After Panama Papers scandal, MN lawmaker proposes closing loopholes here

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A Minnesota lawmaker is targeting tax maneuvers in the wake of the Panama Papers scandal.

Rep. Frank Hornstein proposed a bill that would close loopholes he says some Minnesota companies use to avoid paying taxes, according to a news release.

The Minneapolis Democrat, who cites the Panama Papers (more on that below) as renewing interest in the issue, has designated 46 countries he says are used to hide profits and avoid paying taxes.

"This legislation will ensure that any Minnesota corporation with property, payroll, and sales here is paying Minnesota corporate taxes, even if they have subsidiaries in these 46 countries or territories to which they’re shifting revenue," said Hornstein in the release.

A Minnesota House Research analysis from 2010 estimated that Minnesota loses $12 to $14 million every year from companies moving their profits overseas, according to the news release.

“Shifting money around like this means fewer resources for critical state needs,” Hornstein continued. “We need to call out companies that are moving money abroad simply to avoid tax payments and ask them if they think we should have good schools, health care, and infrastructure, or if lowering standards of living in Minnesota is their intended goal.”

An additional 10 DFLers are listed as authors of the bill. There is a matching bill in the Senate as well.

What are the Panama Papers?

The Panama Papers are recently leaked documents that show many wealthy people – including global leaders and celebrities – have hidden their money in offshore accounts, the New York Times explains. While offshore accounts are not illegal, they are often used for illegal activity including tax evasion, fraud and drug trafficking.

The scandal has been dubbed the Panama Papers because the documents came from a law firm in Panama. They were originally leaked to a newspaper in Germany.

They've caused public outrage over how the world's wealthy and powerful can avoid paying taxes.

So what's in the papers?

Some of the most notable world leaders include the prime ministers of Iceland and Pakistan, the president of Ukraine, and the king of Saudi Arabia, according to the the International Consortium of Investigative Journalists, which has been investigating the 11.5 million documents.

The Prime Minister of Iceland was the first to resign, and the media is speculating which world leaders will fall next. An Irish bookmaker is actually taking bets, according to USA Today. Argentina's president is at the top of the list.

Simon Cowell, Jackie Chan and Lionel Messi are just a few of the celebrities that Fusion says are mentioned in the Panama Papers.

Although the documents identify 140 politicians from more than 50 countries, the United States is not included.

There are private businessmen with headquarters in the U.S. that have been revealed however. ZeroHedge points out a few of those Americans here, while also noting they've already been indicted for fraud or tax evasion in recent years.

However, experts have pointed to laws in Delaware, Nevada and Wyoming that make it easy for corporations to create shell companies, claiming Americans don't need to go to Panama to avoid paying taxes, the BBC says. And if they do use foreign countries for tax evasion, they choose places that speak English like Bermuda, the Cayman Islands or Singapore – not Panama.

Two of those three countries are in Hornstein's bill.

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