Commerce Secretary Wilbur Ross (Reynold/Epa-Efe/Rex/Shutterstock/Reynold/Epa-Efe/Rex/Shutterstock)

The Paradise Papers — the trove of 13.4 million documents leaked largely from the files of Appleby, a Bermuda-based law firm — detail the many ways the biggest corporations and richest individuals use tax havens to avoid taxes, obscure ownership and hide financial transactions. Reporters have only just begun to comb through the documents, but two things are already clear: First, Leona Helmsley was right when she famously said, “Only the little people pay taxes.” Second, the Republican tax bills are built around a very big and shameless lie.

The revelations show once again that the very wealthy of many countries — particularly the United States — and the largest global corporations don’t pay taxes like the rest of us. They use sophisticated law firms and accountants to set up shell companies, private trusts and other dodges to avoid high taxes. Millionaires and billionaires of all ideological stripes — reactionaries like the Koch brothers and Robert Mercer, major Republican donors like Steve Wynn and Sheldon Adelson, liberal donors like George Soros and Penny Pritzker, Trump officials like Secretary of State Rex Tillerson and economic adviser Gary Cohn, Russian oligarchs like Leonid Mikhelson, celebrities like Bono and Madonna and even Queen Elizabeth II — use offshore companies, obscure ownership arrangements and elaborate trusts to avoid taxes. Global companies like Apple, Nike, Citibank, JPMorgan Chase and Uber avoid literally billions in taxes.

Accountability is a joke. Commerce Secretary Wilbur Ross misled Congress about his divestments while using a chain of Cayman Islands offshore fronts that obscured investments in Navigator Holdings, which invests in a shipping company with ties to a Russian oligarch under U.S. sanctions and with Vladi­mir Putin’s son-in law. Chief Executive Tim Cook told Congress that Apple doesn’t “stash money on a Caribbean island” even as the company was creating a new tax haven in an island in the English Channel.

The lost revenue is enormous. The largest corporations have booked an estimated $2.6 trillion — yes, trillion with a “t” — as if it were earned abroad, avoiding an estimated $752 billion in taxes. The FACT Coalition estimates that wealthy individuals avoid some $35 billion to $70 billion in taxes annually. “Little people” — largely the middle class and small businesses — are forced to make up the difference, either in higher taxes and fees or in reduced services. “Little people” drive over aged bridges and on potholed streets, take on debt to pay for college, endure aging water and sewage systems and more as the wealthy stash assets abroad to avoid high taxation.

What is unconscionable is that most of the tax dodges are legal. “Nothing here is necessarily illegal,” H. David Rosenbloom, an international tax lawyer at Caplin & Drysdale and a former senior Treasury tax official, told Bloomberg News. “There’s nothing illegal about Americans having either an offshore account or an interest in an offshore company.”

Of course there isn’t. As the wealthy and the big corporations grow ever wealthier, they spend the money needed to change the rules. It’s a much better return on investment to write the laws to fit your needs than to have to risk breaking them. The dodges work. UBS reports that the wealth of billionaires grew 17 percent in 2016, from $5.1 trillion to $6 trillion.

As Thomas Frank wrote in the Guardian, these “tax havens are not a sideshow” to the global economy; “they are a central reality.” And that reality makes a mockery of the Republican case for their tax cuts. The Institute on Taxation and Economic Policy reports that the most recent data from the IRS in 2012 shows that more than half of the foreign profits reported by all U.S. multinationals were booked in tax havens. Republicans insist that cutting taxes on the corporations and the wealthy will lead to more investment, more growth and more jobs. But the reality is that the rich and corporations already pay far less in taxes than anyone understands. There is nothing trickling down but more inequality and more burdens on the “little people.”

Not surprisingly, the Republican tax bills will foster, not shut down, tax havens. They would set up a territorial system under which it’s mostly money made in the United States that is subject to taxation. That will encourage any company that can afford an accountant and a post-office box in Bermuda to report their profits as earned abroad. In 2014, U.S.-controlled subsidiaries shamelessly reported earning profits of $96 billion in Bermuda, a country with a total GDP of $6 billion. While Republicans have called for a special tax on some companies that report excess profits abroad, the initial versions of that exempt the fossil fuel industry (e.g. the Koch brothers) and the financial services industry (e.g. Goldman Sachs and the big banks). There is also the thought of imposing a 10 percent tax rate on foreign profits going forward — providing a continued incentive to move jobs and report profits abroad, but even that is already under assault from the business lobby.

Frank Clemente, executive director of Americans for Tax Fairness, has sensibly called on Congress to investigate before it legislates. Reform should start by exposing the various scams and dodges, rousing public ire to counter the lobbying weight of big business. Legislation could focus on shutting down the loopholes and cracking down on tax havens abroad. The first step would be to end “deferral” of taxes on profits reported abroad.

Instead, Republican plans give the biggest tax cuts to the already wealthy and expand the scope for corporate tax dodging abroad. Will the Paradise Papers lead legislators to pause and investigate? Not a chance. They are pushing ahead full tilt. Not for the economy, or for President Trump’s “forgotten” people. But because, as Sen. Lindsey O. Graham (R-S.C.) candidly stated last week, “The financial contributions will stop” if tax reform fails. Americans may have voted to “drain the swamp” in 2016, but neither the Trump administration nor the Republican-led Congress got the message.

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