The revelation that the rich and wealthy are shovelling money in overseas tax havens is not a particularly surprising one. Nevertheless, the sheer scale of the huge 11.5 million document leak from Panamanian law firm Mossack Fonesca has whipped up an overdue storm and forced the issue of tax justice back on the agenda. It is likely that the Panama papers is just the tip of the iceberg, and if even more is revealed about the financial affairs of world leaders, the implication for global politics will be huge.
The Democratic presidential primaries in the US have been characterised by surging anger at the global elite. The Panama papers scandal will only fuel popular indignation at the actions of perceived establishment figures – those who have stood idly by and allowed this huge miscarriage of justice to take place.
Although there have been no major American casualties over the leak at this stage, all of the presidential candidates will be questioned about the scandal. And nobody is going to be under more pressure than Hillary Clinton. For some Americans, she is the embodiment of a “global elite”, while Bernie Sanders is its antithesis.
The huge leak exposes governments across the globe wilfully ignoring tax avoidance by the rich. Although Clinton has not been linked to any malfeasance in the leak, there is a sense that she is among the elite rich, some of whose members have benefited from such schemes.
It has been revealed pushed through the Panama Free Trade Deal at the same time that Sanders vocally opposed it, citing research warning that it would strictly limit the government’s ability to clamp down on questionable or even illegal activity. Even if the Clintons remain unmentioned in future tax bombshells, Sanders can continue to exploit the narrative that Clinton is part of the demographic responsible, and has assisted in flagrant abuses of the system through trade deals.
As this scandal looks intent on dragging on, it is now increasingly likely that undecided voters will swing towards the Sanders camp in the vital primaries coming up, including New York. In a general election, Republican favourite Donald Trump’s alleged historic tax dodging will leave him in hot water in comparison to Sanders' squeaky clean record. He is the only candidate who even speaks in terms of the 1 per cent vs the 99 per cent. Should he secure the Democratic nomination, early general election polls suggest Sanders would knock Trump out of the park.
But this more than a battle of candidates, it is a battle of ideas. Globalisation, heralded by the likes of Hillary Clinton, has enabled the richest in society to exploit the system while ordinary working people pick up the tab. This has been going on for decades; as a political family, the Clintons have done nothing about it. Hillary continues to describe her opponent’s policy platform as ‘pie in the sky’, yet corporations paying their fair share of taxes could easily fund many of Sanders’ proposals.
The longer this scandal this kept alive the more beneficial will be for Sanders. And if any more skeletons in the Clinton closet see the light, it will parachute Bernie Sanders into the White House.