What are the Paradise Papers? And why should you care?

The leak is exposing the tax avoidance measures of the super rich.
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Bermuda is one of the offshore tax havens implicated in the documents leak.

Bermuda is one of the offshore tax havens implicated in the documents leak.

Over the past 24 hours you might have come across reference to the "Paradise Papers" that has set global tongues wagging.

If you're not familiar with the term, they're the release of 13.4 million documents that have predominantly come from an offshore financial firm called Appleby.

They reveal the extreme lengths the world's ultra-rich and monolithic companies have gone to take advantage of tax loopholes, with their financial advisers making use of international offshore tax jurisdictions where they pay a fraction of what they'd owe in their home country.

The revelations have come as the result of an investigation led by the International Consortium of Investigative Journalists, with the initial findings reported by media outlets including the BBC, New York Times, and the Guardian on Sunday.

Here are a few of the things the documents have revealed:

– Apple, the richest company on Earth, has been using the Channel Island of Jersey to protect its low-tax status.

– Wilbur Ross, the commerce secretary appointed by President Donald Trump has been taking an income from a Russian company whose owners include Vladimir Putin and his son-in-law.

– Celebrities including U2 singer Bono have been linked with using foreign tax avoidance schemes.

– Companies controlled by the Russian government secretly invested in Silicon Valley startups including Facebook and Twitter.

– A top adviser and fundraiser to Canadian PM Justin Trudeau stashed millions of dollars in the Cayman Islands.

Why should I care?

We're talking tax efficiency schemes of outrageous complexity, designed deliberately to be barely comprehensible so only a select few can have knowledge of them.

It's easy to gloss over the details because of this, but the first reason you should care is that the vast majority of Minnesotans pay their taxes to the full and get hit hard with criminal action if they evade them. Nor can they afford the luxury of avoiding them.

In most cases, putting money offshore is legal, but as Al Jazeera points out it's an option that's only available to the world's richest – half of the $10 trillion estimated as being held in these offshore centers belongs to the top 0.001 percent of households.

This comes at a time when the inequality between the richest and poorest in society is as high as it's ever been, with the lower and middle classes of America suffering sluggish wage growth while the average pay for the top 1 percent has skyrocketed.

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At the same time, some regular Americans are affected by cuts in services at state and federal level as a way of balancing the books, all the while some of the country's richest firms and individuals aren't paying their full tax liabilities.

But as Al Jazeera notes, the complexity of tax avoidance can also help the rich and powerful to hide their dealings and potential law-breaking, with these offshore centers said to be rife with money launderers and kleptocrats or other corrupt government officials.

While no mention has been made of any Minnesota companies in the Paradise Papers (so far), tax avoidance has previously dogged companies including Medtronic, which in 2014 shifted its head office from the Twin Cities to Ireland for tax purposes.

As the Star Tribune reported last year, the move saved Medtronic $3 billion in taxes even though most of its executives remain based in Fridley.

It comes as the Trump administration is pushing for a cut in the corporate tax rate in the U.S. to 20 percent (it's currently 35), with the Chicago Tribune reporting President Trump is considering imposing a tax on companies' foreign profits to combat offshoring.

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