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Children should not go hungry while billionaires use offshore tax havens to avoid paying their fair share of taxes - Senator Bernie Sanders

panama papers

Bernie Slams Hillary on ‘Panama Papers’—Ernest Canning

For politicians, like former Secretary of State Hillary Clinton, who touted passage of the Panama-United States Trade Promotion Agreement (Panama FTA), the emergence of what has become known as the Panama Papers could prove to be the largest political scandal since Watergate. It is a scandal that has already led to the resignation of Iceland's Prime Minister. If fully understood, the Panama Papers would no doubt generate widespread revulsion towards the ruling class, including the establishment within both the Democratic and Republican Parties. On such scandals, revolutions are born.

In 2011, as Clinton touted the virtues of the Panama FTA, Sanders, by contrast, delivered one of his many prescient speeches:

Panama is a world leader when it comes to allowing wealthy Americans and large corporations to evade US taxes by stashing their cash in offshore tax havens. And the Panama Free Trade Agreement would make this bad situation much worse.

Our country is losing up to $100 billion every year as corporations stash their money in postal addresses in the Cayman Islands, Bermuda, and in Panama. This trade agreement makes that situation even worse.

Over the years, Sanders has been remarkably prescient. For example, in 1991 as President George H.W. Bush pushed to bomb and invade Iraq during the first Gulf War, Sanders stood alone on the House floor. Against the near unanimous beat of the war drums, he cautioned that the one-sided engagement would "lay the groundwork for more and more wars to come."

As Sanders notes via a new press release, the Panama Papers reveal "that more than 214,000 entities throughout the world have been using a law firm in Panama to avoid paying taxes." The press release not only reminds us of his warning but that, as had been the case with her Iraq War vote, Hillary Clinton has been an agent of disaster.

The Panama Free Trade Agreement put a stamp of approval on Panama, a world leader when it comes to allowing the wealthy and the powerful to avoid taxes.

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I was opposed to the Panama Free Trade Agreement from day one. I predicted that the passage of this disastrous trade deal would make it easier, not harder, for the wealthy and large corporations to evade taxes by sheltering billions of dollars offshore. I wish I had been proven wrong about this, but it has now come to light that the extent of Panama’s tax avoidance scams is even worse than I had feared.

My opponent, on the other hand, opposed this trade agreement when she was running against Barack Obama for president in 2008. But when it really mattered she quickly reversed course and helped push the Panama Free Trade Agreement through Congress as Secretary of State. The results have been a disaster.

The American people are sick and tired of establishment politicians who say one thing during a campaign and do the exact opposite the day after the election.

This was not the first occasion in which Hillary Clinton impaired the function of the rule of law when it comes to tax evading offshore accounts. As I observed in The Clintons and the sordid UBS Affair, one of Hillary's first acts as Secretary of State involved her intervention with the Internal Revenue Service (IRS) on behalf of Switzerland's most powerful bank, UBS. This occurred shortly after the bank had secured a non-prosecution agreement from the U.S. Department of Justice. This involved a scheme in which the Swiss bankers had repeatedly traveled to the U.S. to solicit $20 billion from wealthy Americans who sought to park their funds in illegal tax evading offshore accounts.

The IRS wanted access to 52,000 accounts so that it could recover the unpaid taxes. UBS balked. Hillary intervened, securing an IRS agreement that prevented the tax collecting agency from gaining access to more than 91% of the illicit UBS accounts. Afterwards, UBS increased its contributions to the Clinton Foundation tenfold and paid Bill Clinton $1.5 million in speaking fees.

The problem created by these offshore accounts extends beyond lost tax revenues and damage to the rule of law.

According to Asher Edelman, aka the "Godfather of Wall Street," Bernie Sanders is the best candidate for the U.S. economy. His opinion relates to the velocity of money—the rate in which money is recycled in the economy. Consumer economies function efficiently when the rate of recycling his high; poorly when the velocity of money shrinks. This is why Seattle experienced a significant drop in unemployment after the minimum wage was raised to $15 per hour. By increasing spendable income at the low end of the economy, Seattle increased the velocity of money.

The flip side is that hoarding leads to economic stagnation. The amount of money hoarded into tax evading offshore accounts, according to Forbes, is a staggering $21 trillion. That mind boggling sum equals the combined gross domestic products of both the United States and Japan. The global economy would function far more efficiently if that $21 trillion were recycled into the economy.

The choice now before the American people is profound. We can continue on the path of extreme wealth inequality and, ultimately, crash the world's economy; perhaps endangering the survival of our species due to global climate change along the way. Or we can take the path to prosperity, fairness and the rule of law by electing Bernie Sanders.

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Ernest Canning
Veterans For Peace