April 11, 2016 - Freedomain Radio - Stefan Molyneux
20:13
3257 What Pisses Me Off About The Panama Papers
Over the last year, 400 journalists have been secretly decoding over 11.5 million documents which were leaked from the Panamanian law firm Mossack Fonseca. An estimated 2.6 terabytes of data show several decades and billions of dollars in transactions in offshore vehicles for corporations, investment funds and billionaires. United Kingdom Prime Minister David Cameron and Russian President Vladimir Putin are claimed to be implicated in the leaks – but some very important information is missing – namely Americans and United States corporations. Stefan Molyneux is pissed off at the controversy surrounding the Panama Papers and breaks down the United States as an international tax haven, protecting your assets from theft, the political purposes of this “leak,” the involvement of George Soros and the failure of modern journalism once again. Freedomain Radio is 100% funded by viewers like you. Please support the show by signing up for a monthly subscription or making a one time donation at: http://www.freedomainradio.com/donate
Hi everybody, Stefan Molyneux from Free Domain Radio.
I hope you're doing well.
So I've been asked by, oh, quite a few people to give my thoughts on the Panama Papers.
And I think you'll find it a fascinating dark Dickensian tale of skullduggery manipulation and the not-action-movie-titled regulatory capture scenario.
So for those who don't know...
About a year ago, a German newspaper had leaked to it 11.5 million documents from a Panamanian law firm named Mossack Fonseca.
And it is 2.6 terabytes of data.
Hey, slightly more than we do in podcast downloads a month.
And this data shows billions of dollars worth of transactions dating back about 40 years.
So, well, that's quite a lot.
Now, Setting up these offshore vehicles.
It's fairly common for corporations, family offices, run-of-the-mill billionaires, investment funds, and so on.
So the idea is you set up corporations in low or no-tax geographical jurisdictions, and then you can send cash to it, park cash there.
You can have them store shares.
Other assets, even art, can be sheltered under these companies.
Now, setting up these structures, yeah, just a couple of thousand dollars, and once you hand your money over to law firms like Mossack Fonseca, they draft it and register it in the local jurisdiction, then there are annual fees that are charged to maintain the company, and so on.
Now, why does this happen?
Well, It happens for a variety of reasons, but in particular in the US. Well, the US has the highest corporate tax rate of the 34 relatively free market nations that make up the OECD. The marginal corporate tax rate in the United States is 35% at the federal level and almost 40% once state taxes are included.
So the global average is not 40% or almost 40%.
It's about 25%.
Switzerland has got the lowest at 8.5%.
But if you factor in local taxes, it goes up to a little over 21%.
Ireland, the lowest overall rate at 12.5%.
So that is one of the reasons why.
And of course, everyone thinks, oh, the corporations will pay taxes so that I don't have to.
And of course, the Money that the corporations pay in taxes is deducted from your paycheck because there's less money to give you raises and all that kind of stuff.
Now these 400 journalists, this leak group we'll call them, well it could be said that there might be just a little bit of conflict of interest between the masters who fund them and their particular agenda.
So, of course, the leak group has been funded by the pro-open borders George Soros.
Sorry, I always seem to get that wrong.
Also chipping in to fund this investigative independent journalism is David Rockefeller, the Carnegie Corporation, the Ford Foundation, Goldman Sachs, and so on and so on.
None of whom, of course, would ever be involved in anything that is...
Corrupt, and of course they always pay their taxes, and steadfastly refuse bailouts, saying, no, no, we make mistakes, we pay for them.
Wait, sorry, I keep drifting into opposite land.
So all of these organizations, some significant left-wing impulses in there.
They're all funding this International Consortium of Investigative Journalists, and they say, go forth and investigate all of these perhaps shady international financial practices.
And they have produced a whole bunch of lists.
Conspicuously absent from this investigative journalist's scouring of the Panamanian data is U.S. companies.
Huh, interesting.
They get a lot of funding from U.S. corporations and charities.
They don't seem to be printing any of the U.S. companies.
They have been trying to tie other people in, like Vladimir Putin had a friend who played cello, and his name has shown up, and it's all very tenuous.
But, of course, the media, in its rabid objectivity, keeps putting pictures of Vladimir Putin, first and foremost, Putin, implicate us.
Like, it's not true at all.
So apparently, this is what investigative journalism has devolved into.
Hey, a bunch of billionaires will pay you to print their enemy list, but we'll just call it a leak.
Unlike WikiLeaks, which put all of the information available to the public, this has been hoarded, right?
This is cherry-picked information you are not getting.
No one outside of this consortium is getting.
A full view of this data.
And that, of course, is a huge problem because nobody is verifying, nobody's double checking, nobody's seeing if people are skipping over stuff because of conflicts of interest and so on.
And people have noted that, you know, why are people talking about Putin when he doesn't even show up?
Now, who does show up is David Cameron, Prime Minister for now.
His father, of course, lived in the UK. His father set up one of these offshore companies and never paid any taxes in the UK on the money that went there.
And that's, of course, become a problem.
The Icelandic president has resigned because of conflicts of interest with regard of this.
So 14,000 clients in total in the Panama Papers, 441 US-based clients, not one of them, to my knowledge as of now, has been named.
Lots of other Jackie Chan, really important to know about his financial kung fu, but American companies not named.
Now, why?
Why?
Well, it could be the sort of Planned Parenthood video leak thing where they put out a little bit, they wait for the denials to pile in, and then they hit them in the solar plexus of we never did anything of the kind by hitting them with data.
But, you know, another possible theory is that...
The US companies could be open to blackmail, as could US politicians, as could anybody who's not named.
See, this is the problem.
When you have this couple of hundred people gripping control with this fort around the data, nobody can go in and double-check who they're not going after.
And if they're not going after people, it could be for reasons of blackmail and other things like that.
So it is a fairly significant omission to not have the US companies in there.
Now, of course, everyone's getting mad at Panama, you know, the British Virgin Islands, which was the number one destination for these kinds of tax shell-avoiding companies.
Everyone's getting mad at this supposed overseas offshoring and so on, but the U.S., and in particular Nevada, Wyoming, to a smaller degree Delaware, they are the new global tax havens.
Tons of money rushing into the U.S. from overseas.
I'm sure most of it clean, probably some of it not.
But that money is welcome in the US and pretty much it's a no questions asked scenario because in the US you are shielded by about the most impenetrable tax secrecy laws available in this or any other world.
So the idea that the American government is going to get mad at other people for offering tax havens, well...
A spear, as the saying goes, is a stick sharpened at both ends.
It in fact, throw it, goes into you as well.
And the glasshouses scenario is not unusual.
And look, I mean, of course, there are going to be people on the left who openly rail against tax avoidance who are going to be using these mechanisms.
Yes, I'm talking to you, Yowlin Bono, the singer for U2, who is like, we've got to help out the third world.
And then...
Ended up moving his money to the lowest tax environment possible.
Michael Moore.
Well, anyway, the list basically goes on and on.
Now, at the risk of asking you to have sympathy for the devils, let's talk about some of the motivations for people to use these instruments.
So let's start with federal taxes.
Federal taxes in the U.S. It's about two-thirds of the taxes that Americans pay.
Because what's going to happen is, I can predict this as sure as sunrise, there's going to be a lot of shock and, oh my God, the people aren't paying, the rich people aren't paying any taxes.
We've got to regulate and control them more and put in more laws and close the loopholes.
And the rich people love that stuff.
They love that stuff.
They may sort of publicly, oh no, that's terrible.
I wish to keep all of my filthy lucre to bathe in gold with.
But they love, particularly big financial firms, love additional regulations for reasons I'll get to in a moment.
So federal taxes, two-thirds of the taxes Americans pay, and everyone's going to be whipping up this class resentment and class baiting, oh, those rich people don't pay any taxes.
Okay, this is from a variety of sources.
They'll be below.
Slightly different dates, although I tried to get the most recent.
The top 1% of Americans paid 33.4% of their expanded cash income, which is a sort of a broad measure of pre-tax income, in federal taxes.
Federal taxes!
Not even the whole thing.
So, top 1% are paying 33%.
In federal taxes, the middle class Americans, those who are in the middle, 20% pay 13.7%.
As opposed to over 33, the poorest pay 3.1%.
The top 10% of taxpayers in America paid over 70% of the total amount collected in 2010 federal income taxes.
And...
That is up from 55% in 1986.
So the amount that the poor are paying in taxes is generally declining, and the amount that the rich are paying in taxes is generally declining.
So the top 10% pay 70%.
The 90% of people pay just under 30% of the tax burden.
47% of all Americans pay hardly anything at all in federal taxes.
If you remember, Mitt Romney mentioned that we're not going to get votes from people who want to cut taxes from the 47% of people who don't pay any taxes.
And because Westerners in general have generally become like...
Allergic to facts, you know, like you're hypersensitive to bee stings and facts are flying around you like bees.
Run!
Kill!
Burn them with smoke!
And so he said something that was kind of true, but you can't sell tax cuts to people who don't pay taxes.
And everybody went crazy because facts are apparently society's enemy now.
Until reality reminds us that those who deny facts deny life.
The lowest paid Americans, so they earned in 2010 about $8,100, but received nearly $25,000 in government aid, which is why there's not a lot of poor people against the national debt, or single moms against the national debt, for that matter.
So, the top bracket paid 69% of federal taxes.
The bottom bracket paid 0.4%.
That's pretty low.
Now, a lot of people, even on the right, didn't like the sort of tax cuts for everybody in the early 2000s.
And the reason for that is that...
If you cut taxes for people paying barely any taxes at all, they no longer have a stake in the maintenance of property rights in the society, right?
So there was a long time ago, I guess about 150 years ago, there was an argument that was actually enacted in law, which was that you have to have property in order to vote on taxes, because it's a conflict of interest to vote on taxes when you're on the receiving end of taxes and not really paying taxes.
Much of any taxes.
Can somebody on welfare objectively vote on taxing the rich and subsidizing the poor?
Well, no.
It is a financial conflict of interest, and so you had to have property in order to vote on taxes, and thus taxes were kept relatively low.
When women and poor people started getting the votes, then what happened was, of course, they didn't have a lot of property, and so for them to vote to take away the property of others was relatively easy.
So as of 2014, the top earning 1% of Americans pay almost half of federal income taxes.
That's the largest share in about three years.
So the bottom, 80% of Americans will pay 15% of all federal income taxes.
Again, that's In 2014, the bottom 60% are expected to pay less than 2% of federal income taxes, right?
So almost two-thirds of the people are paying less than 2% of federal income taxes, two-thirds of Americans' tax burden.
Now, the U.S. is very heavily dependent on income tax, right?
So 37% of government revenue comes from income tax.
That's compared to 24%.
So it's pretty brutal to be a rich person in the United States.
It's pretty brutal to be a corporation, which is why they're fleeing, you know, like a bunch of roaches when you flip the light on.
And by the by, this is one of the reasons why the US government is so keen on driving up stock prices, because when you drive up stock prices, you trigger taxes for the rich.
So, yeah, just to remind you, the top 1% pay more in taxes than the bottom 90%.
So the idea that the rich aren't paying their fair share, I don't really know.
You know, if one person is driving the wheelbarrow and the other person is sitting in it, then I don't really know that it's an equal share of the burden.
So...
So, you know, the idea that rich people want to use legal means, remember, offshore companies parking money over there, putting your money in lower tax regimes, this is all legal.
So, you know, they're playing by the rules in order to minimize their losses.
You know, that works in sports quite a bit.
You know, you don't see boxers saying, well, I'm only going to box with my left hand because otherwise I haven't.
It's legal to box with both hands.
So that's generally what they do.
I mean, if you're never going to steal a base in baseball, well, you're really not using the proper ways to win a baseball game.
So the fact that people use legal means to minimize their tax payments when they're paying so much taxes already, not that surprising.
You know, people who avoid government predation in the past, you know, draft dodgers who don't want to get enslaved and forced to kill and die in unjust imperialistic wars.
Well, you know, there's a way of looking at that as heroic.
Slaves who escaped slavery in the 18th and 19th centuries by taking the Underground Railroad to Canada were not called like shirkers and lazy people who just didn't want to put their fair share into picking cotton.
No, they were...
Heroic, getting out of an unjust system.
And the dollars are refugees from ridiculously high-tax, hyper-regulated, controlled environments.
So, yeah, you've got to look at money as refugees fleeing giant combine harvests of state power.
