Just want to point out that this was all possible because of the hard work of people at the icij. They do amazing work (same group that did the Panama papers and one of the last real independent investigative news organizations in the US) and deserve your support!
As an aside, I would also ask this question: why not democratize this and make billions using the same loopholes so that everyone gains access or they are forced to fix it? Surely it’s a good startup opportunity.
The way I understand these schemes is that they require minimum balance way above what an average person has to be effective, but not sure. Would love a professional tax engineer/CPA opinion.
There was a documentary on Dutch TV a couple of years ago, about 'DYI tax haven management' for common people. Can't remember which public channel it was on, and what the name was. Might have been part of "Tegenlicht" series.
Update: Maybe it was the program Rambam where the makers set up their own tax haven based on the methods of the big corporations. Information in Dutch:
it's weird when Americans day dream of giving tax breaks to billionaires because they might be rich one day; it's a another thing for people who ostensibly have the best social system in the world looking at America and say "we should do that".
There are plans for making mortgages more expensive by removing tax deductions and for taxing inheritance a whopping 75%. That is hardly giving tax breaks to billionaire, more so screwing over anyone who isn't dirt poor. Oh, and I'm already paying pretty much half my income in various taxes.
Anyone who has a significant amount of money can avoid these taxes, as always.
This is almost universally a sign that whoever is posting it is acting in bad faith. It sure is a good thing all these laws are documented and easily accessed with a single search.
Netherlands has a progressive tax model for inheritance taxes, that change the tax outcome based on your relation to the deceased. Let's check the two most common cases with a quite wealthy sum of money (€1.000.000) on their calculator: https://www.belastingdienst.nl/wps/wcm/connect/nl/erfbelasti...
- My spouse died: €23.000. So a huge tax burden of 2.3%.
- My parent died: €179.000. 18%. So not even remotely close to 75%.
Of course, these numbers are in your favor since the median inheritance in the Netherlands is under €100.000. For children of the deceased, it's down at around €40.000.
And for that, you pay an outstanding 4%.
If you're talking US, it's even more hogwash because we have a, what, $14,000,000 inheritance tax exclusion?
So... Would you like to amend your statement? It seems an awful lot like you're not telling the whole truth.
The problem with inheritance tax is that the person pays taxes all through their lifetime and then when their significant others inherit that wealth (which already has been taxed once at least) it gets taxed again. The issue isn't the amount, the issue is the principle of it.
I suspect BTW the very rich won't ever pay these taxes as there are always ways to restructure the wealth or simply move it elsewhere. I know this is done in the UK. So what it does is punish the middle classes the most.
> The problem with inheritance tax is that the person pays taxes all through their lifetime and then when their significant others inherit that wealth (which already has been taxed once at least) it gets taxed again.
Yes, because that's a transfer to different people. That's not a problem.
The problem is that it's not just treated as income to the recipients—which it manifestly is—with the income tax then being modified to include both advance recognition and windfall spreading options to allow taxpayers to deal with irregular income in a fair basis with more regular income.
This is also the problem with capital gains tax. And its not th people who have the kind of income that avoids regular income taxation that are getting screwed by that.
> Yes, because that's a transfer to different people. That's not a problem
Sorry I don't agree. The tax has already been paid when the person was alive. There shouldn't be a an additional tax on top because it is given to others after they died. Which is what is happening.
> The problem is that it's not just treated as income to the recipients—which it manifestly is—with the income tax then being modified to include both advance recognition and windfall spreading options to allow taxpayers to deal with irregular income in a fair basis with more regular income.
The problem wouldn't exist if the tax was abolished.
> This is also the problem with capital gains tax. And its not the people who have the kind of income that avoids regular income taxation that are getting screwed by that.
Again another case of a problem that wouldn't exist if the tax (capital gains) was abolished.
Tax is a means to an end (paying for civil services). Whether or not something is taxed twice is not inherently wrong, it's just a choice on how we choose to pursue our needs in a way that is effective and equitable.
I mean, reductively, saying something can't be taxed twice doesn't make any sense because all taxes work like that. A company sells products, those sales (and/or value add) are taxed. That money is paid as income, then that income is taxed. That income is spent on goods or services, where the sale (and/or value add) is taxed. Ad infinitum.
A reasonable tax on inheritance, growing with wealth, makes sense in a society that has no effective wealth caps. Otherwise the "haves" accumulate wealth, which accumulates wealth, which accumulates wealth. By imposing a tax on wealth that is not earned, but entirely dependent on the circumstances of one's birth, you create a redistribution scheme that's... Quite fair?
No living person has their labor stolen, some redistribution is achieved, but the heir still receives a significant benefit.
> Tax is a means to an end (paying for civil services). Whether or not something is taxed twice is not inherently wrong, it's just a choice on how we choose to pursue our needs in a way that is effective and equitable.
Well in the UK, the civil services are crap, the police don't do anything, the NHS waiting times are extensive (my mother is waiting for over 2 years for knee surgery), the roads are full of pot holes, and we have more admirals than warships.
So the money doesn't seem to be used effectively. I don't know what you mean by equitable.
> I mean, reductively, saying something can't be taxed twice doesn't make any sense because all taxes work like that. A company sells products, those sales (and/or value add) are taxed. That money is paid as income, then that income is taxed. That income is spent on goods or services, where the sale (and/or value add) is taxed. Ad infinitum.
It almost like the tax man takes at every opportunity. Describing that they tax you many times isn't a justification for more taxes.
> A reasonable tax on inheritance, growing with wealth, makes sense in a society that has no effective wealth caps. Otherwise the "haves" accumulate wealth, which accumulates wealth, which accumulates wealth.
I don't think it is moral or fair to tax beneficiaries of inheritance. It is essentially a gift from the deceased to the beneficiaries.
That the entire point of building up an inheritance for your family/beneficiaries, is that you hope to leave your children better place. I don't know what is fundamentally wrong with building up wealth generationally.
> By imposing a tax on wealth that is not earned, but entirely dependent on the circumstances of one's birth, you create a redistribution scheme that's... Quite fair?
No it isn't fair. The wealth was earned at some point in time, presumably legally. I don't understand why it matters that the person receiving it may have done nothing more than been a family member, family friend or even someone/some organisation that the deceased thought was deserving? When they were alive it was their choice who would receive upon death.
No. Anyone can register a LLC in any of these places. They have minimal filing requirements going forward too.
You may be required to have a local agent, and they will add their address and names as the nominee shareholders so you remain anonymous. Then with an LLC, the company can open bank accounts and you can move money. Any money made offshore is non-taxed locally.
There are 2 major reasons why people choose to use layers of corporations in other countries: tax minimization (in their domestic country) and obscurity of the assets-owners relationship.
The latter is used by corrupt politicians, oligarchs (extremely wealthy people who have massive influence on policy/politics), and to stifle investigations by civil investigations (divorce), to stifle criminal investigations (political corruption, sanctions avoidance, fences for thieves, a convenient vehicle for transactions or large assets so governments/ oversight can’t easily track them).
There is a minimum overhead required (you need at least a part time CPA and attorney to give you the strategy, more if they actually implement it), but I don’t think it requires you be ultra wealthy. The problem is that most law-abiding, non-sociopath people don’t benefit much from avoiding the law.
Isn't the icij "just" a network of people already doing investigative journalism who work on this stuff anyway? As in it's just a place where investigative journalists can meet/discuss investigations that cross borders? My impression were that they were just normal journalists and that groups then formed and disbanded based on interest within this network.
I certainly love their work, and I think a network like that is very important (we should probably have something similar for software developers/IT people across Europe), calling them a group seems wrong with my understanding though.
It's not one or the other, it's both. They both do original reporting on their own and act as a loose network of smaller investigative journalism organizations. It truly depends on the task at hand, but it's usually very useful to get some of the local investigative journalists involved, as they're the ones that both understand the language and are able to put the leaked data into context. Usually ICIJ is the one that publishes the English version of the story and their local partner(s) publish the same thing in the local language.
Actually, I'd say there's three such networks: ICIJ, GIJN and OCCRP. They're not really competitors, each serving slightly different purposes, and there's plenty of collaboration and overlap between their members.
Source: I'm not in that world anymore, but I knew about Panama Papers long before it was public and have my name in the credits in some of the collaborations with ICIJ.
True, but they also tend to be papers that can't consistently rely on advertising, precisely because of their investigations (publishing the deeds of corporate billionaires is a great way to not get ads placed for whatever the billionaire sells.)
So, at least subscribe to one of the papers !
(I know, sorry HN, I asked people to pay for a service that could be financed by ads to gather more data - aka more food for the algo. Sorry.)
I'm thinking something much more boring than that. Basically I think we could have a conference where a participant could share some problem they are having that they believe generalizes across other participants (maybe some regulatory reporting requirement, or maybe some question about implementing AI in sharepoint or whatever) and the other participants could then sign up for further discussion and participation in creating some software systems that would solve the problem.
I'm thinking something akin to FRONTEX JAD's or that conference the EU has where lawyers show up to discuss cases they need EU assistance with.
Concretely, my company recently did a migration into Azure, if we were at a meeting like that and somebody said they were planning to do the same, we would have a bunch of experience to share with them.
I imagine that could maybe help foster some shared European understanding about what our big tech problems are. Maybe we could even let the solutions end up as open source or something.
To be honest, making a business out of this might be the best way to convince regulators to close the loopholes. You could even devote N% of the revenue to closing the loopholes. There’s DEFINITELY a large moral hazard though, it would be very easy to lose your soul, or to be kicked out by the board in favor of a more malleable leader :/
Edit: after reading the article, I realize most of the “loopholes” to be changes are in disparate countries, not the _source_ country. This makes the whole idea less attractive. I suppose you could potentially still get rid of the anonymous-representative option by which people conceal their connection to different assets.
Technically, if the VC and the startup is located in the blacklisted country i don't see why not. Basically we will start the torrent site like DNS witch hunt, but still possible. I assume the "elites" would not be too happy and do everything in their power to stop it?
The authors write that it's "counterintuitive " that in states with low crime and efficient beaurocracies, the uberrich tend to conceal or relocate their wealth more. See:
"This suggests a counterintuitive result: use of offshore finance is driven not only by negative political conditions such as corruption and lack of civil justice, but by positive conditions, such as regulatory enforcement and civil justice."
But it's not counterintuitive at all. Those people aren't concerned about getting mugged and they're definitely not concerned about how long it takes to get a construction permit in a corrupt country. They're concerned about state-sponsored expropriation.
Given so many of the comments here about tracking the offshore accounts down and confiscating the contents, it's no surprise.
Irrespective of whether their practices are immoral, unethical, unfair, or unjust, they're definitely not counterintuitive.
It's genuinely hard for me to understand how the authors could believe otherwise.
I'm intrigued as to the framing of your post. You seem to be positing that it's entirely expected and understandable that wealthy individuals in well functioning systems should commit fraud to the detriment of the system that brought them their wealth. That seems counterintuitive to me, at least.
If we're talking about wealth not income, then no, not really. We don't usually think of asset seizure as "taxes". In other words, one "taxes" flows (like capital gains and wages) and "siezes" stocks (like bank deposits and equity).
"You seem to be positing that it's entirely expected and understandable"
I wasn't making value judgement, but yes, if you look at it with the assumption these wealthy individuals are cold, calculating, self-interested actors, then it's "expected and understandable" to me.
"That seems counterintuitive to me, at least."
I think you're using "intuitive" as a shorthand for "the way things ought to work in a righteous world", where I find incentives and disincentives to be a more intuitive way of understanding the world.
"wealthy individuals in well functioning systems should commit fraud to the detriment of the system that brought them their wealth"
To be fair, it's not necessarily fraudulent to have offshore accounts or to conceal your identity (it can certainly be depending on the circumstances). Technically I have an "offshore" account, I just happen to be living outside the US and a US citizen. I also use mechanisms to conceal my identity when registering domain names, for example. Is it the same thing, no, but these people might not technically be doing anything illegal.
It isn't necessarily true that those systems "brought them their wealth" either. Plenty of them likely inherited wealth that was accumulated long before the current systems were put in place (granted, it could very well have been accumulated illegitimately 300 years ago).
(Again, I'm not saying any of this is how the world should work, I'm trying to look at the world dispassionately and describe how things seem to be)
At the level of wealth we're discussing, these individuals probably have to think about "diversifying" among nation-states. Instead of worrying about whether to short the tech sector, they're worried about a country being invaded and the new puppet regime deciding to nationalize the hydroelectric dam they financed. Or they may be worrying about whether their country of residence will pass a law that the biggest national telcom must sell the government a majority stake (i.e., their share) at a government-mandated price denominated in an inflating currency... with expert bureaucratic efficiency.
Nope. Legacy protection. Protection from state seizure and civil forfeiture. Protection from nationalization. Protection from a spouse or even your own children. Protection from takeovers of family businesses and assets.
There are a number of reasons why we might use offshore companies and apparent tax havens - while the taxes are an added sweetener, the main reason is that there is often concrete rule of law in these jurisdictions.
Did you know that for Russians and Chinese, the US is a tax haven? As long as you're not a US resident, you only pay US taxes (which can be easily optimized to be far below Russian or Chinese taxes). You enjoy a high degree of anonymity. You also get to gamble in the biggest equity markets of the world, which are backed by a strong financial system eager to lend you gambling money based on your assets.
Compare that to Russia, India or China, where your assets can be seized at a moment's notice, on the whims of some pencil pusher bureaucrat or judge.
Ok now find their hidden assets and take them. Criminals shouldn’t be allowed to get away with crime right? These are some of the worst, IMO, as they rose on our backs and then turned around and stole the fair share they owed to society via tax cheating.
Asset security is exactly one of the reasons people seek foreign shelters. If you've got a ton of value to control, you want it to be secure, and sometimes your own government is the primary threat.
This is especially true if your wealth comes from capital markets.
If I buy a bunch of baseball cards at 1c each and later it turns out that the market values them at $100 each, I never actually "took" money from anyone. Yes it's patently unfair that I got that lucky, but it wasn't necessarily at anyone's expense.
Now, when I actually go to sell those cards then I do actually "take" money from someone else, but while those gains are unrealized it's just paper wealth.
In such a case it's also not clear who I am "taking" from. The person buying them off of me gave me the money, but you could also say the baseball card company was exploited and lost out on pricing their cards at $100?
Money has no inherent value; it is just a currency, an indirection, a promise. The economy must always bottom out at a physical good or service. You can keep trading promises of goods and services in various forms, but ultimately you end up with the inescapable tyranny of physical existence that is a closed system, with the one exception that we get energy from the Sun and stored forms of energy on this planet.
No wealth was created by "discovering value" or finding someone with money to buy something that was already there before. If this new person decided to spend $100 on a baseball card, then they didn't spend money on something else, so the market for those other things is naturally going to price them lower. So the $100 came from somewhere[1].
All of these open system chains of thought that assume any "non-zero sum game" either improperly account for devaluation of other goods or they assume accumulation of labor, and typically add a side helping of assumed exponential growth.
[1] Which is not say that money cannot be created from nothing. In fact, it is all the time. Debt--loans, stocks, bonds, IOUs--is money creation.
it's not unfair since you took the risk of potentially losing your original investment; you also put in the time to learn about baseball cards, while other people were interested in antiques and studied and bought those, also with a risk that what they bought would decrease in value.
> you could also say the baseball card company was exploited and lost out on pricing their cards at $100?
The baseball card company is in the business of selling lottery tickets. If there wasn't a secondary market for the ones that get really valuable, they'd sell a lot fewer new cards to people looking for a winning lottery ticket.
It's a weird business for them because they're selling lottery tickets, but don't necessarily know which ones will be winners. Although with all the statistics and moneyball stuff, they'd sell a probably have a better idea now than in the past.
companies aren't baseball cards, their growth is tied directly to work that the humans in the company do, and they sure are paid for it, but if they were paid a fair share of the company's profits then that increase in share price would evaporate, because the workers would be getting the rewards from the productivity.
In other words, you owe taxes on the capital gains because someone is working to make those gains for you.
> their growth is tied directly to work that the humans in the company do
They're linked but it's not 1:1. The whole point of a corporation and a value-add economy is to do a force multiplier on the cost of labor. It doesn't matter how hard you work when digging with a shovel, a lazy guy with an excavator will create value faster than you can.
The guy providing the excavator is currently keeping the lion's share of the productivity gains, and that's not good. But it's also not quite the same as saying all of the wealth comes from exploitation.
The value of the stock is the value of the corporation, right? What’s the value of it if you don’t have humans to man the factory? The only reason Capital has capital is because they’re hoarding it since the beginning of human economics. If everyone shared equally then the guy with a steam shovel becomes a team who built, bought, or traded to get a steam shovel that they share to make their collective load easier.
So in my world view, yes, all wealth is exploitative. No one person can do enough work to earn millions and billions more than others.
Value can be created from nothing, I am sure you can give an example or two, but in general nothing large and valuable is created without the effort of a lot of people together, relying on the societal systems that are funded by taxes.
I suggest that you could count on one hand the number of people in the entire history of humanity who could and would hide this kind of wealth who didn't earn it through somehow relying on others and/or society's structure.
The planet's ressources are finite though. When you print money, you don't create value, since there's still the same amount of matter being traded around, you just reduce the value of everybody's money.
And so you rob everybody.
You are conflating money and value. Value is infinite, e.g. compare the world today to 200 years ago. Even relatively poor people live better today than kings did then. Creating value is not the same as printing money.
What natural resource are we running short of? Land might be at the top of the list, but we are only utilizing 70% of that. And if we get low on that, we just switch to aqua-farming or floating cities.
No one is hoarding all the natural resources.
No argument that printing money devalues everyone else (this is the definition of inflation). End the Fed.
in fact value is created in every transaction: someone sells something for more money than it's worth to them and someone buys the thing for less money than the thing is worth to them (otherwise the transaction would not occur)
Lots of transactions actually destroy value, they just do so in a way that externalizes this cost.
A good example is advertising: companies are incentivized to dump all available resources into marketing, because those who don't get out-competed by those who do. It is a winner-takes-all game where the strategy that maximizes global value is nowhere close to being a Nash equilibrium.
A more extreme example would be hiring someone to go rob a bank. No value is created (lots is destroyed) but both parties to the transaction come out ahead.
no, how is that relevant? someone has something to sell for $1 that you value more than the $1 in your pocket so you buy it; doesn't matter if someone a block away is selling it for $0.50
Some geniuses think that value can be created out of thin air. Like if an artist paints a painting.
No. This is false. The artist needs food to survive... he needs money to buy food. Who paid him money for the art? Another artist? So you can have a whole economy of artists producing nothing but art (aka value) out of thin air and they don't need to eat or buy food? You think that's actual value? That's a non functional economy. Someone needs to produce food in this economy. Someone needs to produce the energy to make the paint to create the art.
When you follow the chain all "value" is connected to something concrete. Energy, food, etc. And ALL of these things are finite.
When you think of value it can be thought of as entropy. Any action that lowers entropy requires an energy input.
That being said. Value is never created. It is always taken. There are two root sources. The earth and the sun. All value is sourced from mining energy from the earth or mining energy from the sun. (Technically it all comes from the sun as energy in the earth <oil> comes from the sun).
The issue with both of those sources is that the rate at which energy can be taken as an upper limit. The sun can only produce so much energy and we can only extract it at a specific rate. The earth is the same, although the earth has a much more smaller reservoir that can be used up in a foreseeable future.
Just had to rant here. Because the idea that value can be created out of thin air is just completely and utterly false. You can overpay for something, but in the end when you follow the chain... the creation of value is taken from limited reservoirs of low entropy. Intuitively we are using something up, and the scientific reality ALSO reflects this fact. Trust your intuition, don't come up with convoluted ways around this because it's FALSE.
PS: actually I was wrong about the earth. coal, geothermal and nuclear energy are exclusively from the earth and not the sun but these also have an upper limit and a limited rate of extraction.
The energy cost needed to transform the dirt and rock and the energy cost needed to create the body of knowledge and skillset required to get to that point DID not come out of thin air.
I said it once and I’ll say it again. Follow the chain of resource creation. There’s a huge energy cost.
There is no particular correlation between value creation and energy consumption. Your theory is likely unique. I could burn a log, releasing a lot of energy, and no value would be created. I could carve a figure into a log and create value.
Your examples disagree with your initial statement actually. How did you get the log? How did you carve the figure? Both of these require energy consumption, as we aren't at the stage where we are magically planting trees and teleporting them into our workspaces for carving/burning.
Take away all energy from this world. You get 0 value creation. Everything is dead nothing can move.
That’s the correlation. I don’t understand why you’re using big words like correlation as if this is something that needs to be studied. It’s common sense imo.
Yes, the sun bombards us with free energy that all energy on the earth is sourced from, so dont worry about accounting, since we clearly dont have the same amount of wealth as 5000 years ago
That energy accumulates as low entropy. The earth is a continuous low entropy reservoir soaking up the energy and continuously generating more complexity via evolution and also via economic progress.
That’s how the accounting works out.
The reality is energy is neither created or destroyed. It just reaches a non workable state. In terms of balance of physical energy we technically receive the energy then the energy radiates off the earth. We don’t keep the energy.
What we do keep is the low entropy. The energy comes forth from the sun in a concentrated beam. We extract the low entropy from the beam into complexity. Over millions of years this complexity accumulates making earth a reservoir of increasing complexity and lowering entropy. The beam of energy from the sun gets all of the low entropy extracted and radiates into space in a non useable form.
What's interesting about the Cayman Islands is that they are the 4th largest holder of U.S. debt, with $441 billion[1].
So USD flows into Cayman banks, and those banks need to do something with the massive amounts of money just sitting there. So what do they do? They buy U.S. Treasuries. And half a trillion dollars is just their holdings in U.S. debt, imagine how much more money is hidden in those accounts and invested in other assets.
Also the fact the US Navy doesn’t just make decisions on its own to blockade another nation. It would do so under orders. The person giving that order more than likely would have accounts there themself. So that’s very unlikely to be an order ever actually given.
It would be a wonderful world if only people could force those running a less dumb economy to abide by their dumber rules. Wouldn't it be awesome if NK could park a navy somewhere and make sure everyone does things for the benefits of The People and not in whatever selfish way they do them now?
Well the people who control enforcement are the elite. Right? Trump is one of the elites. So you think they're going to enforce anything? You think it will be easy?
Is there a good primer on how this kind of offshoring works, for people ? I have notions of how tax evasion / optimization works (things like the irish-dutch sandwich, where you manage to pretend that Google does not make any money in France because it has to pay a very expensive license to Google Ireland , etc..)
But for offshoring, I'm clueless as to how manage to "reshore" the money, so to speak, so that you can eventually... Spend it to buy stuff. (Or isn't that the purpose of hiding the money ?)
That’s my understanding of how modern money laundering works. Can’t move your money out of a particular bank due to regulations? Use it as collateral to loan money to any other entity you wish. Fancy.
I talked to someone recently who claimed to know someone personally with 16,000 metric tons of gold. He claims that there is waaay more gold than is officially on the books. Hard to believe… but maybe not. He claims that there is unbelievable wealth out there—many more hundred-billionaires than official stats hold. Ok. Who knows?
What is more likely, that your friend knows all about thousands of tons of secrete gold mined without anyone knowing, or that with constant satellite pictures of the earth, people actually do know roughly how much gold has been mined?
And I know someone with a stash of 100000000 bitcoins. The yield of gold mines is known, and it's pretty easy to extrapolate into the past.
I understand where all these conspiracies come from. It typically starts with "there must be enough gold to back all the savings, because Bretton-Woods or something". Then they check the total cost of the world's gold. It's a small fraction of the total savings.
So obviously most of the gold is hidden somewhere.
$1.7 trillion or 2* the holdings at Fort Knox? All the Royal Houses of the Arab Gulf can't even have that much money liquid, even with 365 days' heads up. And, no: don't do a "trust me bro," here. At their peak, ARAMCO made $161b in profits in 1 year - and the bulk of that goes towards the general pop. in the form of subsidies, etc. Simply, $1.7 trillion doesn't exist anywhere in such liquid form.
If you claim there are hundreds of stealth billionaires with $1-$20b in cash & assets, I'll readily believe that: African kleptocrats' kids, Middle East royalty, European heirs with a low profile, Russian oligarchs, etc. But, not $100b. Or a trillion. That's an insane amount of money, larger than the GDP of like 80% of the world's countries.
>Is there a good primer on how this kind of offshoring works, for people ?
There isn't. People with deep knowledge of this don't invest their time writing blogs. Bit like OpenAI employees don't write blogs about how to train world class models. It's just not a thing.
There is an abundance of shrill articles by journalists writing about it that derive their knowledge from other articles written by journalists who in turn...
The big tech stuff flowing through Ireland is indeed lets call it convenient for both ireland and big tech, but what people don't realise is that chances are very high that their own pension likely flows through offshore structuring too. These places act as a central neutral clearing house of sorts that is acceptable to a lot of jurisdictions so even actors not after tax evasion use them.
At the multinational level you never have to actually reshore anything. The corporation buys things, or you take loans at incredibly low interest rates using corporate assets as collateral. Using made up numbers, imagine you take out a $1M loan, you get charged 1% interest, you put up $2M in corporate assets as collateral, and the corporation pays the bill directly.
The way money is re-shored is whenever a US President (so far only republican Presidents) decide to give companies a tax holiday. So far Bush and Trump gave such holidays. Which means that corporate treasuries only have to wait for the next Republican president to re-patriate their off-shore cash. During this time corporations usually use debt to service dividend payments, share repurchases, and operating expenses in the US.
> But for offshoring, I'm clueless as to how manage to "reshore" the money, so to speak, so that you can eventually... Spend it to buy stuff. (Or isn't that the purpose of hiding the money ?)
Why would you reshore the bulk of funds? We're talking about people for whom a couple of million is just spare money.
If you want to buy a company, you just use the offshore funds directly. If you want to buy a major luxury good (a yacht or a jet), you do the same and then just lease/rent it to yourself.
If you _absolutely_ need cash in the US, you can pay yourself dividends and take a hit paying taxes on this amount only.
This is so surprising to see research on. It’s also very brave. It’s the kind of investigation that could get a drone or a hitman sent after the investigator.
Daphne Anne Caruana Galizia (née Vella; 26 August 1964 – 16 October 2017) was a Maltese writer, journalist, blogger and anti-corruption activist, who reported on political events in Malta. She was known internationally for her investigation of the Panama Papers and subsequent assassination by a car bomb. Caruana Galizia focused on investigative journalism, reporting on government corruption, nepotism, patronage, and allegations of money laundering, links between Malta's online gambling industry and organized crime, Malta's citizenship-by-investment scheme, and payments from the government of Azerbaijan. Caruana Galizia's national and international reputation was built on her regular reporting of misconduct by Maltese politicians and politically exposed persons.
It's why the Panama papers etc was done by a consortium of journalists. Much safer as killing one journalist or two doesn't make any difference to the end publication.
Because the author's definition of Blacklisted jurisdictions is not clear in the article or the research paper without buying the footnoted book:
The current EU blacklist includes 11 jurisdictions: American Samoa, Anguilla, Fiji, Guam, Palau, Panama, the Russian Federation, Samoa, Trinidad & Tobago, US Virgin Islands, and Vanuatu. (Source: EU List of Non-Cooperative Nations for Tax Purposes - European Commission)
If anyone has a better definition or has read the underlying book, please let me know, but I found the research hard to follow without this being well defined as the OECD apparently no longer maintains a blacklist.
Also, I wondered why more famous countries are not on the list and it says that these large commissions often identify small weak islands, because large players like the US, Britain, Switzerland, Luxembourg, China have enough political power to not be placed on the list.
I have to say that as an American in 2025, this kind of news hits a little different than it used-to.
In prior years, I didn't have nagging anxieties about people's life savings being arbitrarily frozen/seized as a form of political retribution, or the imposition of China-style capital controls to ensure "patriotic investing."
Before anybody decries that as (still) far-fetched, consider that the federal government forced banks to drain millions from the accounts of states (NY), announced $365,000/yr "fines" on undocumented immigrants, and imposed arbitrary (illegal) import taxes while threatening companies against showing it on the bill.
I've just concluded that the ultra wealthy are in some aspect stateless people. Sure, they have a passport - or multiple - but they'll emigrate to another country without blinking, if it means slightly less taxes and less transparency. And that's on top of their offshore assets, managed by other people.
Using your assets/wealth as political power seems to have become more popular here in northern Europe. Taxes too high? Fuck you, I'll take my money and companies to Switzerland. If politicians buckle, they'll move back home. Seems like a race to the bottom, where the tax havens will just compete for the best terms to the ultra wealthy.
What I wonder is: Will they be missed? They're taking money away that the government won't have access to anyway, and by hoarding it, effectively reducing the money supply. If they live somewhere else, they might have less influence over our society.
The ultra-wealthy have been stateless for centuries.
For example, Britain’s famous “non-domiciled” tax exception was first created in 1799. It allows UK-resident foreigners not to pay tax on their foreign income except for funds they bring into the UK.
Wealthy families have been able to live their lives enjoying the stability of a Western democracy without paying taxes, keeping their assets scattered safely around the world and their citizenships wherever they can get the best deal.
The USA is also joining this game with Trump’s “gold card” that offers a path to citizenship for a $5M fee. But I don’t think the very rich will bite because US law and the IRS expect citizens to report their global income (at least for now, maybe Trump will eliminate this too with a stroke of a pen).
I'd like to see a move to eliminate the entire idea that a corporation can own a stake in another corporation. Make it individual owners only. Clear the haze.
It's kind of sad that whenever there's an article about the very rich using alternate, shadow financial systems to avoid paying taxes and (often illegally) hide their wealth, most of the comments are "Why can't I do that, too?" instead of "Why can't we find and punish the people doing that?"
It's not worth getting upset about. I am sure there are leftists who read HN, but the popular tone of the political commentary here tends to slant pro-capitalism, libertarian, anti-woke, meritocracy, dark enlightenment etc. It makes sense if you understand the website as a market research slash hype incubator for an American venture capital firm. Many of the people posting here are actively employed in the get rich quick startup scene and even those who aren't are still likely to be amongst the wealthiest segment of society due to their work. Almost certainly the vast majority are men. It is what it is.
The comments here are not representative of broader society, but they can sometimes be interesting to gain a sense of where an influential chunk of the global tech elite is at. I have heard HN political or social talking points echoed in the mouths of leadership at company all-hands, and non-HN reading friends at other tech companies have mentioned similar themes at theirs, so there is some value in having this window into the culture as an early warning system.
it’s sad that people want freedom? I think it’s way more sad to imagine a world where the state reigns supreme, it should always be possible to go solo if you can pull it off, it’s way more human, the state is just other people, often using bully tactics, they shouldn’t be able to rule over you, there should at always be places to escape to
If you are an activist of any kind, it's a good idea to be offshore. A UK Palestinian support group had their account frozen and access to the funds blocked just this week
"Singapore has consistently been rated as the least-corrupt country in Asia and amongst the top ten cleanest in the world by Transparency International. The World Bank's governance indicators have also rated Singapore highly on rule of law, control of corruption and government effectiveness. However, it is widely perceived that some aspects of the political process, civil liberties, and political, labour and human rights are lacking. The Economist Intelligence Unit rated Singapore a "flawed democracy" in 2024. Freedom House deemed Singapore "partly free" in 2025, at 48/100 — 19/40 for political rights, 29/60 for civil liberties."
