Obama Victory a Win for Offshore Panama Accounts
(costaricapages.com) Right or wrong, Presidential Candidate Barack Obama has a lot of wealthy folks worried. Nobody likes to have their taxes raised, particularly not corporations or fat cats. Unfortunately for the U.S. Treasury, the ultra rich and big corporations share a common secret: they both understand the benefits of being multinational.
Well-known mega corps such as Wal-Mart, Coca Cola and General Electric traverse the planet as freely as the Native Indians once roamed the Wild West. Like water, these companies are slave to economic gravity, constantly seeking the lowest wages, environmental constraints and of course, tax structures they can encounter. They lobby for free trade agreements and offshore banking incentives to that end. Who can blame them? Lowering costs is their job. Shareholders demand it.
But big businesses aren’t the only ones going “offshore” to save a buck. The mega rich practice the mantra: “work locally, bank globally”. Many of these dynasty families are household names on par with Coke: Getty, Rothschild, Rockefeller, etc. But you won’t find them listed on the Forbes richest list. Why not? Because they learned long ago how to diversify and disguise their assets, both at home and abroad. Their wealth exists in a complex (yet legal) web of offshore corporations, charitable trusts and other vehicles that take every advantage of legal loopholes in the tax structure. The assets are theirs, yet…not.
These tactics spell bad news for the U.S. Treasury Department and Barack Obama. If elected and assuming Obama is able to effectively pursue and implement his plan to increase taxes on corporations and the wealthy elite, it will result in lower tax revenues. Big business and the ultra-rich, are too fast and too smart for slow moving politicians. Most economic experts agree that such a plan will likely will result in collecting LESS revenue. I could cite endless resources to support that, but I think that the dramatic turnaround of three nations in the past 15 years (Russia, Ireland, New Zealand) who dramatically changed their tax structure speak louder than any studies.
With so many free trade and international banking agreements in place, it is easy for individuals and corporations to move their money to low tax jurisdictions. So long as the benefits outweigh the costs and effort, many of those affected by tax increases will simply choose to play the financial shell game. And why not? If done properly, it is completely legal.
Panama is one of the world’s top offshore banking jurisdictions, so its banking and legal industries may be a beneficiary of Obama’s tax policy. Will Obama’s tax policies benefit Panama? I interviewed a few industry professionals for their opinions. Here’s what they had to say:
In conclusion, perhaps the Obama Presidency will serve to solidify Panama’s position on the growing list of nations benefiting from the shifting tide of global wealth. Oh, and one last note, Sweden..yes, SWEDEN is lowering taxes to stimulate their economy.
