Sanders Was Wrong: Panama Trade Deal Shut Down Tax Shelters
Ever since the #PanamaPapers exploded into public consciousness, many observers have waited with excitement (or trepidation) for the names of Bill and Hillary Clinton to appear somewhere in those millions of pages. So far they haven’t, and frankly I don’t expect they ever will.
Yet Bernie Sanders and his campaign nevertheless labored to tar Hillary Clinton with the offshore shelters anyway, going so far as to call her “unqualified” to be president for supporting the Panama free trade agreement (which she did as President Obama’s Secretary of State, of course).
Today’s Washington Post editorial page argues that if anything, the Panama Papers show the trade agreement improved tax transparency:
Data culled from the documents by the International Consortium of Investigative Journalists, and presented in several charts on the group’s website, show that the Panama-based law firm Mossack Fonseca, which specialized in setting up offshore accounts and shell companies for wealthy people, has been steadily reducing its activity in Panama for about a decade. As it happens, the decline began about the time the Bush administration and Panama began discussing a free-trade pact — and accelerated after the deal took effect during Mr. Obama’s first term.
Specifically, the number of offshore incorporations fell from 4,741 in 2005 to 835 in 2015. Most important, as of last year Mossack Fonseca appeared to have nearly completely ceased incorporating the least transparent form of company — known as “bearer shares” — which often don’t need to register an owner’s name.
Incidentally, last year — like every year since the trade agreement was signed — the United States marked a big trade surplus with Panama, about $7.5 billion.