At anti-corruption summit, U.S. told it must end its tax 'hypocrisy'

Rss@dailykos.com (meteor Blades) · Thursday, May 12, 2016, 11:20 pm

If the U.S. does not end its "hypocrisy" and hold itself to the same tax transparency standards as other nations, efforts to reform offshore secrecy will fail, leaders of the UK's overseas territories warned at the global anti-corruption summit in London on Thursday.

The comments—from leaders of the Cayman Islands, Bermuda, and the Isle of Man—came as U.S. Secretary of State John Kerry told those gathered at the summit, "Corruption, writ large, is as much of an enemy [as terrorism], because it destroys nation states, as some of the extremists we are fighting or the other challenges we face."

The summit follows a massive leak of documents known as the Panama Papers which exposed how the world's elite use offshore tax havens to hide their wealth, including British Prime Minister David Cameron, who hosted the conference.

Cayman Islands Premier Alden McLaughlin slammed states such as Delaware—where a majority of U.S.-based shell companies are situated—and said it was "time to put behind us the shades of hypocrisy that have been part and parcel of global discussion of this issue for years and years."

"So long as countries with real commitments on the world stage continue to focus on jurisdictions that are smaller in size while ignoring the larger jurisdictions, the results will be continued failure," McClaughlin said. "This is going to be a complete disaster if you insist that most places in the world have to conform to a particular standard, and you leave principally the United States and a couple of other rogue nations completely out of it. Because all the shady business is going to migrate to Delaware, Wyoming, Panama, you name it." [...]

For its part, the Obama administration last week announced new rules that would require financial institutions to verify the beneficial owners of any entity that uses the institution's services. The Treasury Department also proposed a rule that would require certain foreign-owned companies to obtain tax identity numbers from the U.S. Internal Revenue Service (IRS), which means they would have to report ownership and transaction information to the agency.

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