December 7, 2021

The Pandora Papers Are a Political Ploy to Undermine Economic Freedom

Tax havens are not only legal, they are morally ethical.

The world was once again shaken by a journalistic investigation that exposed the private financial information of hundreds of people around the world, including artists, athletes, businessmen, and of course, also politicians and several criminals.

The exposed files called “Pandora Papers” leaked fiscal data of personalities such as singer Julio Iglesias, the technical director and ex-football player Josep Guardiola, President of Ecuador Guillermo Lasso, musicians Elton John, Shakira, Ringo Starr, Miguel Bosé, among others. The purpose of these documents is to stigmatize the freedom of movement of capital by those people who have created their wealth with honest work. These individuals have the absolute right to invest or keep their money in the jurisdiction they consider convenient to their wealth.

On the other side, the documents also reveal tax data of people with ill-gotten money — whom I will not mention in this article because it is not my task to act as a judge — however, to equate and in turn, expose the private information of artists and other people who have not committed any crime, with that of alleged criminals and/or people who have profited from corruption, exposes the bad intention with which part of this report is prepared.

A politician upon assuming public office must provide a sworn statement of his assets, there he waives the right to privacy, the same happens with people who are accused of committing tax crimes or money laundering, however, with what right does a group of journalists exposes private financial matters of people with legitimate business?

The Agenda Behind the Pandora Papers

Of course, the vast majority of the population has a rather limited knowledge about tax matters, which leads them to very easily confuse tax evasion with tax avoidance, and in turn, those who expose this information know very well that immediately the people shown in this list will be stigmatized and labeled as “criminals” by a large part of the public opinion. But of course, none of this matters, the purpose of this type of “work” is to generate the notion that a tax haven is a sin, and that investing or protecting people’s private wealth in these places is totally immoral and a crime.

In recent years, many of the developed nations, organized through the OECD and other power groups, have pushed for the implementation of harsher tax codes that punish the success of individuals, in the name of “redistribution of wealth” and the supposed “common good.” This initiative, which today has found one of its greatest advocates in the government of Joe Biden and the current Secretary of the Treasury, Janet Yellen, seeks to impose a “global corporate minimum tax“, with the intention that countries that have decided to be more austere and fiscally efficient, should be coupled to the mandates of the nations that spend more in order not to be able to attract investment and eliminate free competition.

Why Do Tax Havens Exist?

High taxes are the primary reason why so-called tax havens exist. For instance, Spain may be able to tax up to 50% of profits to businessmen in that country. These high and burdensome taxes, of course, are used to finance socialist programs—all in the name of “social justice.” This does not mean, however, that Spain is free to demand the same taxes from nations like Estonia, Andorra, Switzerland, Taiwan, or any other nation that has a basic understanding that economic freedom and incentives are the basis for economic growth and development.

Businessmen, artists, sportsmen, and anyone who has become rich — without stealing or swindling anyone — have every right to invest their money and protect their wealth as they see fit, and no journalist should feel entitled to expose their private data to the world and walk away unscathed.

If the great nations of the world, as is the case today with the United States, decide to throw themselves off a cliff and begin to asphyxiate their entrepreneurs, smaller nations need not be persuaded to follow them in such an adventure; there is the case of Ireland, one of the fastest-growing economies in the world in the last decade, thanks to its fiscal austerity policies that have allowed it to attract capital and become a center for producing technology and other products that have not only benefited its population, but also the entire world.

Evidently, the Pandora Papers are part of another attempt to delegitimize countries that have decided to impose lower tax burdens on their citizens and residents because they have understood that this is the most appropriate formula to benefit the whole society, and also those individuals who have understood the need to protect their honestly earned wealth from the hands of populist politicians who want to snatch money from private individuals to buy votes through the “redistribution of wealth.”

This is why it must be insisted, tax havens are not only legal, but morally ethical and also necessary to protect against wealth-plundering states.

This El American article was republished with permission.

This article, The Pandora Papers Are a Political Ploy to Undermine Economic Freedom, was originally published by the Foundation for Economic Education and appears here with permission.  Please support their mission.