Pascrell Chairs Hearing on Tax Shelters in America and Hidden Wealth

Pandora Papers revealed scores of wealthy hiding their money in South Dakota, “the Grand Cayman of the Great Plains,” to avoid paying taxes

WASHINGTON, DC – U.S. Rep. Bill Pascrell, Jr. (D-NJ-09), the Chairman of the House Ways and Means Subcommittee on Oversight, today convened a hearing on the growth of tax shelters in the United States that allow the wealthy to hide their money to avoid paying their fair share in taxes.

“That the United States has become an international tax haven is a stunning indictment of our laws, both at the Federal and State level. Certain states have gone out of their way to craft laws to attract hidden wealth,” Chairman Pascrell said in opening the hearing. “For a long time, our country has rightly raised alarms on hidden bank accounts in Switzerland and the Caribbean. Those assets are now being hidden right here within our borders. We need to ask ourselves: do we want America to stand for fairness or to be just another spot for billionaires’ buried treasure?”

Chairman Pascrell invited South Dakota Governor and former Ways and Means member Kristi Noem to appear before the committee on her state’s emergence as a leading tax shelter for people trying to hide their money, but Noem refused to testify or send a representative.

As Chairman of the Oversight Subcommittee, Rep. Pascrell has made tax fairness one of his highest priorities. Pascrell is the main sponsor of the Carried Interest Fairness Act, legislation to close one of the most egregious loopholes in the federal tax code.

The full text of Chairman Pascrell’s opening remarks is below.

House Ways and Means Oversight Chairman Bill Pascrell, Jr. Opening Remarks (as prepared)

Hearing on Pandora Papers and Hidden Wealth

Good morning. Welcome to the Oversight Subcommittee’s hearing on the Pandora Papers and Hidden Wealth.

It has been over two months since the so-called Pandora Papers were released by the International Consortium of Investigative Journalists.

The Consortium reviewed nearly 12 million financial records containing information about the secret offshore holdings of 130 billionaires from 45 countries. This total includes  hundreds of politicians and public officials in 91 countries.

This blockbuster investigation vividly demonstrates how the ultra- wealthy and powerful live under a different set of rules than everyone else.  They are aided and abetted by a complex system of financial secrecy and accommodating laws that wealthy nations, including our own, created.

That the United States has become an international tax haven is a stunning indictment of our laws, both at the Federal and State level. Certain states have gone out of their way to craft laws to attract hidden wealth.

As Bruce Springsteen sings in his rock anthem Badlands, “There is trouble in the heartland.”

Among the States that loom large is South Dakota. South Dakota is home to a stunning 81 of the 106 trusts located in the United States. The Mount Rushmore State is home to assets of $360 billion, an amount that has quadrupled in the past decade.

To better understand why, the Oversight Subcommittee invited the Governor of South Dakota, the Honorable Kristi Noem, a former member of the Ways and Means Committee, to testify today. Regrettably, she declined.

But that will not stop us from reviewing how and why the wealthy and powerful are hiding their assets in South Dakota and other states that have similarly inviting trust, asset protection, and banking secrecy laws. We will explore how South Dakota has become the Grand Cayman of the Great Plains.

We have an enormous responsibility to the hard-working families in this country to ensure that everyone, especially the wealthy and powerful, pays their fair share of taxes and abides by all laws.

Letting this accumulation of hidden wealth go unchecked will only exacerbate our two-tier tax system. I will not be complicit in further cementing a “have and have not” economy.

For a long time, our country has rightly raised alarms on hidden bank accounts in Switzerland and the Caribbean. Those assets are now being hidden right here within our borders. We need to ask ourselves: do we want America to stand for fairness or to be just another spot for billionaires’ buried treasure?

Because “we will keep pushing til it’s understood,” the Subcommittee has invited several expert witnesses to help us ferret out the facts about tax havens in this country. I look forward to their thoughtful testimony.  I hope we can utilize their expertise to craft solutions to this dangerous tax haven phenomenon.

But before we hear from them, let me turn to our Ranking Member, Mr. Kelly, for his opening remarks.