
Was it wrong to hack and leak the Panama Papers? - rgarcia
http://marginalrevolution.com/marginalrevolution/2016/04/the-morality-of-panama-papers.html
======
slg
>Yet somehow many of us approve when the victims are wealthy and higher
status, as is the case with the Panama Papers. Furthermore most of those
individuals probably did nothing illegal, but rather they were trying to
minimize their tax burden through (mostly) legal shell corporations.

This is a scary thing that has been building over the last 10 years. Wealthy
people are vilified for being wealthy even when they play by the rules. You
saw this a lot with Occupy Wall Street and you hear similar rhetoric from
Bernie Sanders supporters condemning the "donor class" and being angry at
banks for being big regardless of anything else. But these people do exactly
the same thing you and I do. I take advantage of the tax system when I deduct
education expenses. I lobby the government when I contribute to the EFF. I
want the companies I invest in to be as big and as profitable as possible. If
I had more money, those things would simply be in higher quantities. That is
the only thing most of these people are guilty of, doing the same thing we all
do but at a much higher magnitude. We can recognize that magnitude difference
is a problem and want to shrink it without resorting to vilifying people who
simply play the hand they are dealt.

~~~
cloudjacker
The analogy I use is how people go shopping in a neighboring state for lower
sales taxes, or buy a house in an inconvenient place for lower property taxes.

Wealthier people are doing the same thing.

People get angry more so because they don't get the privilege to participate
in those advantages. While simultaneously taking advantage of what they can.

~~~
bungle
Well, this picture is from Finland (a country with very small differences in
incomes):
[http://hs10.snstatic.fi/webkuva/taysi/630/1460170330858?ts=5...](http://hs10.snstatic.fi/webkuva/taysi/630/1460170330858?ts=537)

Y-scale is the taxes paid

X-scale is the income

As you can see... people in middle class and lower play by the rules almost
perfectly. Now the richest don't play anymore. There are those that play by
the rules, but a lot of those that don't.

Finland has a progressive income tax.

So let's stop the bullshit that everything does it. This picture shows it
clearly that only the richest are the assholes (in meaningful way).

~~~
cloudjacker
And then there are jurisdictions that fund themselves primarily from offering
incorporation services, instead of levying an income tax at all.

The state needs to make better rules, obviously passive taxation has pitiful
compliance outcomes.

------
adriand
The difference between sharing information about ordinary people charged with
crimes and about the rich and powerful, is that the rich and powerful people
are rich and powerful. These are people who exert power over the rest of
society and therefore their business dealings - especially shady, quasi-legal
or outright illegal business dealings - are in the public interest.

The fact some random person has been charged with a DUI is not comparable with
the fact the Icelandic prime minister engaged in questionable business
practices and possibly a conflict of interest, especially from the perspective
of Iceland's citizens.

~~~
kra34
So privacy protection isn't an absolute right, more of a relative / subjective
one and the deciding authority on the subject should be the internet at large.
Weird to hear that kind of thinking on hacker news...

~~~
circlefavshape
Not unusual to hear "absolute" anything being questioned on HN

------
jessaustin
Slowly but surely, I'm coming to the position that "hacking and leaking" is
_never_ "wrong". It's a form of speech, and I'm a free speech absolutist.
Let's stipulate that some things are illegal and not "wrong", just as others
are legal and "wrong".

It's not clear to me, however, that this case actually is a hack, in the sense
that whoever released this material might have had legitimate access to it as
a part of doing business. In that case this is certainly an unethical failure
to uphold terms of contract. Who's going to enforce that contract, however?
Certainly not IRS or any other USA agency.

[EDIT:] In case it's not clear, I don't think that society in general is
ethically limited by any "poison tree" doctrine in situations like this. Once
this information is public, however it came to be so, we are free to use it as
we see fit.

~~~
gumby
> Slowly but surely, I'm coming to the position that "hacking and leaking" is
> never "wrong". It's a form of speech, and I'm a free speech absolutist.