No caning is not a punishment for protests and demonstrations; that would be ridiculous as they would lose even the perception of free speech as a fundamental liberty. But generally, such protests and demonstrations have a lot of restrictions in place: they need to take place in a specific location (Hong Lim Park), they need to be pre-arranged, they cannot be religiously sensitive, they cannot be about the political issues of a foreign country, and speeches against politicians are often met with libel lawsuits. The only large-scale protests that happened in recent memory are all about same-sex marriage and LGBT rights.
> Yet, elites who come from countries where their assets are likely to be seized due either to a lack of civil rights or a government with effective regulations tend to use a “concealment strategy” to remain anonymous.
Not to be a defender of criminal money laundering, but this is an important caveat. When all money is traceable, digital and controlled, good luck funding anything against the government in an authoritarian setting.
Unfortunately that's a catch-22
I'm well aware of the impact of corruption and organized crime and how it affects billions worldwide, I've read more than one book on the subject. but it's analogous to the issue with cryptography, privacy and protecting people, especially minors, on the internet for example
>Billionaires, oligarchs, and other members of the uber rich, known as “elites”
it's a small point but, "elites" usually refers to those with good educational credentials who hold down white collar jobs at universities, newsmedia, law and finance firms, political campaigns, non-profits, etc., jobs they got because their parents know how to help them network and who can afford to pay their rent in major cities while they "pay their dues" as interns in these same organizations. Yes, they do have higher than average incomes, but I heard a great word for them (from a left-leaning source fwiw) who called them "the 19%". They are not the 1%, but they make up the rest of the 20% and they work for the 1%, and though they often have left leaning political ideals, it's human nature to want to defend what you have and feel you earned it, and also to pass it along and take care of your own children's futures. According to this guy, they control 2x the wealth that the 1% controls and flex a lot of political muscle.
Billionaires, oligarchs, and other members of the uber rich are generally referred to as just those things. The people behind this study I would guess are in the 19%, and by labelling the billionaires and oligarchs as elites, unconsciously they shed the shame of being elites themselves (Dartmouth? pure ivy league).
All I'm mad about is I don't have access to the same sorts of instruments. I pay an _excessive_ amount of taxes that return at like a 0.0001% for society. I could make 12% on them and give 5% directly at a much better rate.
Charity is not a replacement for a functioning government. Assuming you're in the US, it's hard to argue that you're not paying far less than you should be, given how quickly we're running up the deficit.
I'm of the opinion that we should have a constitutional amendment which limits debt to gdp to 80%. If the CBO indicates we will breach that, congress has 8 years to get it back under control before the CBO has the authority to ban officials from public office if it's determined they voted in favor of the legislation responsible for the breach. No doubt there are problems around that. Someone smarter than me can fill in the holes.
There’s a big problem with that. The “deficit” is just the liquid financial savings of the private sector.
The correct approach is to require all those people worried about the “Debt” to hand over any liquid savings they have in bank accounts or retirement funds. Since that is what is causing it by accounting identity.
After all if they consider it to be such a problem they should put their money where their mouth is.
Read The Deficit Myth by Stephanie Kelton to understand how the system actually works.
Amusingly a larger deficit means government has more space to spend, not less. People saving means they are not spending which means resources are left underemployed.
Debt to GDP is not a relevant concern in a free floating currency has Japan has demonstrated for decades.
There is no risk free investment that will return you 12%. In a year where you are down 30% are you still contributing 5% on initial capital?
If not, you are just constructing an instrument where you only pass through downside risk
For all practical purposes you can - and the world broadly does - consider e.g. TBills to be risk free (or take your favourite interbank lending rate etc etc).
The US government has confiscated value from T Bills before.
The government used to sell two bond types - dollar bonds that paid off in dollars, and gold bonds that paid off in gold. The gold bonds were safer and hence paid a lower interest rate.
Enter FDR. FDR decided to pay off the gold bond holders in dollars, not gold, and since the value of gold vs dollars had diverged substantially, FDR confiscated the difference.
That was the end of the phrase "sound as a dollar". Gee, I wonder why nobody says that anymore!
The largest risk of TBills is that inflation will shrink their value, and with catastrophic deficits that is a very, very real risk. That's why I don't invest in bonds or any investment that is denoted in dollars.
>>That's why I don't invest in bonds or any investment that is denoted in dollars.
Most investments seem to eventually (?) denominate into USD equivalents, especially if you live in the US. Do you mean hard(er) assets like real estate or commodities (which also leaves me puzzled because they’re still typically denoted in an underlying fiat currency and especially USD if they’re domestic assets).
This is heterodox opinion to modern financial theory. You’re welcome to hold it, I’m not interested in trying to convince you otherwise — I think it undermines the larger point I’m trying to make in an unhelpful way.
That sucks, sounds like you might have to try to improve the system that you live in. It’s a shame that most people that live in a society have to concern themselves with making things better instead of gambling and promising some of the proceeds to their pet causes
If you're making that 12% exploitatively (which most ludicrously-high-interest "investments" are), that's a net harm for society. (A smaller-scale example, to aid with intuition: there once was a lung cancer charity which funded the promotion of cigarettes, to increase the dividends of cigarette stocks, so they had more resources with which to help lung cancer victims.)
Money isn't real: it's an abstraction. What it's an abstraction for, on the other hand, is very real. Don't confuse the map and the territory.
Higher returns always come with higher risk. This is not exploitation, nor do high risk investments harm society.
Musk, for example, invested hundreds of millions into Tesla, his entire fortune. Soon afterwards, he was within hours of personal and business bankruptcy.
SpaceX also was one explosion away from total bankruptcy.
Say what you will about Musk, the man has a lot of guts. Without those guts, there'd be no Tesla and no SpaceX and no Starlink.
How is 'exploitatively' defined? I have seen it used as 'literally anything that makes a profit is exploitation by definition' crap used unironically often enough that 'exploitation' itself has become a major red flag (no pun intended). Those users of such definitions just love those sorts of tautologies disguised as logic as it makes for a nice and orderly world view to be able to make baseless and frankly, batshit insane assumptions. Like 12% returns being only possible through net harm to society. It is perfectly normal for a successful small business to have a ROI of 25% to 40%.
Right: a successful small business where people are doing actual work can have a potentially-unbounded ROI. "Money makes money" schemes, on the other hand… the situations where access to money is genuinely worth 12% returns to someone are slim. (If it's a high-risk venture, then that's not 12% returns in expectation: "loan that we'll write off if your venture fails" is providing actual value, under certain circumstances.)
Scams, cons, grifts, and destructive exploitation of common resources, on the other hand? Those can get massive numbers of monies out for every single number of money in. So that's where my mind goes, when someone talks about "make 12% on [a pile of cash]".
Just want to point out that this was all possible because of the hard work of people at the icij. They do amazing work (same group that did the Panama papers and one of the last real independent investigative news organizations in the US) and deserve your support!
More info here: https://www.icij.org/
As an aside, I would also ask this question: why not democratize this and make billions using the same loopholes so that everyone gains access or they are forced to fix it? Surely it’s a good startup opportunity.
There’s a fun documentary that explores this concept:
The Town That Took On The Tax Man https://youtu.be/ipV_GU7YaQg
It’s about a Welsh town that set out to do just this. Recommended watch.
The way I understand these schemes is that they require minimum balance way above what an average person has to be effective, but not sure. Would love a professional tax engineer/CPA opinion.
There was a documentary on Dutch TV a couple of years ago, about 'DYI tax haven management' for common people. Can't remember which public channel it was on, and what the name was. Might have been part of "Tegenlicht" series.
Update: Maybe it was the program Rambam where the makers set up their own tax haven based on the methods of the big corporations. Information in Dutch:
https://pers.bnnvara.nl/rambam-ontduikt-belasting-met-medewe...
> Might have been part of "Tegenlicht" series.
Consistently the best thing on TV.-
Meanwhile the Netherlands is taxing the common people like crazy, and politicians are talking about raising taxes even more.
The Netherlands also has the number two quality of life in the world so maybe don’t worry about it so much?
https://www.numbeo.com/quality-of-life/rankings_by_country.j...
it's weird when Americans day dream of giving tax breaks to billionaires because they might be rich one day; it's a another thing for people who ostensibly have the best social system in the world looking at America and say "we should do that".
There are plans for making mortgages more expensive by removing tax deductions and for taxing inheritance a whopping 75%. That is hardly giving tax breaks to billionaire, more so screwing over anyone who isn't dirt poor. Oh, and I'm already paying pretty much half my income in various taxes.
Anyone who has a significant amount of money can avoid these taxes, as always.
> taxing inheritance a whopping 75%
This is almost universally a sign that whoever is posting it is acting in bad faith. It sure is a good thing all these laws are documented and easily accessed with a single search.
Netherlands has a progressive tax model for inheritance taxes, that change the tax outcome based on your relation to the deceased. Let's check the two most common cases with a quite wealthy sum of money (€1.000.000) on their calculator: https://www.belastingdienst.nl/wps/wcm/connect/nl/erfbelasti...
- My spouse died: €23.000. So a huge tax burden of 2.3%.
- My parent died: €179.000. 18%. So not even remotely close to 75%.
Of course, these numbers are in your favor since the median inheritance in the Netherlands is under €100.000. For children of the deceased, it's down at around €40.000.
And for that, you pay an outstanding 4%.
If you're talking US, it's even more hogwash because we have a, what, $14,000,000 inheritance tax exclusion?
So... Would you like to amend your statement? It seems an awful lot like you're not telling the whole truth.
The problem with inheritance tax is that the person pays taxes all through their lifetime and then when their significant others inherit that wealth (which already has been taxed once at least) it gets taxed again. The issue isn't the amount, the issue is the principle of it.
I suspect BTW the very rich won't ever pay these taxes as there are always ways to restructure the wealth or simply move it elsewhere. I know this is done in the UK. So what it does is punish the middle classes the most.
> The problem with inheritance tax is that the person pays taxes all through their lifetime and then when their significant others inherit that wealth (which already has been taxed once at least) it gets taxed again.
Yes, because that's a transfer to different people. That's not a problem.
The problem is that it's not just treated as income to the recipients—which it manifestly is—with the income tax then being modified to include both advance recognition and windfall spreading options to allow taxpayers to deal with irregular income in a fair basis with more regular income.
This is also the problem with capital gains tax. And its not th people who have the kind of income that avoids regular income taxation that are getting screwed by that.
