All of us want to minimize our taxes. Recently leaked documents dubbed the Paradise Papers offer insight into the elaborate strategies employed by very wealthy individuals to reduce their tax burden.
Names that have surfaced in the massive data leak released by the International Consortium of Investigative Journalists include Secretary of Commerce Wilbur Ross, George Soros, Penny Pritzker, Madonna and Microsoft co-founder Paul Allen. Also, corporations like Apple.
Samuel Brunson, a professor of tax law at Loyola University Chicago, says these strategies, for the most part, appear to be legal. But there is a risk. “By putting money in these tax havens, by giving a respectable reason for it to be there, you give cover for people who are doing it for less respectable reasons,” he said.
The leak came largely from a Bermuda-based law firm, Appleby, which advises on these strategies. And there is a reason, says Brunson, why some island nations become tax havens. “(They) have a fair amount of financial secrecy. They don’t tell anybody – governments, private parties, whose got their money there.”
The Paradise Papers also included information about nonprofits, like universities. While the strategies are legal, some have argued, they offer universities a way to not only minimize taxes, but to obscure controversial investments.
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