The following op-ed from the German weekly Die Preußische Allgemeine Zeitung discusses the “Panama Papers” scandal, and the difference between the penalties for tax cheating imposed on small players versus those (not) handed out to the big boys.

Many thanks to JLH for the translation:

Good Shelters, Bad Shelters

Why we are looking into Panama, of all places, why companies can keep on cheating, and how the state socks it to us.

The week in Review with Hans Heckel

April 9, 2016

In the cinema classic Arsenic and Old Lace, two charming aunties kill lonesome old men out of pure compassion. Under the pretext of renting a room, they entice the gentlemen into their house. They offer a glass of wine which has been liberally spiced with arsenic, strychnine and potassium chloride, thus bringing the poor soul “closer to God”. They have hit upon an unusual method for disposing of the bodies. They have their mentally ill nephew, Teddy, dig holes in the basement. Teddy thinks he is the expired US president, Teddy Roosevelt, and believes his labors in the basement are constructing the Panama Canal. The aunts tell him that the men have died of contagious Yellow Fever, so he hastens to put them underground.

The play — originally a success on Broadway — appeared in US movie theaters during WWII. No doubt it was intended to divert Americans from the horrors of the war.

Decades later, to our considerable indignation, we learn that thousands of well-to-do people are actually digging their own “Panama Canal” to bury their dubious tax corpses. The report of the unearthed “Panama Papers” is as poisonous to the [political] atmosphere as the old ladies’ wine was to their victims.

Here we go again. Rich people infected by Gold Fever move their loot out of the country without penalty, while revenue agents can strip us little people mercilessly. Politicians, nothing loath, are fanning the flames of our fury — like SPD vice chair, Ralf Stegner, who immediately pushed the suspicion that the “Canal money” might even be financing terrorism.

The cries of politicians in agreement should make us mistrustful. Is the drama surrounding the Panama Papers, when all is said and done, just a black comedy intended to divert us from what is truly horrifying?

Every few years we hear about some new tax shelter which concerned parties empty out with great fanfare. The USA especially makes a big show of it, as we may remember in relation to Switzerland. Strangely, nothing changes in the entire tax flight problem. There is still no legally enforceable international regulation which will permanently suppress this kind of trickery.

Perhaps that is because the Amis themselves have set up tax shelters in Delaware^[1] and elsewhere in their own territory, which energetically solicit billions from non-American investors. Under this lacy cover of “tax justice”, is there nothing more than a bare-knuckle brawl of competing shelters? At any rate, it is not only Delaware and Company that have remained unchecked. Global concerns, too, can slip their billions earned in Germany into foreign territories under the inattentive noses of our politicians, while Stegner^[2] and colleagues go off on private individuals who smuggle their money to Switzerland or Panama.

The trickery with profits makes use of quite simple devices, such as this: The company creates a subsidiary in the tax shelter. The company’s naming rights are transferred to the subsidiary. From that point on, the company must pay fees to the faux firm in the shelter in order to continue to use its trademark in Germany. The amount of the fees is negotiable and — surprise! — is exactly equal to the firm’s earnings. So the firm, on paper, earns no money. No profit, no tax. The scheme is complete.

Please, nobody tell me that there is no legal way to end this swindle. They just don’t want to. For good reason. What politician wants to be scolded as a spoilsport at the next Bilderberg meeting or at the hotel bar in Davos? And later, when official duties are over and no one is paying much attention, there is the attraction of fantastic speaker fees, which of course have nothing to do with what was done — or not done — in a political career. At any rate, it pays to be careful when skimming. Ex-Labor Minister Walter Riester made the insurance branch a fabulous gift with the Riester Retirement Plan, for which millions of insured citizens had to bleed for more than ten years, When he later became too involved in the branch he had gifted, the Anti-Corruption Group “Transparency International” cleared its throat so loudly that things became a little embarrassing for Mr. Retirement Riester.

Be that as it may…The usual local tax evaders are not met either in Davos at the Global Economic Summit or at the Bilderberg conclave. Now and then one of them may be chased through the village, so all can see that “the political system is doing something for tax justice”.

Now, the state is especially relentless when it comes to raking in taxes and fees from John. Q. Citizen, as shown in the case of Sieglinde Baumert. Because the 46-year-old Thuringian refused to pay the “democracy fee” for state broadcasting, she was thrown into jail on February 4th, as all of Germany must know by now.

Must? No, should! All Germans ought to learn from the example of this courageous woman, what is in store for them if they don’t pay the most expensive state broadcasting fee in the world. To demonstrate that it can happen to everyone — even prominent people — the bank account of the AfD politician Beatrix von Storch was impounded for refusing to pay the TV fee.

At any rate, the reaction of the public to the imprisonment of Sieglinde Baumert was not exactly as the MDR [Central German Broadcasting] had hoped. After a nation-wide storm of protest, the state broadcasting agency withdrew the request for arrest. Sieglinde Baumert was free on Monday. But the claim against her is good for thirty years, and she can be taken back into custody in three years.

The Thuringian is by no means an isolated incident. “At the deadline of December 31, 2014, 4.5 million accounts were under order of payment or attached,” a newspaper quotes Christian Greuel, “spokesman for the Subscription Communication of ARD/ZDF/German Radio”. Well, we have to leave them to it. The state broadcasters’ arts of formulation can make a minister of propaganda pale with envy. When every household — whether it has radio or TV or not (like Sieglinde Baumert) — is extorted of 17.50 euros per month, they call that the “democracy fee”. They have dubbed the collection operation “the fee service”. So when a woman is led out of her workplace by a bailiff flanked by two police officers and, on the same day, thrown into jail, do they call that “communication”?

So we’ve come to that! Will that pass as a euphemism, or is it already linguistic rape?

If the death penalty should be re-introduced in this country, these state broadcasters would find it easy to sell the draconian measure as pure empathy. For instance: It’s not about punishing the condemned person harshly. No, his caregivers want to give him a second chance, a chance at redemption. And so, tomorrow morning the executioner will bring him “nearer to God”.

Notes: