congress needs to act.”

Read the full blog


State Incorporation Laws: Good For Crooks, Bad For Banks

Brookings Institute, April 9, 2017

By Aaron D. Klein

One of the core tenets of America’s strategies to fight terrorism finance and money laundering is that financial institutions are under an affirmative requirement to “know your customer” — or KYC.

The KYC abbreviation has become ubiquitous in financial services regulation. It often appears alongside AML (for anti-money-laundering). But despite KYC’s importance, corporations are still allowed to leave a lot unknown about their ownership. They can still legally set up anonymous shell entities that are entitled to open bank accounts and are not required to provide information regarding the company’s beneficial owners.

This practice received heightened international attention almost one year ago with the publication of the now-infamous Panama Papers. How can banks be expected to know their customer when the customer is entitled to anonymity?

Read the full op-ed


Secret Companies Allow Corrupt Cash to Flood the Biggest Real Estate Markets

Financial Transparency Coalition, March 29, 2017

Transparency International said today that the governments of Australia, Canada, the UK and the US need to close glaring legal loopholes to prevent the corrupt elite from laundering the proceeds of grand corruption in their local real estate markets.

In a new report, Doors Wide Open: Corruption and Real Estate in Key Markets, Transparency International identifies the ten main problems related to real estate and money laundering in those four countries and makes recommendations on how to address them.

Read the full report
Read the full news release
Read Transparency International news release


How to End the Practice of Anonymously Held Corporations, One Year Post-Panama Papers

Brookings Institution, March 27, 2017

By Aaron Klein

One of the core tenets of America’s terrorism finance and anti-money laundering (AML) strategies is that financial institutions are under an affirmative requirement to ‘know your customers’—or KYC. The centrality can be seen in the ubiquity of the KYC acronym, often appearing alongside AML as a merged six-letter shorthand.

Despite the importance of the tenet, however, corporations are still legally able to set-up anonymous shell entities that are entitled to open bank accounts and not required to provide information regarding the company’s beneficial owners—a shady practice that received international attention almost one year ago with the publication of the now-infamous Panama Papers. How can banks be expected to know your customer, when the customer is entitled to anonymity? What are the implications of anonymous ownership and of revising this practice?

Read the full news release


Tax

New Bill Ends Offshoring — Offering Sensible Tax Reform Template

FACT Coalition, April 6, 2017

New legislation introduced Thursday by Rep. Mark Pocan (D-WI) takes aim at the biggest offshore tax avoidance loopholes, offering a sensible template for tax reform, according to the Financial Accountability and Corporate Transparency Coalition (FACT Coalition), a non-partisan alliance of more than 100 state, national, and international organizations working toward a fair tax system that addresses the challenges of a global economy.

Introduced during the “Global Week of Action to #EndTaxHavens”, the bill specifically ends the biggest offshore tax loophole (the practice known as deferral), it cracks down on earnings stripping (to disincentivize inversions), and it increases transparency by requiring multinationals to publicly report their profits and taxes on a country-by-country basis.

Read the full news release
US PIRG news release
US PIRG one pager

New Bills Take Aim at Offshore Tax Haven Abuse

FACT Coalition, April 5, 2017

Stop Tax Haven Abuse Act and Corporate EXIT Fairness Act Would Close Many of the Most Egregious Offshore Loopholes

Congressional lawmakers introduced two measures Wednesday to close a number of offshore tax haven loopholes in a move welcomed by the Financial Accountability and Corporate Transparency Coalition (FACT Coalition), a non-partisan alliance of more than 100 state, national, and international organizations working toward a fair tax system that addresses the challenges of a global economy.

Read the full press release
CTJ’s blog


The House Tax Plan Won’t Stop Big Companies From Gaming the System

The Hill, March 27, 2017

By Gary Kalman

For all the concerns raised by economists and others about the House tax plan, it is generally assumed that the proposal will reduce the gaming of the tax system by multinational corporations. Among the more active debates: Will the currency adjust perfectly or will retail prices rise? Is the plan legal under our trade agreements? Do foreign investments take a dive?