Wow, a "free speech absolutist". How absolute? So if I am a voyeur, poke a
camera through your window and put it on the Internet that's OK per my free
speech rights? I break into your bank's website and leak all the usernames and
passwords -- I can be prosecuted for the break in but not be responsible for
the consequences of leaking the login credentials? It's OK for me to publish a
front page article claiming you're a convicted rapist, even if that's not
true?

~~~
jessaustin
"Poking a camera through your window" is "hacking" now? Wow!

Sure, I would prefer that you not do that, or indeed that you not physically
trespass in any way. A more interesting hypothetical would be for thousands of
homeowners to install a bunch of IP cameras in their homes, and for you to
hack _those_ without the benefit of physical trespass. I don't think you'd
have much of a leg to stand on if you were to publish John and Jane Doe's
humdrum bedroom activities. However, you might also witness some truly awful
shit, which I'd have no problem with your bringing to the attention of
society.

The bank example is another aspect of our bending all rational rules and
expectations in the banks' "favor". They shouldn't build such brittle systems,
and the more we coddle them the worse they get. It would be possible to
prosecute fraud without criminalizing security research.

Libel laws are most often used for the benefit of the already powerful, so
yeah getting rid of those would be an improvement.

~~~
jacalata
>. I don't think you'd have much of a leg to stand on if you were to publish
John and Jane Doe's humdrum bedroom activities.

Stand on against what? You seem to be arguing that it should be perfectly OK
to do exactly that.

------
goodcanadian
_Furthermore most of those individuals probably did nothing illegal, but
rather they were trying to minimize their tax burden through (mostly) legal
shell corporations._

I've looked into offshore banking and shell companies and the like a bit over
the years. I'm not sure why; I guess I just have a fascination with business
and finance. My conclusion has long been that, for an individual who intends
to comply with the law, there is very little benefit to these structures.
Generally, an individual can't legally lower their tax burden through the
mechanism of an offshore shell company.

The legal versions of this involve genuine corporations headquartering in a
business friendly location. They don't do it secretly, however. It is done in
the open, and the corporation's owners (the shareholders) still have to pay
their taxes on any dividends or capital gains in whatever jurisdiction they
live in. You can argue whether or not Google should be legally allowed to move
most of their income to Ireland, but that is a totally different scenario to a
single person starting a company in Panama to hold his investments. In the
United States, at least, a single shareholder company that does nothing other
than hold investments is treated as a pass through for income tax purposes.
I.e. you can't avoid taxes simply by keeping the money in the company.
Moreover, even if you could avoid the tax on the company profits, you would
still have to pay tax when your wanted to take the money out to actually spend
it.

~~~
circlefavshape
Don't you only become liable to pay the tax when you repatriate the money? So
perhaps you can spend it outside the US with impunity?

~~~
goodcanadian
You are correct that a legitimate corporation will not be taxed on the money
unless and until it is repatriated, but that doesn't help an (honest)
individual; it only helps multinational corporations.

For every country (3) where I have filed taxes, you are liable for individual
taxes as soon as you earn the income. So, in the case of a legitimate
business, as soon as you pay yourself a salary or other benefit (perhaps, buy
yourself a yacht; really, anything that is not a clear business expense). It
doesn't matter where in the world you earn the income or spend it; you are
taxed on your worldwide income.

However, to take it a step further, the IRS doesn't really recognize personal
holding companies as legitimate businesses for tax purposes. You are liable to
pay tax on any investment income as though it were personal income even if you
leave it in the company name. Again, it doesn't matter where in the world the
holding company is.

------
blainesch
> probably did nothing illegal, but rather they were trying to minimize their
> tax burden through (mostly) legal

