The Panama Papers may be the defining story of the 2016 Democratic Primary. And Bernie Sanders is on the right side of history.
The 11.5 million documents, which came from Panamanian law firm Mossack Fonseca and were leaked to the International Consortium of Investigative Journalists (ICIJ), expose how the upper end of the 1 percent utilizes shell companies and gray areas in tax law to stash untold billions of dollars in overseas tax-free accounts. The leak was so massive, it took an army of 400 journalists working for an entire year to sift through the documents. At least 140 world leaders from 50 different countrieswere implicated in the leaks.
Bernie Sanders saw this coming from a mile away. On October 12, 2011, Sen. Sanders took the Senate floor to denounce the Panama trade pact, shooting down the conventional arguments in favor of the deal.
“Panama’s entire economic output is only $26.7 billion per year, or about two-tenths of one percent of the US economy,” Sanders said at the beginning of his speech. “No one can legitimately claim that approving this free trade agreement will significantly increase American jobs.”
Then, Sanders warned of the widespread corruption that would follow should the pact become official.
“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. The Panama free trade agreement will make this bad situation much worse. Each and every year, the wealthiest people in this country and the largest corporations evade about $100 billion in taxes through abusive and illegal offshore tax havens in Panama and in other countries.”
As Secretary of State, Hillary Clinton was on the complete opposite side of the issue. In an official statement issued by the US Department of State on October 13, 2011 (one day after Sanders’ floor address), Clinton congratulated President Obama for passing the trade pact, citing the very same job creation arguments Sen. Sanders shot down a day earlier. Clinton made no mention of Panama’s reputation as a tax haven, and even invoked “working families” in her statement:
“These initiatives are the leading edge of a job-creating trade agenda that will open markets, level the playing field for our businesses and workers, and champion America’s working families in an age of tough global competition. They deserve the historic and widespread support they received in Congress tonight. We will continue our work to rebuild an American consensus on trade.”
No Americans have been named in the current leaks, as American clients have to do their tax evasion outside of the Panamanian law firm due to a taxation clause in the 2010 free trade agreement. But the editor of Süddeutsche Zeitung, the paper that initially broke the explosive story, promised American readers that they wouldn’t be disappointed.
It’s been known since 2012 that elites in the US and around the world are sitting on a gargantuan amount of tax-free assets worth at least $21 trillion. And according to James Henry of the Tax Justice Network, that number may be as high as $31 trillion. But for the sake of argument, let’s say $21 trillion. What could we fund with that?
For starters, we could give each of the approximately 600,000 homeless people across America a $650,000 home for $400 billion, amounting to just 2 percent of those offshore assets. We could provide a basic income of $10,000 a year to all 247 million Americans over age 18 for a little over than $2 trillion a year, and do that for ten years.
Obviously, not all this sum is owned by US companies, but $21 trillion is an insane amount of money. Even a portion could easily pay for all of Bernie Sanders’ proposals, from free college ($75 billion/year) to 13 million new infrastructure jobs (one-time cost of $1 trillion), to free comprehensive healthcare for every man, woman, and child ($1.38 trillion/year), to expanding Social Security ($1.2 trillion spread out over 10 years), to a youth jobs program ($5.5 billion/year). The list goes on.
The global elite embarrassed by the Panama Papers are still counting on parroting the one mantra used to forestall all hopes of a livable future: “We simply don’t have the money.” But as the Panama Papers have shown us with just one quick glimpse, this claim is bunk.
The money already exists — and it’s our money. We can organize and pressure governments to demand its return. There’s no other one-step solution to unlock the necessary resources to save our planet and species from certain disaster.
Amanda Girard is a US Uncut contributor covering politics, public policy, and social justice. She lives in Minneapolis, Minnesota. Email her at email@example.com.