Race to Presidency: Statements on trending issues

On April 3, the International Consortium of Investigative Journalists released 11.5 million confidential documents that exposed individual’s and companies’ connections to offshore bank accounts as a way to evade taxes. Those who invested in these offshore accounts were able to pay less taxes on income earned for their companies. According to The New York Times, approximately 215,000 offshore shell companies and more than 14,000 clients were connected to Mossack Fonseca, an offshore law firm in Panama who provided the illegal accounts, including to 143 politicians and 12 political leaders.

Among those alleged to have offshore accounts are Mauricio Macri, president of Argentina, Petro Poroshenko, president of Ukraine, Sigmundur Gunnlaugsson, prime minister of Iceland who has, since the disclosure of the documents, stepped down from his position, Nawaz Sharif, prime minister of Pakistan, King Salaman of Saudi Arabia and Lionel Messi, a member of Argentina’s soccer team, according to The New York Times.

Although presidential candidates Donald Trump, John Kasich and Ted Cruz have yet to make statements on the issue, as of April 7, the following statements were made by Democratic hopefuls Bernie Sanders and Hillary Clinton. The Current staff has provided background information on the statements made by both candidates.

  • “We now know, as a result of the Panama Papers released by an international consortium of investigative journalists, that more than 214,000 entities throughout the world have been using a law firm in Panama to avoid paying taxes…I was opposed to the Panama Free Trade Agreement from day one. I predicted that the passage of this disastrous trade deal would make it easier, not harder, for the wealthy and large corporations to evade taxes by sheltering billions of dollars offshore. I wish I had been proven wrong about this, but it has now come to light that the extent of the Panama’s tax avoidance scams is even worse than I had feared.” –Bernie Sanders, in a press release issued on berniesanders.com on April 5

In a 2011 speech on C-SPAN, Sanders stated, “It turns out that Panama is a world leader when it comes to allowing wealthy Americans and large corporations to evade U.S. taxes by stashing their cash in off-shore tax havens. And, the Panama Free Trade Agreement would make this bad situation much worse…Mr. President, the trade agreement with Panama would effectively bar the U.S. from cracking down on illegal and abusive offshore tax havens in Panama. In fact, combating tax haven abuse in Panama would be a violations of this free trade agreement, exposing the U.S. to fines from international authorities.”

The Panama Free Trade Agreement was finalized in Oct. 2012 and permits the removal of tariffs and barriers to U.S. services, according to ustr.gov. Also included are clauses about customs administration and trade facilitation, trade, government procurement, investment, telecommunications, electronics commerce, intellectual property rights and labor and environmental protection.

  • “Some of you may have just heard about these disclosures about outrageous tax havens and loopholes that super rich people across the world are exploiting in Panama and everywhere else…Now, some of this behavior is clearly against the law, and anyone who violates the law anywhere should be held accountable, but it’s also scandalous how much is actually legal. That is why, last year, I proposed a plan to shut down the so-called private tax system for the mega-wealthy.” –Hillary Clinton, in a statement released on April 6

Although the Panama Papers have demonstrated that those who created offshore accounts practiced unethical behavior, according to The Atlantic, the way in which it was conducted was not necessarily illegal. The publication reported that only some of the activity declassified by the papers will prove to be illegal, as Mossack Fonseca made sure to keep all clients on the right side of the law. The Atlantic said that by keeping the accounts barely illegal, it is most likely that those involved will escape criminal charges, as the law firm contained experts who designed their tax-avoidance strategies.

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