WASHINGTON (Nexstar) — When the rich want to hide their money, one way to do it is by opening accounts in certain US states.
The investigative journalism project, The Pandora Papers, shows South Dakota, Florida, Delaware, Texas and Nevada offer tax shelters for the wealthy.
“They allow them to set up shop, through their state under their laws, without disclosing who the true owners are,” said Alexandra Thornton with the Center for American Progress. “If you don’t even know who owns the asset, then it’s difficult to find out where that money came from.”
Those calling for change say secretive banking doesn’t just allow the rich to dodge taxes. It could also allow criminal activity to be hidden.
Thornton said many wealthy Americans likely were not implicated in the Pandora Papers because loopholes in the US tax code already allow them to legally shield most of their wealth.
If the tax rules are changed and those loopholes are closed then they won’t be able to avail themselves, legally, of those kinds of practices.
White House Press Secretary Jen Psaki said President Biden supports reforms.
“He has been clear he wants to make the tax system more fair,” Psaki said.
Congress passed the Corporate Transparency Act and as a result new banking transparency rules are expected later this year. But critics say those changes alone won’t solve the problem.