Secret banking practices exposed
WASHINGTON (Nexstar) – When the rich want to hide their money, one way to do it is to open accounts in certain states in the United States.
The investigative journalism project, The Pandora Papers, shows that South Dakota, Florida, Delaware, Texas and Nevada provide tax shelters for the wealthy.
“They allow them to settle down, through their state under their laws, without revealing who the real owners are,” said Alexandra Thornton of the Center for American Progress. “If you don’t even know who owns the asset, then it’s hard to know where the money is coming from. “
Those who call for change say the secret bank doesn’t just allow the rich to dodge taxes. It could also help cover up criminal activity.
Thornton said many wealthy Americans were probably not involved in the Pandora Papers because loopholes in the U.S. tax code already allow them to legally protect most of their wealth.
If the tax rules are changed and these loopholes are closed, they will not be able to take advantage, legally, of these kinds of practices.
White House press secretary Jen Psaki said President Biden supported the reforms.
“He made it clear that he wanted to make the tax system fairer,” Psaki said.
Congress has passed the Corporate Transparency Act and, as a result, new bank transparency rules are expected later this year. But critics say these changes alone won’t solve the problem.