Money in America, in particular, other places, is a refugee, although with less rape, which is always a plus.
So let's look at the big picture.
That's why you come here, right?
Not to listen to me recite money.
Government controls money and government creates money and government controls interest rates.
Now, when the government starts to control money, the rich people get cheap money, right?
Because it goes into the banks and it goes into the financial companies and they get cheap loans.
So the rich get cheap money and through that they buy rental properties and things that pay dividends and so on.
Everyone who's not rich, when the government starts controlling money and interest rates, ends up having to rent or buy the properties of rich people that they bought with cheap money.
And they have to pay high interest rates.
Once you have assets, you really don't need to borrow, but you will buy things that other people have to pay interest or rent on, and that sucks money to the top of the pyramid.
The problem is government control of currency, not the...
Not the fact that rich people like to save money.
Again, the rich people are a distraction and they like to be a distraction because, well, I'll get to that in a second.
It's not accidental, I would say, that as America is moving up in the ranks of companies that offer really great tax havens overseas...
That this heavily financial corporate invested in and I would say relatively controlled bunch of journalists is destroying competition for American tax havens.
Rothschilds, of course, you may have heard of that from a few internet posts.
It's a centuries-old European financial institution.
They have recently opened a trust company in Reno, Nevada.
And they're moving the fortunes of a lot of their wealthy clients overseas.
They're moving them out of places like Bermuda, which are subject to new international disclosure requirements, and into these trusts run by the Rothschilds in Nevada.
They are exempt from international disclosure requirements.
So the fact that companies which are funding these journalists are directly benefiting from the journalists destroying competition for their business models...
It's maybe not fully up and up.
It's a great business opportunity at the moment, what's happening, because you can say, look, those foreign tax havens, they're dangerous, there's data leaks, but we're secure and we're strong and so on.
There was a presentation given by a person named Penny who works for Rothschilds in San Francisco recently.
He wrote that the U.S., quote, is effectively the biggest tax haven in the world.
The US, he added, and then he later took it out from his prepared remarks, lacks, quote, the resources to enforce foreign tax laws and has little appetite to do so.
So, what is really going on?
Well, I would argue this.
This is just a hypothesis.
I think there's evidence, but there's certainly no proof.
Okay, so this is leftist class baiting, right, to get the poor and the middle class to resent the rich.
Why?
Because then the poor and the middle class start clamoring for more controls, more regulations.
Ah, do you remember the financial crash of 2008 was somehow magically caused by a lack of regulation, even though regulations went up substantially under Bush.
So they're going to call for more controls, more regulations for this kind of activity.
Now, rich people, rich corporations, financial companies love this stuff.
Why?
Because the government doesn't write the regulations.
Who writes the regulations that control the financial industry?
Rich, powerful, politically connected and wealthy financial companies.
They are the ones who write the regulations.
And do they write those regulations to benefit their competitors, to benefit smaller companies?
Why, in fact, they do not.
Being a financial company, a big financial company in the U.S. is fantastic, which is why smaller financial companies that don't get giant bailouts tend to be absorbed by larger financial companies, creating more and more of a government-sponsored cartel regulatory moat-enclosed monopoly series.
They love these big things.
It's called regulatory capture.
You stimulate demand for regulation and then you move your people into the government to control which regulations get passed.
And you use those regulations to enhance your own ability to control the market and to destroy or cripple or undercut competitors who usually don't have the giant legal departments that big corporations have in order to comply with regulations that they end up selling out, going out of business, in which case you scoop out their clients, or...
They will sell to you because they simply need access to your legal department because it's pretty terrifying operating in a regulatory environment which looks like half the library of Alexander but in which you end up burning into flames.
So, of course, standard race baiting.
Oh, the rich are getting away.
Leftists love that and big corporations love that because it promotes resentment against the rich.
You try and control the rich.
The rich, by controlling government, end up controlling you.
And they get to keep their profits if they do well in the stock market.
And if they fail, say, to...
Well, they get hundreds of billions of dollars of bailout money anyway.
So it's a rigged game.
This is part of the rigged game, I would argue.
And that's pretty much all you need to know.
Except for this.
Yes, the powers that be are going to try and get us to fight each other.
