Panama Provides Corporate Tax Haven But Seeks Special Status

For many of us, it’s time to pay taxes.  Taxes owed seem like a huge hunk of dough, but when you consider how much is accomplished with tax dollars, that chunk of change seems a bit insufficient.  At times like these, one hopes that corporations are paying their share in taxes as well.

A good deal of American innovation is squandered on tax evasion.  The means of tax evasion are as diverse as the companies and individuals that create them.  One of the infamous ways that U.S. companies avoid paying their taxes is by utilizing the equatorial tax haven of Panama.

Although this country fosters an economy that depends on bank secrecy, money-laundering, and acting as a tax haven to U.S. businesses, Panama is being considered for a special financial partnership with the United States.  Congress is considering setting up a free trade agreement with Panama.

According to the U.S. Office of Management and Budget, eliminating tax evasion in tax havens overall could save U.S. taxpayers $210 billion over the coming decade,  while the Senate Committee on Homeland Security and Government Affairs estimates a savings five times as great.

Public Citizen’s Todd Tucker voices opposition to the passing of a free trade agreement with Panama: “Corporations should not have the ability to challenge U.S. anti-tax haven policies under an FTA, especially when the government of Panama is given the right under the TIEA to refuse to cooperate with U.S. information requests. President Barack Obama promised during his campaign to reform these FTA foreign investor provisions, and policymakers will be looking to see these changes made before casting a vote on any U.S.-Panama trade agreement.”