Why You Should Care About the Paradise Papers

We’re living in the fraught era of data leak journalism. Whatever you happen to think about Julian Assange-style information drops, it sure is an interesting and disturbing time to read the news. Earlier this month, the German newspaper Süddeutsche Zeitung obtained and shared a set of 13.4 million confidential documents from offshore tax firms like Appleby and the Asiaciti Trust, which help the rich and powerful hide wealth from their home governments.

Tonight, SBS VICELAND is airing a one-hour documentary special with unique access to the investigative journalists and news organisations behind one of the biggest scoops of the year. Tune in at 8.30PM, or catch up later via SBS On Demand.

Before you watch, here’s a quick primer on what the Paradise Papers reveal about wealth and power around the world.

There’s a sunny little tropical island located in the North Atlantic called Bermuda. The water is blue, and the corporate tax rate is a nice round zero. This is where the “law firm” Appleby was founded, and since the 1890s it has been helping rich people avoid paying taxes by setting up offshore trusts for its wealthy clients.

While the majority of the Paradise leaks pertain to Appleby clients, tax havens exist throughout the Caribbean and have historically gone relatively unscrutinised. Your other big names include the Cayman Islands, and the British Virgin Islands. Switzerland and Singapore have also been identified as tax havens.

These places tend to offer legal protections for those hiding their wealth, too—making it difficult for tax authorities to chase up missing money from billionaires.

Short answer: yes. Like, evading tax in your home country is definitely against the law—the ATO will confirm this—but moving all your money to an island with a non-existent or incredibly low tax rate is not.

You will, of course, require the means to pay a firm like Appleby to handle all this. But for someone with cash to splash, it’s a small price to pay for a lifetime of unchecked wealth aggregation.

A lot of rich and powerful people, as you'd expect. Around $7.6 trillion worth of financial assets, about eight percent of the world's wealth, is kept safe from the taxation through Paradise Papers-style avoidance schemes.

As with all massive data leaks, the Paradise Papers offer hours of fun for data journalists who get to pick through the numbers to identify the names of expected and unexpected tax villains. Rich people from around the world were revealed to be using some sort of offshore financial scheme: politicians from every continent, the British Royal Family, Bono, Madonna, Jared Kushner. Multiple millionaire and billionaire Trump donors appear in the documents, as well as businesses connected to Russian state organisations.

TL;DR rich people are getting richer by never paying the tax that they both owe and can easily afford to give up, while the likes of you and I are giving up large percentages of our meagre incomes every year.

And because rich people tend to make the rules (look up the personal wealth of whoever your head of government is—chances are, they’re a fat white businessman), they’re able to get away with it. Unless something fairly dramatic happens, they’ll continue to do so.