> Yes, because that's a transfer to different people. That's not a problem
Sorry I don't agree. The tax has already been paid when the person was alive. There shouldn't be a an additional tax on top because it is given to others after they died. Which is what is happening.
> The problem is that it's not just treated as income to the recipients—which it manifestly is—with the income tax then being modified to include both advance recognition and windfall spreading options to allow taxpayers to deal with irregular income in a fair basis with more regular income.
The problem wouldn't exist if the tax was abolished.
> This is also the problem with capital gains tax. And its not the people who have the kind of income that avoids regular income taxation that are getting screwed by that.
Again another case of a problem that wouldn't exist if the tax (capital gains) was abolished.
Tax is a means to an end (paying for civil services). Whether or not something is taxed twice is not inherently wrong, it's just a choice on how we choose to pursue our needs in a way that is effective and equitable.
I mean, reductively, saying something can't be taxed twice doesn't make any sense because all taxes work like that. A company sells products, those sales (and/or value add) are taxed. That money is paid as income, then that income is taxed. That income is spent on goods or services, where the sale (and/or value add) is taxed. Ad infinitum.
A reasonable tax on inheritance, growing with wealth, makes sense in a society that has no effective wealth caps. Otherwise the "haves" accumulate wealth, which accumulates wealth, which accumulates wealth. By imposing a tax on wealth that is not earned, but entirely dependent on the circumstances of one's birth, you create a redistribution scheme that's... Quite fair?
No living person has their labor stolen, some redistribution is achieved, but the heir still receives a significant benefit.
> Tax is a means to an end (paying for civil services). Whether or not something is taxed twice is not inherently wrong, it's just a choice on how we choose to pursue our needs in a way that is effective and equitable.
Well in the UK, the civil services are crap, the police don't do anything, the NHS waiting times are extensive (my mother is waiting for over 2 years for knee surgery), the roads are full of pot holes, and we have more admirals than warships.
So the money doesn't seem to be used effectively. I don't know what you mean by equitable.
> I mean, reductively, saying something can't be taxed twice doesn't make any sense because all taxes work like that. A company sells products, those sales (and/or value add) are taxed. That money is paid as income, then that income is taxed. That income is spent on goods or services, where the sale (and/or value add) is taxed. Ad infinitum.
It almost like the tax man takes at every opportunity. Describing that they tax you many times isn't a justification for more taxes.
> A reasonable tax on inheritance, growing with wealth, makes sense in a society that has no effective wealth caps. Otherwise the "haves" accumulate wealth, which accumulates wealth, which accumulates wealth.
I don't think it is moral or fair to tax beneficiaries of inheritance. It is essentially a gift from the deceased to the beneficiaries.
That the entire point of building up an inheritance for your family/beneficiaries, is that you hope to leave your children better place. I don't know what is fundamentally wrong with building up wealth generationally.
> By imposing a tax on wealth that is not earned, but entirely dependent on the circumstances of one's birth, you create a redistribution scheme that's... Quite fair?
No it isn't fair. The wealth was earned at some point in time, presumably legally. I don't understand why it matters that the person receiving it may have done nothing more than been a family member, family friend or even someone/some organisation that the deceased thought was deserving? When they were alive it was their choice who would receive upon death.
No. Anyone can register a LLC in any of these places. They have minimal filing requirements going forward too.
You may be required to have a local agent, and they will add their address and names as the nominee shareholders so you remain anonymous. Then with an LLC, the company can open bank accounts and you can move money. Any money made offshore is non-taxed locally.
No different to Delaware.
There are 2 major reasons why people choose to use layers of corporations in other countries: tax minimization (in their domestic country) and obscurity of the assets-owners relationship.
The latter is used by corrupt politicians, oligarchs (extremely wealthy people who have massive influence on policy/politics), and to stifle investigations by civil investigations (divorce), to stifle criminal investigations (political corruption, sanctions avoidance, fences for thieves, a convenient vehicle for transactions or large assets so governments/ oversight can’t easily track them).
There is a minimum overhead required (you need at least a part time CPA and attorney to give you the strategy, more if they actually implement it), but I don’t think it requires you be ultra wealthy. The problem is that most law-abiding, non-sociopath people don’t benefit much from avoiding the law.
I guess ‘democratize’ means something different to you than me. Most Americans don’t have any substantial savings whatsoever.
> Most Americans don’t have any substantial savings whatsoever.
The median household net worth is ~200k.
How much of that is their house?
> same group that did the Panama papers
Isn't the icij "just" a network of people already doing investigative journalism who work on this stuff anyway? As in it's just a place where investigative journalists can meet/discuss investigations that cross borders? My impression were that they were just normal journalists and that groups then formed and disbanded based on interest within this network.
I certainly love their work, and I think a network like that is very important (we should probably have something similar for software developers/IT people across Europe), calling them a group seems wrong with my understanding though.
It's not one or the other, it's both. They both do original reporting on their own and act as a loose network of smaller investigative journalism organizations. It truly depends on the task at hand, but it's usually very useful to get some of the local investigative journalists involved, as they're the ones that both understand the language and are able to put the leaked data into context. Usually ICIJ is the one that publishes the English version of the story and their local partner(s) publish the same thing in the local language.
Actually, I'd say there's three such networks: ICIJ, GIJN and OCCRP. They're not really competitors, each serving slightly different purposes, and there's plenty of collaboration and overlap between their members.
Source: I'm not in that world anymore, but I knew about Panama Papers long before it was public and have my name in the credits in some of the collaborations with ICIJ.
True, but they also tend to be papers that can't consistently rely on advertising, precisely because of their investigations (publishing the deeds of corporate billionaires is a great way to not get ads placed for whatever the billionaire sells.)
So, at least subscribe to one of the papers !
(I know, sorry HN, I asked people to pay for a service that could be financed by ads to gather more data - aka more food for the algo. Sorry.)
> we should probably have something similar for software developers/IT people across Europe
what do you mean by that? support by doing data journalism? more like hacktivism?
I'm thinking something much more boring than that. Basically I think we could have a conference where a participant could share some problem they are having that they believe generalizes across other participants (maybe some regulatory reporting requirement, or maybe some question about implementing AI in sharepoint or whatever) and the other participants could then sign up for further discussion and participation in creating some software systems that would solve the problem.
I'm thinking something akin to FRONTEX JAD's or that conference the EU has where lawyers show up to discuss cases they need EU assistance with.
Concretely, my company recently did a migration into Azure, if we were at a meeting like that and somebody said they were planning to do the same, we would have a bunch of experience to share with them.
I imagine that could maybe help foster some shared European understanding about what our big tech problems are. Maybe we could even let the solutions end up as open source or something.
> Surely it’s a good startup opportunity.
I don't think there are many VCs willing to invest into this.
To be honest, making a business out of this might be the best way to convince regulators to close the loopholes. You could even devote N% of the revenue to closing the loopholes. There’s DEFINITELY a large moral hazard though, it would be very easy to lose your soul, or to be kicked out by the board in favor of a more malleable leader :/
Edit: after reading the article, I realize most of the “loopholes” to be changes are in disparate countries, not the _source_ country. This makes the whole idea less attractive. I suppose you could potentially still get rid of the anonymous-representative option by which people conceal their connection to different assets.
Technically, if the VC and the startup is located in the blacklisted country i don't see why not. Basically we will start the torrent site like DNS witch hunt, but still possible. I assume the "elites" would not be too happy and do everything in their power to stop it?
[dead]
dont forget the hard work of congress nicely putting threading loopholes, and the supreme court!
The authors write that it's "counterintuitive " that in states with low crime and efficient beaurocracies, the uberrich tend to conceal or relocate their wealth more. See:
But it's not counterintuitive at all. Those people aren't concerned about getting mugged and they're definitely not concerned about how long it takes to get a construction permit in a corrupt country. They're concerned about state-sponsored expropriation.Given so many of the comments here about tracking the offshore accounts down and confiscating the contents, it's no surprise.
Irrespective of whether their practices are immoral, unethical, unfair, or unjust, they're definitely not counterintuitive.
It's genuinely hard for me to understand how the authors could believe otherwise.
"State-sponsored expropriation"
So... Taxes?
I'm intrigued as to the framing of your post. You seem to be positing that it's entirely expected and understandable that wealthy individuals in well functioning systems should commit fraud to the detriment of the system that brought them their wealth. That seems counterintuitive to me, at least.
"So... Taxes?"
If we're talking about wealth not income, then no, not really. We don't usually think of asset seizure as "taxes". In other words, one "taxes" flows (like capital gains and wages) and "siezes" stocks (like bank deposits and equity).
"You seem to be positing that it's entirely expected and understandable"
I wasn't making value judgement, but yes, if you look at it with the assumption these wealthy individuals are cold, calculating, self-interested actors, then it's "expected and understandable" to me.
"That seems counterintuitive to me, at least."
I think you're using "intuitive" as a shorthand for "the way things ought to work in a righteous world", where I find incentives and disincentives to be a more intuitive way of understanding the world.
"wealthy individuals in well functioning systems should commit fraud to the detriment of the system that brought them their wealth"
To be fair, it's not necessarily fraudulent to have offshore accounts or to conceal your identity (it can certainly be depending on the circumstances). Technically I have an "offshore" account, I just happen to be living outside the US and a US citizen. I also use mechanisms to conceal my identity when registering domain names, for example. Is it the same thing, no, but these people might not technically be doing anything illegal.
It isn't necessarily true that those systems "brought them their wealth" either. Plenty of them likely inherited wealth that was accumulated long before the current systems were put in place (granted, it could very well have been accumulated illegitimately 300 years ago).
(Again, I'm not saying any of this is how the world should work, I'm trying to look at the world dispassionately and describe how things seem to be)
At the level of wealth we're discussing, these individuals probably have to think about "diversifying" among nation-states. Instead of worrying about whether to short the tech sector, they're worried about a country being invaded and the new puppet regime deciding to nationalize the hydroelectric dam they financed. Or they may be worrying about whether their country of residence will pass a law that the biggest national telcom must sell the government a majority stake (i.e., their share) at a government-mandated price denominated in an inflating currency... with expert bureaucratic efficiency.
So... no, not really taxes.
I've noticed some people have gotten into tricky money situations and forever after adopting "I won't let that happen again" mentality.
Lawsuits, divorces, taxes on unrealized income, taxes contested by another state, offshore earning complications, ...
The trauma of giant unexpected bills or losses can make people do ... things.
Nope. Legacy protection. Protection from state seizure and civil forfeiture. Protection from nationalization. Protection from a spouse or even your own children. Protection from takeovers of family businesses and assets.
There are a number of reasons why we might use offshore companies and apparent tax havens - while the taxes are an added sweetener, the main reason is that there is often concrete rule of law in these jurisdictions.
