By Don Hank
Is Panama a tax haven? Some Democrats think so and oppose a free trade agreement with that nation on that basis. Chief among them is John Kerry, who acquired millions in cash and real estate tax free simply by saying “I do.” There are good reasons to oppose a free trade agreement with Panama that is modelled on NAFTA, not the least of which is that NAFTA-style agreements have at their base more to do with dissolving the national sovereignty of the nations party to the agreements than they do with allowing free and unfettered trade.
Aside from the desireability of a free trade agreement, what should be made of those folks accusing Panama of charging little or no tax on foreign investments and not reporting bank account activity of foreign nationals? To start, it is worth noting that besides the United States, many countries like Germany, the UK, Japan, China and Sweden do not believe Panama is a tax haven. France and Russia have already stopped listing it as such.
Some questions arise:
1–Is it hypocritical for a large rich country that is a known tax haven to accuse a small poor country of being one and to threaten to make it poorer as a punishment?
2–Does a tax haven for the rich have more or less impact than a tax haven for the poor?