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Sunday, April 17, 2016

Those Panama Papers

There are any number of perfectly good and legitimate reasons for doing business with law firms in Panama, so to even suggest that everybody with an account with such law firms are up to no good is just simply wrong. For the media to have released the names of clients of a private firm is totally irresponsible, in my view, and I imagine that there will follow some lawsuits as a result. And so there should be so!

However, just to say that a list of clients of one company encompasses politicians, government leaders, wealthy businessmen, oil sheiks, and so on from around the world suggests that these are the one percenters with a lot of something that might be worth holding in Panama away from the prying eyes of spouses and the tax man, among others.

I have been studying Panama as a place to live as a retired person. I was expecting two particular problems: the fact that there is not a national health program, and I was told that I will have to come with impeccable references in order to open a bank account. Once living there I would not be taxed by Panama on my foreign earned income, which is a real draw for me. That and the fact that it is always warm.

In fact, Panama is especially inviting to foreigners from America and Canada to retire to the country. We are made very welcome and the pace and style of life sounds ideal. Nowhere in the information about Panama is it suggested that the legal community there can remedy the problems of the rich and famous.

The thing I think most people suspect is that account holders are primarily concerned about is the evasion of taxes. Why do people seek to evade paying their lawful taxes to the government? One reason is greed. They earn money from this or that venture, including those people who actually steal money and they secret it away by either using outright evasive tactics such as arriving at the bank with a couple of suitcases, or by paying clever lawyers and accountants to find ways and means to evade the payment of taxes. T
he other principal reason is to hide assets from a spouse so that when the divorce takes place she, it's usually the she, will not be able to get her hands on half of it. You would have to hide it from both the taxman and the wife.

The irony of it all is that when you die, and you will die sooner or later, if you have hidden your assets well they will remain hidden until someone figures out a way to simply walk off with the bundle for their own benefit. Also, accountants and lawyers don't come cheaply so it was probably just as well to have paid the taxes in the first place and to have had peace of mind, except there's always the wife, but you could have avoided that by simply not having married in the first place.

Another reason that people hate paying taxes to governments is because they see corruption, incompetence, wastage of tax payers money, and in some cases, just plain theft by politicians. However, when lawful taxes aren't paid the government is denied the funds that are necessary to solve the many and ongoing social problems of the community. When those funds are made available to the government and they are wasted or stolen, both the government and the person who didn't pay his taxes have committed offenses against society.

Had I moved my application for residence in Panama further ahead it's quite possible that I might have become a client of that particular law firm and the world might now be looking at me askance as though I was trying to hide something.

How would that have made me feel?

Copyright (c) 2016
Eugene Carmichael