While all those questions are hotly debated, consensus is that the current gaming will end. “Not to worry,” we are told, “that’s covered.” In a recent article, Marty Sullivan, chief economist at the nonpartisan Tax Analysts, was quoted saying that “the basic, fundamental structure of it seems much more resilient to gaming — by far.”

Read the full article


Offshore Tax Haven Lobby Makes Push to Defend Tax Evaders

FACT Coalition, March 27, 2017

By Clark Gascoigne

Strengthen Measures against Offshore Tax Evasion — Don’t Repeal Them

The offshore tax haven lobby is out in force this month — kicking off a media and lobbying blitz against the Foreign Account Tax Compliance Act (FATCA), a sensible transparency measure to ferret out offshore tax evaders.

The Wall Street Journal editorial board completely misconstrues FATCA as government overreach in its March 2nd editorial, “My Big Fatca IRS”.  The Journal writes:

“Almost since the Foreign Account Tax Compliance Act (Fatca) became law in 2010 to go after fat cats stashing money abroad, these pages have reported that it has led the IRS to treat law-abiding Americans as criminals…

“With the GOP controlling Congress and White House, the time is ripe for Republicans to make good on their pledge and give Fatca the heave-ho.”

The Journal’s editorial was echoed last week by several pro-tax haven groups in a letter to lawmakers.  The editorial and the letter are off-base.

Read the full news release


Fortune 500 Companies Hold a Record $2.6 Trillion Offshore

ITEP, March 29, 2017

It’s been well documented that major U.S. multinational corporations are stockpiling profits offshore to avoid U.S. taxes. Congressional hearings over the past few years have raised awareness of tax avoidance strategies of major technology corporations such as Apple and Microsoft, but, as this report shows, a diverse array of companies are using offshore tax havens, including the pharmaceutical giant Amgen; apparel manufacturers Levi Strauss and Nike; the financial firm American Express; banking giants Bank of America and Wells Fargo, and lesser known companies such as Oracle and Symantec.

All told, Fortune 500 corporations are avoiding up to $767 billion in U.S. federal income taxes by holding more than $2.6 trillion of “permanently reinvested” profits offshore. In their latest annual financial reports, 29 of these corporations reveal that they have paid an income tax rate of 10 percent or less in countries where these profits are officially held, indicating that most of these profits are likely in offshore tax havens.

Read the executive summary
Read the full report
Read CTJ’s blog
Read FACT’s news release


How to Shut Down Offshore Corporate Tax Avoidance, Full Stop

Citizens for Tax Justice, April 7, 2017

By Richard Phillips

A new bill introduced this week by Rep. Mark Pocan (D-WI), the Tax Fairness and Transparency Act, would rip out the offshore corporate tax avoidance system by its roots. This legislation combines into a single, comprehensive bill elements of three pieces of legislation that Rep. Pocan has proposed in previous years.

While many drivers of offshore corporate tax avoidance exist, the single biggest one is companies’ ability to defer paying taxes on their offshore earnings. According to official estimates, this provision of the tax code, known as deferral, will cost the U.S. Treasury about $1.3 trillion over the next 10 years.

Read the full blog


Mobile Money: New Disclosures Reveal the World’s Big Banks May be Dodging Billions in Taxes

Oxfam America, March 28, 2017

Oxfam’s analysis of new data shows that American and European banks appear to be moving billions of dollars in profits to tax havens, making it harder for countries all over the world to invest in schools, roads, and hospitals, and other vital services to lift their citizens out of poverty.

When asked why he robbed banks, Willie Sutton famously responded, “Because that’s where the money is.”  In 2017, that brilliant answer no longer holds—to access banks’ money today, Willie would have to book a flight to Ireland, Luxembourg, or the Cayman Islands—the preferred destination for more and more of the profits made by the world’s biggest banks.

Disclosures mandated by new European Commission laws reveal brazen signs of tax dodging by the largest American and European banks, according to a new report, “Opening the Vaults,” released today by Oxfam and the Fair Finance Guide International.  At the same time, new tax reform proposals by President Trump and Congress would make it easier, not harder, for American companies to take advantage of glaring tax loopholes.

Read the executive summary
Read the full report


A Comparative Analysis: Tax Rates Paid by Companies for and Against the Border Adjustment Tax

Citizens for Tax Justice, March 30, 2017

By Richard Phillips

It’s often noted that corporate tax reform is difficult, in part, because it creates so many winners and losers. As Congress turns its attention to federal corporate tax reform, the House GOP’s proposed border adjustment tax, which is intended to raise enough revenue to justify cutting the corporate tax rate from 35 to 20 percent, is quickly demonstrating the truth of this statement. Corporate lobbyists representing different business sectors have created competing coalitions to lobby for and against the border adjustment: Americans for Affordable Products, a coalition of retail giants, opposes the plan, while the American Made Coalition supports it.

A close examination of average tax rates paid by companies in each coalition reveals the counterintuitive reality that those supporting the border adjustment tax are generally already paying low corporate tax rates, while those opposing the proposal are generally paying higher rates.

Read the full blog


New Estimates Reveal the Extent of Tax Avoidance by Multinationals

Tax Justice Network, March 22, 2017

New figures published today by the Tax Justice Network provide a country-level breakdown of the estimated tax losses to profit shifting by multinational companies. Applying a methodology developed by researchers at the International Monetary Fund to an improved dataset, the results indicate global losses of around $500 billion a year. The figures appear in a study published today by the United Nations University World Institute for Development Economics Research (UNU-WIDER, in Helsinki).

While this global total is more cautious than the $600 billion estimate of the IMF researchers, the distribution is also different. Losses are now estimated to be even more intense in lower-income countries in relation to GDP and as a proportion of total tax revenues. In addition, today’s estimates include the full country breakdown.

Read the rest of the news release
TJN Profit Shifting Tax Loss Estimates
United Nations University study
Bloomberg BNA article


Transnational Crime

Shell Knew

Global Witness, April 10, 2017

It’s one of the biggest corruption scandals in the history of the oil sector – and this is the biggest development so far.

Damning new evidence shows oil giant Shell took part in a vast bribery scheme that robbed the Nigerian people of over a billion dollars.

Internal Shell emails seen by Finance Uncovered and Global Witness show how the world’s fifth biggest company took part in a scheme which deprived Nigeria and its people of $1.1 billion in a murky deal for access to one of Africa’s most valuable oil blocks, known as OPL 245.

For years, Shell has denied it did anything wrong, but today’s emails show they knew the money would be diverted to private hands, and they went ahead with the deal anyway.

This is devastating for the people of Nigeria. Right now five million of them face starvation. The money paid for the block equates to one and a half times what the UN says is needed to respond to the current famine crisis. But the Nigerian people saw none of the benefits.

Read the full news release
Read the full report
Bloomberg article


Transnational Crime and the Developing World

Global Financial Integrity, March 29, 2017

This March 2017 report from Global Financial Integrity, “Transnational Crime and the Developing World,” finds that globally the business of transnational crime is valued at an average of $1.6 trillion to $2.2 trillion annually. The study evaluates the overall size of criminal markets in 11 categories: the trafficking of drugs, arms, humans, human organs, and cultural property; counterfeiting, illegal wildlife crime, illegal fishing, illegal logging, illegal mining, and crude oil theft.

The combination of high profits and low risks for perpetrators of transnational crime and the support of a global shadow financial system perpetuate and drive these abuses. The report also emphasizes how transnational crime undermines economies, societies, and governments in developing countries. National and global policy efforts that focus on curtailing the money are needed to more successfully combat these crimes and the illicit networks perpetrating them.

