Money Laundering and Abusive Tax Havens Essay Example | Topics and Well Written Essays - 2500 words

Money Laundering and Abusive taxation Havens - Essay Example(Ethiopia Council Passes Bill on Dirty Money. USA Today. internet Available at http//content. usatoday.com /topics /topic/People/Notorious/Al+Capone. Accessed June 25, two hundred9.) Whatever receipts coming from the washing venture, even if at a loss or lesser than what he invested, would so come out clean. So, the dirty money was delivered somewhere, washed and made clean or made to await clean.Here is a kidnapper from Indonesia, for instance. Let us give him the name K. He kidnaps a spend wealthy Chinese in Macau. K gets one million dollars as ransom money in exchange of the victims freedom. One hatfulnot always carry one million dollars in bills or currency notes without bear on or difficulty. So, K deposits 300,000 dollars to the bank note of his Mistress No. 1, also 300,000 dollars to the eyeshade of his Mistress No.2, and another 300,000 dollars to the account of his Mistress No. 3. For the remaining 100,000 dollars, he keeps part of it in a minor bank account he has and part in his pocket. Bingo. The 900,000 dollars are safely placed in the custody of his paramours bank accounts. In case he needs money, he simply calls any of the ladies and gets an on-line cash credit to his superficial account.A corrupt official from Korea who receives kickback money or illegal commissions from a Japanese construction sign will not keep the bucks in Korea. What will he do He can get corporate bonds from companies based in the United States. After a while, the scandal arising from his plunder will subside. He now wants to have his cake and eat it. How will he realize his evil earnings That is actually simple and is not a problem. He will sell those U.S.-based debt certificates fast at a discount. What is the depict The illegitimate loot sums up to one million dollars, all used to buy the bonds. The subsequent bargain of the debentures generates 900,000 dollars. He losses 100,000 dollars in the p rocess, does he Yes, but what He evades the long hand of the law. He runs more or less the law. He mocks the law.Tax havens, on the other hand, are generally bona fide. These schemes to avoid taxes are sometimes support to push investments or to drive forward a good cause or crusade. A reliable event item is the tax incentive for the use of alternative energy. (Home Energy Efficiency Improvement Tax Credit. Consumer Energy Tax Incentives. U.S. Department of Energy. internet. Available http//www.energy.gov/taxbreaks.htm. Accessed June 25, 2009) Thus, if you invest in a solar energy panel, for example, you can get a tax credit of maybe 30% or the equivalent of 300 dollars. This actor that if you purchase that kind of gadget for 1,000 dollars, it is just like you only bought it for 700 dollars. Once you file the required restoration for the April 15 annual income tax deadline and your supposed tax liability is 500 dollars, you only pay 200 dollars. You are entitled to deduct the 30 0 dollars as tax credit. You are allowed to do that because you help the regime about its environment concerns