May 17 2011

When the trust lobbyists met comical Ali

Posted by: Nick Shaxson in: Thoughts

There is a lot of activity going on in Europe at the moment related to its Savings Tax Directive, which is an arrangement where European countries agree to share information about each others’ taxpayers, so that these countries can tax their citizens, especially their wealthiest ones, properly. The directive is full of loopholes but they’re being patched, slowly, over time, and all sorts of battles are going on about that.

There’s a well-regarded site dedicated to this thing, here, and one of its pages looks at the Society of Trust and Estate Practitioners (STEP), a group that lobbies hard and powerfully in favour of (among other things) trusts, offshore secrecy and loopholes and the like. There is a page looking at, and demolishing, STEP’s arguments against the European project, and this one caught my eye

STEP argument: Trusts are not used for tax avoidance. Their purpose is succession planning, confidentiality, family support and possibly asset protection.

Response: This is the financial equivalent of the Iraq Information Minister, comical Ali, stating on live TV at the end of the Iraqi war that Iraq had defeated the US army, whilst in the background one could see US tanks rolling onto the Euphrates river banks. The tax evasion scandals using Liechtenstein trusts and foundations went public the same month of STEP’s denials.

Just thought I’d point that out, as a bit of fun. Or at least it would be fun, if the whole damn thing weren’t so vast, so harmful, and so serious.

For those who want to know more about how trusts, and particularly offshore trusts, work – see something I wrote here.

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