Read the executive summary
Read the full report

 


Extracting Compliance

Kleptocracy Initiative, April 4, 2017

By Casey Michel

For the past few years, Azerbaijan’s lobbying throughout the West has focused on two primary projects. Firstly, Baku employed its “caviar diplomacy” – its admixture of wining and dining European and American lawmakers and academics alike – to help whitewash its lurch into outright autocracy, with Azerbaijan having recently boasted double the number of political prisoners of Russia and Belarus combined. The efforts have been, to a certain degree, successful, ranging from the Parliamentary Assembly of the Council of Europe’s warmth toward the Aliyev regime to landing Lady Gaga for Azerbaijan’s 2015 European Olympic Games.

Secondly, Azerbaijan’s lobbying efforts aimed at ginning support for Baku’s position as a provider for the Southern Gas Corridor, a series of gas pipelines transiting Caspian gas to European markets. Comprising both the Trans-Anatolian Pipeline (TANAP) and Trans-Adriatic Pipeline (TAP), the proposed lines would, to a certain degree, help lessen European dependence on Russian hydrocarbons. The pipelines’ funding came from a range of international financial organizations – including one, the European Bank for Reconstruction and Development, which explicitly pointed to Azerbaijan’s membership in the pro-transparency Extractive Industries Transparency Initiative (EITI) as reason for support. Indeed, in 2016, EBRD officials cited Azerbaijan’s involvement with EITI as “a key factor” in supplying pipeline funding.

Read the full blog


Issues in the News

Incorporation Transparency

United States of Anonymity: After Panama Papers, U.S. Emerges as Haven for Opaque Businesses

100 Reporters, April 5, 2017

By Aishvarya Kavi

The United States has stepped up its fight against terrorism since President Donald Trump took office, more than doubling the number of drone strikes and putting boots on the ground in Iraq. Yet on the home front, lax financial regulation allows terrorists and international criminal organizations to launder and stash money that fuels illicit activity worldwide, according to a panel of experts on corporate transparency.

Whitehouse spoke at a forum at the Brookings Institution, reviewing the state of corporate transparency a year after release of the Panama Papers. That investigation, spearheaded by the International Consortium of Investigative Journalists, exposed scores of politicians, corporate leaders and celebrities who held billions of dollars in secret accounts and anonymous shell companies. The revelations propelled the European Union to beef up global tax disclosure standards and launch investigations into money laundering and tax evasion. The UK, Spain, Germany, Italy and France have also enacted new transparency legislation.

Read the full article


Panama Papers wins Pulitzer Prize

ICIJ, April 10, 2017

By Michael Hudson

Columbia University announced today that the Panama Papers investigation has been awarded the Pulitzer Prize for Explanatory Reporting.

The Pulitzer Prize Board lauded the year-long investigation for “using a collaboration of more than 300 reporters on six continents to expose the hidden infrastructure and global scale of offshore tax havens.”

Read the full article


HSBC Shows ‘Support’ for Public Beneficial Ownership Registers

Bloomberg BNA, March 27, 2017

By Ben Stupples

HSBC Holdings Plc, Britain’s largest bank by market capitalization, has privately expressed support for public company and trust ownership registers, marking a boost for tax transparency efforts.

Representatives from the London-based bank said they “support” public beneficial ownership registers in a Feb. 10 meeting with the EU’s Panama Papers inquiry committee, according to a confidential report seen by Bloomberg BNA.

Read the full article


Money Laundering is Shaping US Cities

Washington Examiner, March 27, 2017

By Joseph Lawler

Thirty percent of the cash purchases of high-end real estate by shell companies in six major cities involved a suspicious buyer, according to an investigation conducted by the Financial Crimes Enforcement Network to find out who was behind the deals.

In other words, money laundering plays a significant role in shaping U.S. cities.

But money laundering is only one reason that foreign investors might pour money into luxury condos and exclusive addresses. Foreigners also prize expensive real estate because it allows them to evade taxes in their home countries or escape government restrictions on using their own money.

Read the full article


Feds May Enlist Advisors in Battle Against Money Laundering

CNBC, March 28, 2017

By Darla Mercado

As President Donald Trump continues his rollback of regulations, the fate of one that would hold financial advisors accountable for money laundering is uncertain.

In 2015, the Financial Crimes Enforcement Network, an arm of the Treasury Department charged with thwarting money laundering, proposed a rule that would require advisors registered with the Securities and Exchange Commission to establish methods to combat the practice.

Specifically, those rules would require advisory firms to develop a written program to deter bad actors from using advisors to launder money to finance illicit activities.

Read the full article


Tax

Author Looks To Other Countries To Rethink America’s Complicated Tax Code

National Public Radio (NPR), April 3, 2017

By Terry Gross

This is FRESH AIR. I’m Terry Gross. It’s tax time in two ways. While those of us who are last-minute folks are either trying to make sense of the often incomprehensible tax forms or paying someone else to do it for us, the Trump administration is trying to move forward on the president’s promise to overhaul the tax system. So the timing is perfect for my guest T. R. Reid’s new book, “A Fine Mess.” The mess he refers to is our bizarrely complicated tax code.

The book compares our system with those of other countries in an attempt to figure out what a simpler, fairer and more efficient system might look like. Reid is a former Washington Post foreign correspondent and has lived with his family on three other continents. He has two previous books about subjects that remain urgent – the quest for better, cheaper and fairer health care and the future of the European Union.

Read the entire transcript or listen to the podcast


Tax Reform: Five Headlines You’re Sure To Read

Forbes, March 30, 2017

By Tony Nitti

The flames had not yet cooled on the American Health Care Act — the GOP’s seven-years-in-the-making plan to repeal and replace Obamacare — before Republican leaders had moved on to its next top priority: tax reform. And from that emphatic pivot was born a golden moment for people like me; after all, it’s not often that tax law rises to the forefront of the public consciousness. But that’s where we’re heading…maybe for mere weeks, but possibly for months or — dare I say it? — years.  A time where discussions of deductions and talk of tax brackets will dominate newspaper pages, Facebook timelines, and Twitter feeds.

Read the full article


Rich People Love Tax Havens—and Under Trump, The Problem Will Only Get Worse

Quartz, March 29, 2017

By Casey Michel

Buried beneath last week’s faltering health-care vote and revelations about the FBI’s investigation into the Trump campaign was a development that, for another administration, would have dominated news cycles. Documents unearthed in Ukraine by a journalist-turned-MP revealed that Paul Manafort, US president Donald Trump’s former campaign manager, was allegedly involved in an offshoring scheme involving hundreds of thousands of dollars, tied to at least one shell company and one post-Soviet bank.

To be sure, these allegations at the moment are just that: allegations. And barring a formal investigation—which, given current relations between Washington, Kiev, and Moscow may well be a non-starter—they should be taken with a grain of salt. However, the information squares with prior, offshore-related allegations involving Manafort. They were also brought forward by a respected anti-corruption advocate named Serhiy Leshchenko.

The allegations shed that much more light on the murky

Read the full article


Pass-Through Tax Break for the Wealthiest

Center for Budget and Policy Priorities, February 27, 2017

A centerpiece of President Trump’s campaign tax proposal and House Speaker Paul Ryan’s “Better Way” tax plan is a special, much lower top rate for “pass-through” business income — which is currently taxed at owners’ individual income tax rates rather than the corporate rate and then as a dividend income in the hands of shareholders. About half of pass-through income flows to the top 1 percent of households, while only about 27 percent goes to the bottom 90 percent of households.

Both Trump’s and Ryan’s plans would cut the top rate on this income sharply from its current 39.6 percent rate to 15 percent and 25 percent, respectively — well below the 33 percent top individual income tax rate both plans propose. This would overwhelmingly benefit high-income people and create a costly loophole. Trump’s proposed pass-through rate cut would cost $1.5 trillion over ten years, accounting for about one-fourth of his campaign tax plan’s total cost.

Read the full analysis