Did you know that for Russians and Chinese, the US is a tax haven? As long as you're not a US resident, you only pay US taxes (which can be easily optimized to be far below Russian or Chinese taxes). You enjoy a high degree of anonymity. You also get to gamble in the biggest equity markets of the world, which are backed by a strong financial system eager to lend you gambling money based on your assets.
Compare that to Russia, India or China, where your assets can be seized at a moment's notice, on the whims of some pencil pusher bureaucrat or judge.
Ok now find their hidden assets and take them. Criminals shouldn’t be allowed to get away with crime right? These are some of the worst, IMO, as they rose on our backs and then turned around and stole the fair share they owed to society via tax cheating.
> find their hidden assets and take them
Asset security is exactly one of the reasons people seek foreign shelters. If you've got a ton of value to control, you want it to be secure, and sometimes your own government is the primary threat.
Your reasoning is the exact reason that they left in the first place.
"We don't pay taxes; only the little people pay taxes."
— Leona Helmsley
TIL : https://en.m.wikipedia.org/wiki/Leona_Helmsley
What a horrible human being.
They can leave, their assets can not.
money is not a finite supply. value is often created without taking from others.
This is especially true if your wealth comes from capital markets.
If I buy a bunch of baseball cards at 1c each and later it turns out that the market values them at $100 each, I never actually "took" money from anyone. Yes it's patently unfair that I got that lucky, but it wasn't necessarily at anyone's expense.
Now, when I actually go to sell those cards then I do actually "take" money from someone else, but while those gains are unrealized it's just paper wealth.
In such a case it's also not clear who I am "taking" from. The person buying them off of me gave me the money, but you could also say the baseball card company was exploited and lost out on pricing their cards at $100?
Money has no inherent value; it is just a currency, an indirection, a promise. The economy must always bottom out at a physical good or service. You can keep trading promises of goods and services in various forms, but ultimately you end up with the inescapable tyranny of physical existence that is a closed system, with the one exception that we get energy from the Sun and stored forms of energy on this planet.
No wealth was created by "discovering value" or finding someone with money to buy something that was already there before. If this new person decided to spend $100 on a baseball card, then they didn't spend money on something else, so the market for those other things is naturally going to price them lower. So the $100 came from somewhere[1].
All of these open system chains of thought that assume any "non-zero sum game" either improperly account for devaluation of other goods or they assume accumulation of labor, and typically add a side helping of assumed exponential growth.
[1] Which is not say that money cannot be created from nothing. In fact, it is all the time. Debt--loans, stocks, bonds, IOUs--is money creation.
Because the seller left money on the table during a sale because they misread the room when they set the price does not mean the buyer exploited them.
>Yes it's patently unfair that I got that lucky
it's not unfair since you took the risk of potentially losing your original investment; you also put in the time to learn about baseball cards, while other people were interested in antiques and studied and bought those, also with a risk that what they bought would decrease in value.
Can I interest you in some Beanie Babies?
> you could also say the baseball card company was exploited and lost out on pricing their cards at $100?
The baseball card company is in the business of selling lottery tickets. If there wasn't a secondary market for the ones that get really valuable, they'd sell a lot fewer new cards to people looking for a winning lottery ticket.
It's a weird business for them because they're selling lottery tickets, but don't necessarily know which ones will be winners. Although with all the statistics and moneyball stuff, they'd sell a probably have a better idea now than in the past.
> It's a weird business for them because they're selling lottery tickets, but don't necessarily know which ones will be winners.
I think it's more like gambling on horse races. They make money by making the opportunity, and it's mostly the participants who prey upon one another.
companies aren't baseball cards, their growth is tied directly to work that the humans in the company do, and they sure are paid for it, but if they were paid a fair share of the company's profits then that increase in share price would evaporate, because the workers would be getting the rewards from the productivity.
In other words, you owe taxes on the capital gains because someone is working to make those gains for you.
> their growth is tied directly to work that the humans in the company do
They're linked but it's not 1:1. The whole point of a corporation and a value-add economy is to do a force multiplier on the cost of labor. It doesn't matter how hard you work when digging with a shovel, a lazy guy with an excavator will create value faster than you can.
The guy providing the excavator is currently keeping the lion's share of the productivity gains, and that's not good. But it's also not quite the same as saying all of the wealth comes from exploitation.
The value of the stock is the value of the corporation, right? What’s the value of it if you don’t have humans to man the factory? The only reason Capital has capital is because they’re hoarding it since the beginning of human economics. If everyone shared equally then the guy with a steam shovel becomes a team who built, bought, or traded to get a steam shovel that they share to make their collective load easier.
So in my world view, yes, all wealth is exploitative. No one person can do enough work to earn millions and billions more than others.
Value can be created from nothing, I am sure you can give an example or two, but in general nothing large and valuable is created without the effort of a lot of people together, relying on the societal systems that are funded by taxes.
I suggest that you could count on one hand the number of people in the entire history of humanity who could and would hide this kind of wealth who didn't earn it through somehow relying on others and/or society's structure.
Then why don't the uberwealthy focus on that instead of stealing from the public?
Why do predators seek out the weaker animals in a hunt? Nobody wants to work harder than they have to: work smarter not harder.
stealing easier.
The planet's ressources are finite though. When you print money, you don't create value, since there's still the same amount of matter being traded around, you just reduce the value of everybody's money. And so you rob everybody.
You are conflating money and value. Value is infinite, e.g. compare the world today to 200 years ago. Even relatively poor people live better today than kings did then. Creating value is not the same as printing money.
Would we live with the same standards today if we had never printed any money?
arguably we would have better standards because it would mean less spent on wars, which are pure destruction of value
What natural resource are we running short of? Land might be at the top of the list, but we are only utilizing 70% of that. And if we get low on that, we just switch to aqua-farming or floating cities. No one is hoarding all the natural resources.
No argument that printing money devalues everyone else (this is the definition of inflation). End the Fed.
in fact value is created in every transaction: someone sells something for more money than it's worth to them and someone buys the thing for less money than the thing is worth to them (otherwise the transaction would not occur)
> value is created in every transaction
Lots of transactions actually destroy value, they just do so in a way that externalizes this cost.
A good example is advertising: companies are incentivized to dump all available resources into marketing, because those who don't get out-competed by those who do. It is a winner-takes-all game where the strategy that maximizes global value is nowhere close to being a Nash equilibrium.
A more extreme example would be hiring someone to go rob a bank. No value is created (lots is destroyed) but both parties to the transaction come out ahead.
> otherwise the transaction would not occur
Doesn't this assume perfect information?
no, how is that relevant? someone has something to sell for $1 that you value more than the $1 in your pocket so you buy it; doesn't matter if someone a block away is selling it for $0.50
A perception of value depends on an assessment, which requires information. Suppose the thing you thought would provide $1 of value doesn't actually.
Edit: concrete example. https://en.wikipedia.org/wiki/Lemon_(automobile)
Edit2: metaphorical example. I have a very valuable bridge to sell you. Just hope the value you receive isn't different than the value you perceive at transaction time. https://en.wiktionary.org/wiki/I_have_a_bridge_to_sell_you
NFTs broke this.
I'm not sure what you mean, do you mean resources aren't finite?
The pie can always get bigger.
Value “creation” and money supply have nothing to do with each other.
But value creation isn't the point of taxes?
False. Value is finite.
Some geniuses think that value can be created out of thin air. Like if an artist paints a painting.
No. This is false. The artist needs food to survive... he needs money to buy food. Who paid him money for the art? Another artist? So you can have a whole economy of artists producing nothing but art (aka value) out of thin air and they don't need to eat or buy food? You think that's actual value? That's a non functional economy. Someone needs to produce food in this economy. Someone needs to produce the energy to make the paint to create the art.
When you follow the chain all "value" is connected to something concrete. Energy, food, etc. And ALL of these things are finite.
When you think of value it can be thought of as entropy. Any action that lowers entropy requires an energy input.
That being said. Value is never created. It is always taken. There are two root sources. The earth and the sun. All value is sourced from mining energy from the earth or mining energy from the sun. (Technically it all comes from the sun as energy in the earth <oil> comes from the sun).
The issue with both of those sources is that the rate at which energy can be taken as an upper limit. The sun can only produce so much energy and we can only extract it at a specific rate. The earth is the same, although the earth has a much more smaller reservoir that can be used up in a foreseeable future.
Just had to rant here. Because the idea that value can be created out of thin air is just completely and utterly false. You can overpay for something, but in the end when you follow the chain... the creation of value is taken from limited reservoirs of low entropy. Intuitively we are using something up, and the scientific reality ALSO reflects this fact. Trust your intuition, don't come up with convoluted ways around this because it's FALSE.
PS: actually I was wrong about the earth. coal, geothermal and nuclear energy are exclusively from the earth and not the sun but these also have an upper limit and a limited rate of extraction.
You're using a computer. Somebody created that valuable computer out of dirt and rocks.
The energy cost needed to transform the dirt and rock and the energy cost needed to create the body of knowledge and skillset required to get to that point DID not come out of thin air.
I said it once and I’ll say it again. Follow the chain of resource creation. There’s a huge energy cost.
There is no particular correlation between value creation and energy consumption. Your theory is likely unique. I could burn a log, releasing a lot of energy, and no value would be created. I could carve a figure into a log and create value.
Your examples disagree with your initial statement actually. How did you get the log? How did you carve the figure? Both of these require energy consumption, as we aren't at the stage where we are magically planting trees and teleporting them into our workspaces for carving/burning.
It’s not a theory bro. It’s fact.
Take away all energy from this world. You get 0 value creation. Everything is dead nothing can move.
That’s the correlation. I don’t understand why you’re using big words like correlation as if this is something that needs to be studied. It’s common sense imo.
The energy came from the sun.
Economics is just “what should we do with this sun energy.”
Yes, the sun bombards us with free energy that all energy on the earth is sourced from, so dont worry about accounting, since we clearly dont have the same amount of wealth as 5000 years ago
That energy accumulates as low entropy. The earth is a continuous low entropy reservoir soaking up the energy and continuously generating more complexity via evolution and also via economic progress.
That’s how the accounting works out.
The reality is energy is neither created or destroyed. It just reaches a non workable state. In terms of balance of physical energy we technically receive the energy then the energy radiates off the earth. We don’t keep the energy.
What we do keep is the low entropy. The energy comes forth from the sun in a concentrated beam. We extract the low entropy from the beam into complexity. Over millions of years this complexity accumulates making earth a reservoir of increasing complexity and lowering entropy. The beam of energy from the sun gets all of the low entropy extracted and radiates into space in a non useable form.
