Panama Papers: Why Words Matter When Talking About Inequality

By Patricia Salber MD, MBA (@docweighsin)

Well, the word is out, according to the leaked documents known as the Panama Papers, the rich and famous and powerful hide their income so they don’t have to pay taxes. Oh, you knew that already? Yeah, so did I. But these documents are naming names and describing in some detail the means (some illegal) that these folks have used to avoid paying their “fair share” — they’ve been outed en masse.

Even though we have tacitly accepted, even approved of the practice of tax havens for many decades, the revelations in the Papers are likely to have serious repercussions for the prominent clients of Mossack Fonseca, the law firm from which the documents were taken. It’s noteworthy that Iceland’s Prime Minister, Sigmundur David Gunnlaugsson, has already been forced to resign because the Papers revealed that he sold his interest in an offshore company to his wife for $1 to avoid having to disclose a conflict of interest.

Now, no one really likes paying taxes and many of us do whatever we can to maximize our deductions in order to minimize our tax liability. But to me, that is different from hiding huge chunks of income in offshore tax havens so that it is not subject to the rules that govern taxation in the first place. If nothing else, the sheer scale of the…