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Rep. Bill Pascrell (D-N.J.) talks with reporters during a meeting of the House Democratic Caucus in the Capitol on April 30, 2019

Rep. Bill Pascrell (D-N.J.) talks with reporters during a meeting of the House Democratic Caucus in the Capitol on April 30, 2019. (Photo: Tom Williams/CQ Roll Call)

Top Democrat Says US Tax Havens 'A Stunning Indictment' of Policy Failures

"Do we want America to stand for fairness or to be just another spot for billionaires' buried treasure?" asked Rep. Bill Pascrell.

Kenny Stancil

During Wednesday's hearing on the Pandora Papers and Hidden Wealth, Democratic Rep. Bill Pascrell condemned the "dangerous" growth of tax shelters in the United States and insisted that lawmakers must enact reforms to ensure that the wealthy cannot avoid paying their fair share in taxes.

"The ultra-wealthy and powerful live under a different set of rules than everyone else."

"That the United States has become an international tax haven is a stunning indictment of our laws, both at the federal and state level," Pascrell (N.J.), chair of the House Ways and Means Oversight Subcommittee, said in his opening remarks. "For a long time, our country has rightly raised alarms on hidden bank accounts in Switzerland and the Caribbean. Those assets are now being hidden right here within our borders."

"We need to ask ourselves: do we want America to stand for fairness or to be just another spot for billionaires' buried treasure?" he asked.

Two months ago, the International Consortium of Investigative Journalists published the Pandora Papers, a bombshell leak of nearly 12 million financial documents exposing the offshore holdings of hundreds of billionaires, celebrities, world leaders, and public officials from dozens of countries.

"This blockbuster investigation," Pascrell noted Wednesday, "vividly demonstrates how the ultra-wealthy and powerful live under a different set of rules than everyone else. They are aided and abetted by a complex system of financial secrecy and accommodating laws that wealthy nations, including our own, created."

One of the biggest revelations of the Pandora Papers is that South Dakota has become "a leading global destination for plutocratic tax cheats" thanks to the GOP-led state's low taxes and lenient trust laws, as Common Dreams reported in October.

"South Dakota is home to a stunning 81 of the 106 trusts located in the United States," said Pascrell. "The Mount Rushmore State is home to assets of $360 billion, an amount that has quadrupled in the past decade."

"To better understand why," he said, "the Oversight Subcommittee invited the Governor of South Dakota, the Honorable Kristi Noem, a former member of the Ways and Means Committee, to testify today. Regrettably, she declined."

The Republican official's absence, however, "will not stop us from reviewing how and why the wealthy and powerful are hiding their assets in South Dakota and other states that have similarly inviting trust, asset protection, and banking secrecy laws," Pascrell stressed. "We will explore how South Dakota has become the Grand Cayman of the Great Plains."

Other U.S. states that have, in Pascrell's words, "gone out of their way to craft laws to attract hidden wealth" include Delaware, Florida, Nevada, Texas, New Hampshire, and Alaska—all of which are named in the Pandora Papers. 

Pascrell, who criticized Republicans as well as corporate Democrats for undermining progressive tax reforms, said that "we have an enormous responsibility to the hard-working families in this country to ensure that everyone, especially the wealthy and powerful, pays their fair share of taxes and abides by all laws."

A recent analysis found that the wealthiest 25 billionaires in the U.S. paid a true federal tax rate of just 3.4% between 2014 and 2018. Meanwhile, according to the Internal Revenue Service, tax evasion deprives the federal government of as much as $1 trillion or more per year, with the richest 1% of Americans alone dodging $163 billion in taxes annually.

"Letting this accumulation of hidden wealth go unchecked will only exacerbate our two-tier tax system," Pascrell said Wednesday. "I will not be complicit in further cementing a 'have and have not' economy."


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