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If you are hiding them then you did not pay the owed taxes to cover for part of the externalities of your business
This is on the level of "getting money out of politics" — great idea, everyone excerpt the people who can do it agree.
Cayman Islands is a tax haven
What does this mean? What does it have to do with the comment you're replying to?
What's interesting about the Cayman Islands is that they are the 4th largest holder of U.S. debt, with $441 billion[1].
So USD flows into Cayman banks, and those banks need to do something with the massive amounts of money just sitting there. So what do they do? They buy U.S. Treasuries. And half a trillion dollars is just their holdings in U.S. debt, imagine how much more money is hidden in those accounts and invested in other assets.
1. https://ticdata.treasury.gov/resource-center/data-chart-cent...
It's a tax haven right up until, say, the us navy parks a fleet on their doorstep.
The navy that exists to serve the ruling class that certainly have their own wealth hidden in tax havens?
Cayman Islands, along with British Virgin Islands, Jersey, Guernsey etc are all part of the UK.
And as allies of the USA, the navy ain't coming.
The US Navy isn't gonna want to piss off 80% or more of Congress that way.
Also the fact the US Navy doesn’t just make decisions on its own to blockade another nation. It would do so under orders. The person giving that order more than likely would have accounts there themself. So that’s very unlikely to be an order ever actually given.
Forget congress, probably half the first world's leadership
It would be a wonderful world if only people could force those running a less dumb economy to abide by their dumber rules. Wouldn't it be awesome if NK could park a navy somewhere and make sure everyone does things for the benefits of The People and not in whatever selfish way they do them now?
Well the people who control enforcement are the elite. Right? Trump is one of the elites. So you think they're going to enforce anything? You think it will be easy?
No.
The recoil from the Trump graft machine will control the army.
None of this stuff is permanent.
Is there a good primer on how this kind of offshoring works, for people ? I have notions of how tax evasion / optimization works (things like the irish-dutch sandwich, where you manage to pretend that Google does not make any money in France because it has to pay a very expensive license to Google Ireland , etc..)
But for offshoring, I'm clueless as to how manage to "reshore" the money, so to speak, so that you can eventually... Spend it to buy stuff. (Or isn't that the purpose of hiding the money ?)
Brooke Harrington (one of the professors from the OP article) has an excellent book on the topic, called Offshore.
Naive take, they never reshore, but take loans with assets as collateral.
That’s my understanding of how modern money laundering works. Can’t move your money out of a particular bank due to regulations? Use it as collateral to loan money to any other entity you wish. Fancy.
I talked to someone recently who claimed to know someone personally with 16,000 metric tons of gold. He claims that there is waaay more gold than is officially on the books. Hard to believe… but maybe not. He claims that there is unbelievable wealth out there—many more hundred-billionaires than official stats hold. Ok. Who knows?
> 16,000 metric tons of gold
There are approximately 200,000 tons of gold ever mined in total.
That’s what he disputes…
What is more likely, that your friend knows all about thousands of tons of secrete gold mined without anyone knowing, or that with constant satellite pictures of the earth, people actually do know roughly how much gold has been mined?
And I know someone with a stash of 100000000 bitcoins. The yield of gold mines is known, and it's pretty easy to extrapolate into the past.
I understand where all these conspiracies come from. It typically starts with "there must be enough gold to back all the savings, because Bretton-Woods or something". Then they check the total cost of the world's gold. It's a small fraction of the total savings.
So obviously most of the gold is hidden somewhere.
It it isnt being used, it basically doesn't matters. The only interpersonally relevant aspect is spending and consumption.
If the guy living under the bridge has 1 million metric tons of tons of gold they don't spend, it is functionally equivalent to if they had none.
$1.7 trillion or 2* the holdings at Fort Knox? All the Royal Houses of the Arab Gulf can't even have that much money liquid, even with 365 days' heads up. And, no: don't do a "trust me bro," here. At their peak, ARAMCO made $161b in profits in 1 year - and the bulk of that goes towards the general pop. in the form of subsidies, etc. Simply, $1.7 trillion doesn't exist anywhere in such liquid form.
If you claim there are hundreds of stealth billionaires with $1-$20b in cash & assets, I'll readily believe that: African kleptocrats' kids, Middle East royalty, European heirs with a low profile, Russian oligarchs, etc. But, not $100b. Or a trillion. That's an insane amount of money, larger than the GDP of like 80% of the world's countries.
>Is there a good primer on how this kind of offshoring works, for people ?
There isn't. People with deep knowledge of this don't invest their time writing blogs. Bit like OpenAI employees don't write blogs about how to train world class models. It's just not a thing.
There is an abundance of shrill articles by journalists writing about it that derive their knowledge from other articles written by journalists who in turn...
The big tech stuff flowing through Ireland is indeed lets call it convenient for both ireland and big tech, but what people don't realise is that chances are very high that their own pension likely flows through offshore structuring too. These places act as a central neutral clearing house of sorts that is acceptable to a lot of jurisdictions so even actors not after tax evasion use them.
At the multinational level you never have to actually reshore anything. The corporation buys things, or you take loans at incredibly low interest rates using corporate assets as collateral. Using made up numbers, imagine you take out a $1M loan, you get charged 1% interest, you put up $2M in corporate assets as collateral, and the corporation pays the bill directly.
The way money is re-shored is whenever a US President (so far only republican Presidents) decide to give companies a tax holiday. So far Bush and Trump gave such holidays. Which means that corporate treasuries only have to wait for the next Republican president to re-patriate their off-shore cash. During this time corporations usually use debt to service dividend payments, share repurchases, and operating expenses in the US.
https://en.wikipedia.org/wiki/Repatriation_tax_holiday
> But for offshoring, I'm clueless as to how manage to "reshore" the money, so to speak, so that you can eventually... Spend it to buy stuff. (Or isn't that the purpose of hiding the money ?)
Why would you reshore the bulk of funds? We're talking about people for whom a couple of million is just spare money.
If you want to buy a company, you just use the offshore funds directly. If you want to buy a major luxury good (a yacht or a jet), you do the same and then just lease/rent it to yourself.
If you _absolutely_ need cash in the US, you can pay yourself dividends and take a hit paying taxes on this amount only.
The study:
https://journals.plos.org/plosone/article?id=10.1371/journal...
This is so surprising to see research on. It’s also very brave. It’s the kind of investigation that could get a drone or a hitman sent after the investigator.
The elites know they're untouchable so they do nothing.
https://en.wikipedia.org/wiki/Panama_Papers
https://en.wikipedia.org/wiki/Daphne_Caruana_Galizia
Daphne Anne Caruana Galizia (née Vella; 26 August 1964 – 16 October 2017) was a Maltese writer, journalist, blogger and anti-corruption activist, who reported on political events in Malta. She was known internationally for her investigation of the Panama Papers and subsequent assassination by a car bomb. Caruana Galizia focused on investigative journalism, reporting on government corruption, nepotism, patronage, and allegations of money laundering, links between Malta's online gambling industry and organized crime, Malta's citizenship-by-investment scheme, and payments from the government of Azerbaijan. Caruana Galizia's national and international reputation was built on her regular reporting of misconduct by Maltese politicians and politically exposed persons.
It's why the Panama papers etc was done by a consortium of journalists. Much safer as killing one journalist or two doesn't make any difference to the end publication.
Shit, forgot about that. Thanks for the reminder.
Really? I seem to recall a certain journo that went in a whole person but came out in many smaller pieces. Journos are NOT untouchable.
I don't think they meant "journalists" when they said "elites".
no, i read it as the "they" referring to journos, not that "they" referred back to the elites. but I can read it that way now
It's not an investigation naming individuals, it's high level pattern analysis.
No one is going to get killed for this one!
Because the author's definition of Blacklisted jurisdictions is not clear in the article or the research paper without buying the footnoted book:
The current EU blacklist includes 11 jurisdictions: American Samoa, Anguilla, Fiji, Guam, Palau, Panama, the Russian Federation, Samoa, Trinidad & Tobago, US Virgin Islands, and Vanuatu. (Source: EU List of Non-Cooperative Nations for Tax Purposes - European Commission)
If anyone has a better definition or has read the underlying book, please let me know, but I found the research hard to follow without this being well defined as the OECD apparently no longer maintains a blacklist.
Also, I wondered why more famous countries are not on the list and it says that these large commissions often identify small weak islands, because large players like the US, Britain, Switzerland, Luxembourg, China have enough political power to not be placed on the list.
I have to say that as an American in 2025, this kind of news hits a little different than it used-to.
In prior years, I didn't have nagging anxieties about people's life savings being arbitrarily frozen/seized as a form of political retribution, or the imposition of China-style capital controls to ensure "patriotic investing."
Before anybody decries that as (still) far-fetched, consider that the federal government forced banks to drain millions from the accounts of states (NY), announced $365,000/yr "fines" on undocumented immigrants, and imposed arbitrary (illegal) import taxes while threatening companies against showing it on the bill.
I've just concluded that the ultra wealthy are in some aspect stateless people. Sure, they have a passport - or multiple - but they'll emigrate to another country without blinking, if it means slightly less taxes and less transparency. And that's on top of their offshore assets, managed by other people.
Using your assets/wealth as political power seems to have become more popular here in northern Europe. Taxes too high? Fuck you, I'll take my money and companies to Switzerland. If politicians buckle, they'll move back home. Seems like a race to the bottom, where the tax havens will just compete for the best terms to the ultra wealthy.
>Sure, they have a passport - or multiple - but they'll emigrate to another country without blinking,
You forgot one variable. Women have a mind of their own.
Switzerland tried to take London's Hedge Fund Industry. The wives and kids hated the lack of things to do compared to London.
Same with Footballers. If a football player or manager signs for a club in a unattractive location, the wives may stay in the previous City.
Right, and let's face it, the ultra wealthy are not really known for their "family values" or their dedication to their children.
They'll provide them with financial support and that's where their relationship often ends.
Their loyalty is mainly to their wealth and status, everything else around them is "stuff" that merely exist to fulfill the goal of increasing profit.
I'm sure there are exceptions but I'm making a simple observations.
What I wonder is: Will they be missed? They're taking money away that the government won't have access to anyway, and by hoarding it, effectively reducing the money supply. If they live somewhere else, they might have less influence over our society.
The ultra-wealthy have been stateless for centuries.
For example, Britain’s famous “non-domiciled” tax exception was first created in 1799. It allows UK-resident foreigners not to pay tax on their foreign income except for funds they bring into the UK.