Mostly legal and nothing illegal are contradicting.

~~~
ominous
"The internet is used for (mostly) legal purposes"

------
jacalata
I like how his comparison implies that of course everyone exposed by the
Panama papers is already under criminal investigation.

------
ttctciyf
An article by Tyler Cowen of the Mercatus Center - "the most important think
tank you've never heard of." [1]

If you're interested in the background of this interesting organization,
there's some funding information at [2].

It's maybe not that surprising that a board member of an economics outreach
effort heavily funded by Koch Industries would argue for the freedom of the
very rich to "to minimize their tax burden through (mostly) legal shell
corporations," especially considering that the Kochs were exposed doing just
this by a previous round of ICIJ published leaks. [3]

But maybe it's worth asking why such a reasonable practice, totally within the
law, would be so secret in the first place that it takes leaks like these to
make it known.

1:
[http://web.archive.org/web/20070824203256/http://gazette.gmu...](http://web.archive.org/web/20070824203256/http://gazette.gmu.edu/articles/index.php?id=5895)

2: [http://www.desmogblog.com/mercatus-
center](http://www.desmogblog.com/mercatus-center)

3: [https://www.icij.org/project/luxembourg-leaks/new-leak-
revea...](https://www.icij.org/project/luxembourg-leaks/new-leak-reveals-
luxembourg-tax-deals-disney-koch-brothers-empire)

------
Zikes
That comparison makes no sense to me. There's a world of difference between
blowing the whistle and subverting due process.

------
ianbicking
_How many of us would approve of that behavior? Keep in mind the hacker is
spreading the information not only to prosecutors but to the entire world, and
outside of any process sanctioned by the rule of law._

The Panama Papers didn't get uploaded to the internet, it was distributed to
journalists. The person who leaked the information was deferring to the
judgement of journalists to publish information in a responsible way. It's
entirely possible that there is material in the Panama Papers that is
_exactly_ what he describes, but we haven't seen it because it's not being
published.

The journalists have come up with some criteria about what's responsible here.
It might be not be the right criteria, but it does exist.

------
darkhorn
The writer assumes that the laws work and asks "Is it ethic leak this illegal
activities?". And he says that in this condition, proper way would be the
legal ways. No! The laws and legal ways do not work always, in such cases
people themselves will be the law and the prosecuters. It is like asking to
catch all ISIS members without killing them, that would be the proper law! Not
bombarding them! Don't kill ISIS, catch them and prosecute them, oh yeah what
lawfull legal world! Would you expect justige from corrupt countries and
corrupt procecuters? Revealing these corruptins is proper act and I support
these hackers.

------
awinter-py
These authors are confounding malum in se / malum prohibitum. Common error
when the law legislates the boundaries of social / economic class.

Was it wrong for rosa parks to hack the segregated bus system in montgomery?

------
deong
I think the flaw in the analogy is that we as a society have had the chance to
openly debate things like attorney-client privilege. We understand that we
have a legal system in which guilty people may enjoy protection, and we
understand the reasons for it. At the very least, the fact of the matter is
public knowledge. That's not the case for kinds of tax-avoidance and general
shadiness being revealed in the Panama Papers.

------
supercanuck
When is vigilantism morally justified? I'd argue when people need a reminder
not to take living in a civilized society for granted.

------
blueprint
It's quite simple. It's never wrong to reveal facts. It's always right to
reveal facts. It's always wrong to hide facts.

~~~
deong
I don't believe it _is_ quite that simple.

Suppose you're a gay man living in Yemen. I do not accept any definition of
"right" or morality that would compel me to disclose that information.

~~~
blueprint
I didn't stipulate _how_ to disclose it, only that the right thing is to
disclose it. I doubt you'd suggest the person should live in denial and/or not
fight for his rights in some manner. Disclosing things doesn't necessarily
include stupidly getting oneself killed by revealing them in a poor manner,
i.e. inappropriately or unskillfully. After all, that would hardly do a good
job of revealing the fact it's his right to have his own sexual preference,
wouldn't you say? The important question is how to do things, not what to do.
Given this, would you agree now?

------
cmdrfred
If the net effect was good then the action was good.

~~~
chopin
The ends justify the means? The road to hell is paved with good intentions.

~~~
cmdrfred
Platitudes like that are how intelligent people trick themselves out of doing
what is necessary.

------
Kyoushu
[https://en.wikipedia.org/wiki/Betteridge%27s_law_of_headline...](https://en.wikipedia.org/wiki/Betteridge%27s_law_of_headlines)

~~~
arkem
This is one of the least appropriate use of Betteridge's Law of Headlines.

The article starts with 'yes' and waters it down to 'maybe' and a real
discussion could be had about whether or not the ends justifies the means,
especially when it comes to criminal acts revealing dubious but legal acts.

~~~
aethertron
Agreed on the appropriateness of using Betteridge's law. MR's headline could
have instead been 'Was it RIGHT to hack and leak the Panama Papers?'

~~~
pyrale
Betteridge's law is totally appropriate : His point was that people heading an
article with a question intend to defend a position while not immediately
associating with it.

And that's totally what this article does.

~~~
bryanlarsen
This article discusses both sides of the issue, doesn't come to a firm
conclusion, and leads the reader to consider the question in their own mind.

IMO, this is one of the few articles where I believe that a rhetorical
question as a title is appropriate.