Wealthy families have been able to live their lives enjoying the stability of a Western democracy without paying taxes, keeping their assets scattered safely around the world and their citizenships wherever they can get the best deal.
The USA is also joining this game with Trump’s “gold card” that offers a path to citizenship for a $5M fee. But I don’t think the very rich will bite because US law and the IRS expect citizens to report their global income (at least for now, maybe Trump will eliminate this too with a stroke of a pen).
I'd like to see a move to eliminate the entire idea that a corporation can own a stake in another corporation. Make it individual owners only. Clear the haze.
It's kind of sad that whenever there's an article about the very rich using alternate, shadow financial systems to avoid paying taxes and (often illegally) hide their wealth, most of the comments are "Why can't I do that, too?" instead of "Why can't we find and punish the people doing that?"
It's not worth getting upset about. I am sure there are leftists who read HN, but the popular tone of the political commentary here tends to slant pro-capitalism, libertarian, anti-woke, meritocracy, dark enlightenment etc. It makes sense if you understand the website as a market research slash hype incubator for an American venture capital firm. Many of the people posting here are actively employed in the get rich quick startup scene and even those who aren't are still likely to be amongst the wealthiest segment of society due to their work. Almost certainly the vast majority are men. It is what it is.
The comments here are not representative of broader society, but they can sometimes be interesting to gain a sense of where an influential chunk of the global tech elite is at. I have heard HN political or social talking points echoed in the mouths of leadership at company all-hands, and non-HN reading friends at other tech companies have mentioned similar themes at theirs, so there is some value in having this window into the culture as an early warning system.
"I want an end to corruption, or a chance to participate in it!"
it’s sad that people want freedom? I think it’s way more sad to imagine a world where the state reigns supreme, it should always be possible to go solo if you can pull it off, it’s way more human, the state is just other people, often using bully tactics, they shouldn’t be able to rule over you, there should at always be places to escape to
If you are an activist of any kind, it's a good idea to be offshore. A UK Palestinian support group had their account frozen and access to the funds blocked just this week
https://x.com/declassifiedUK/status/1945077503996895319
If you are an activist, have stuff offshore in a country other than the one you campaign in. And Crypto.
Brooke Harrington (one of the co-authors of the paper) was interviewed by Sean Carroll for the Mindscape podcast: https://www.preposterousuniverse.com/podcast/2023/05/22/237-.... I was sure this study must’ve come from her group when I saw the title.
>>>"cases like Singapore where the government is free of corruption but low on civic participation"
What is 'civic participation' in this context ?
Basically this paragraph from https://en.wikipedia.org/wiki/Politics_of_Singapore:
"Singapore has consistently been rated as the least-corrupt country in Asia and amongst the top ten cleanest in the world by Transparency International. The World Bank's governance indicators have also rated Singapore highly on rule of law, control of corruption and government effectiveness. However, it is widely perceived that some aspects of the political process, civil liberties, and political, labour and human rights are lacking. The Economist Intelligence Unit rated Singapore a "flawed democracy" in 2024. Freedom House deemed Singapore "partly free" in 2025, at 48/100 — 19/40 for political rights, 29/60 for civil liberties."
Fewer than expected number of protests and demonstrations.
Surely the expected number of protests and demonstrations in a country where you get whipped for doing so is zero?
No caning is not a punishment for protests and demonstrations; that would be ridiculous as they would lose even the perception of free speech as a fundamental liberty. But generally, such protests and demonstrations have a lot of restrictions in place: they need to take place in a specific location (Hong Lim Park), they need to be pre-arranged, they cannot be religiously sensitive, they cannot be about the political issues of a foreign country, and speeches against politicians are often met with libel lawsuits. The only large-scale protests that happened in recent memory are all about same-sex marriage and LGBT rights.
What is weird is how countries still have enough money to function despite this
I wonder what sort of political event would change that, probably when EU countries realize they need money to rebuild their military.
Related book:
_Secrecy World: Inside the Panama Papers Investigation of Illicit Money Networks and the Global Elite_ by Jake Bernstein
> Yet, elites who come from countries where their assets are likely to be seized due either to a lack of civil rights or a government with effective regulations tend to use a “concealment strategy” to remain anonymous.
Not to be a defender of criminal money laundering, but this is an important caveat. When all money is traceable, digital and controlled, good luck funding anything against the government in an authoritarian setting.
Unfortunately that's a catch-22
I'm well aware of the impact of corruption and organized crime and how it affects billions worldwide, I've read more than one book on the subject. but it's analogous to the issue with cryptography, privacy and protecting people, especially minors, on the internet for example
Previous related work by the same group: https://home.dartmouth.edu/news/2023/02/targeting-wealth-man...
Funded by US taxpayers via a grants from the National Science Foundation and Dartmouth College.
I need to think about starting a Panama private interest foundation.
>Billionaires, oligarchs, and other members of the uber rich, known as “elites”
it's a small point but, "elites" usually refers to those with good educational credentials who hold down white collar jobs at universities, newsmedia, law and finance firms, political campaigns, non-profits, etc., jobs they got because their parents know how to help them network and who can afford to pay their rent in major cities while they "pay their dues" as interns in these same organizations. Yes, they do have higher than average incomes, but I heard a great word for them (from a left-leaning source fwiw) who called them "the 19%". They are not the 1%, but they make up the rest of the 20% and they work for the 1%, and though they often have left leaning political ideals, it's human nature to want to defend what you have and feel you earned it, and also to pass it along and take care of your own children's futures. According to this guy, they control 2x the wealth that the 1% controls and flex a lot of political muscle.
Billionaires, oligarchs, and other members of the uber rich are generally referred to as just those things. The people behind this study I would guess are in the 19%, and by labelling the billionaires and oligarchs as elites, unconsciously they shed the shame of being elites themselves (Dartmouth? pure ivy league).
All I'm mad about is I don't have access to the same sorts of instruments. I pay an _excessive_ amount of taxes that return at like a 0.0001% for society. I could make 12% on them and give 5% directly at a much better rate.
Charity is not a replacement for a functioning government. Assuming you're in the US, it's hard to argue that you're not paying far less than you should be, given how quickly we're running up the deficit.
I'm of the opinion that we should have a constitutional amendment which limits debt to gdp to 80%. If the CBO indicates we will breach that, congress has 8 years to get it back under control before the CBO has the authority to ban officials from public office if it's determined they voted in favor of the legislation responsible for the breach. No doubt there are problems around that. Someone smarter than me can fill in the holes.
There’s a big problem with that. The “deficit” is just the liquid financial savings of the private sector.
The correct approach is to require all those people worried about the “Debt” to hand over any liquid savings they have in bank accounts or retirement funds. Since that is what is causing it by accounting identity.
After all if they consider it to be such a problem they should put their money where their mouth is.
Read The Deficit Myth by Stephanie Kelton to understand how the system actually works.
Amusingly a larger deficit means government has more space to spend, not less. People saving means they are not spending which means resources are left underemployed.
Debt to GDP is not a relevant concern in a free floating currency has Japan has demonstrated for decades.
> I could make 12% on them and give 5% directly at a much better rate.
You could. Would you, though?
History (milennia of it) says the average answer is "no".
I already give 11% of my income away, so yes.
Is 10% of that a church tithe?
Does it matter?
Yes.
There is no risk free investment that will return you 12%. In a year where you are down 30% are you still contributing 5% on initial capital? If not, you are just constructing an instrument where you only pass through downside risk
> There is no risk free investment
Fixed that for ya!
For all practical purposes you can - and the world broadly does - consider e.g. TBills to be risk free (or take your favourite interbank lending rate etc etc).
The US government has confiscated value from T Bills before.
The government used to sell two bond types - dollar bonds that paid off in dollars, and gold bonds that paid off in gold. The gold bonds were safer and hence paid a lower interest rate.
Enter FDR. FDR decided to pay off the gold bond holders in dollars, not gold, and since the value of gold vs dollars had diverged substantially, FDR confiscated the difference.
That was the end of the phrase "sound as a dollar". Gee, I wonder why nobody says that anymore!
The largest risk of TBills is that inflation will shrink their value, and with catastrophic deficits that is a very, very real risk. That's why I don't invest in bonds or any investment that is denoted in dollars.
>>That's why I don't invest in bonds or any investment that is denoted in dollars.
Most investments seem to eventually (?) denominate into USD equivalents, especially if you live in the US. Do you mean hard(er) assets like real estate or commodities (which also leaves me puzzled because they’re still typically denoted in an underlying fiat currency and especially USD if they’re domestic assets).
This is heterodox opinion to modern financial theory. You’re welcome to hold it, I’m not interested in trying to convince you otherwise — I think it undermines the larger point I’m trying to make in an unhelpful way.
That sucks, sounds like you might have to try to improve the system that you live in. It’s a shame that most people that live in a society have to concern themselves with making things better instead of gambling and promising some of the proceeds to their pet causes
If you're making that 12% exploitatively (which most ludicrously-high-interest "investments" are), that's a net harm for society. (A smaller-scale example, to aid with intuition: there once was a lung cancer charity which funded the promotion of cigarettes, to increase the dividends of cigarette stocks, so they had more resources with which to help lung cancer victims.)
Money isn't real: it's an abstraction. What it's an abstraction for, on the other hand, is very real. Don't confuse the map and the territory.
Higher returns always come with higher risk. This is not exploitation, nor do high risk investments harm society.
Musk, for example, invested hundreds of millions into Tesla, his entire fortune. Soon afterwards, he was within hours of personal and business bankruptcy.
SpaceX also was one explosion away from total bankruptcy.
Say what you will about Musk, the man has a lot of guts. Without those guts, there'd be no Tesla and no SpaceX and no Starlink.
How is 'exploitatively' defined? I have seen it used as 'literally anything that makes a profit is exploitation by definition' crap used unironically often enough that 'exploitation' itself has become a major red flag (no pun intended). Those users of such definitions just love those sorts of tautologies disguised as logic as it makes for a nice and orderly world view to be able to make baseless and frankly, batshit insane assumptions. Like 12% returns being only possible through net harm to society. It is perfectly normal for a successful small business to have a ROI of 25% to 40%.
Right: a successful small business where people are doing actual work can have a potentially-unbounded ROI. "Money makes money" schemes, on the other hand… the situations where access to money is genuinely worth 12% returns to someone are slim. (If it's a high-risk venture, then that's not 12% returns in expectation: "loan that we'll write off if your venture fails" is providing actual value, under certain circumstances.)
Scams, cons, grifts, and destructive exploitation of common resources, on the other hand? Those can get massive numbers of monies out for every single number of money in. So that's where my mind goes, when someone talks about "make 12% on [a pile of cash]".