Picture: David Hartley/REX/Shutterstock
Picture: David Hartley/REX/Shutterstock

The Panama Papers have been dubbed the biggest leak in history, with over 11m confidential documents and 2.6 terabytes of data, pertaining to the offshore accounts of leading politicians, businessmen and celebrities.

The documents were anonymously leaked from the Panama-based law firm Mossack Fonseca, and the International Consortium of Investigative Journalists (ICIJ) are still sorting through documents that could uncover tax evasion and other criminal activities.

Technically, there is no proof that having offshore accounts automatically means you are committing tax fraud.

However, Reddit user DanGliesack has given an excellent analogy on why the leak of the Panama Papers is so important:

When you get a quarter you put it in the piggy bank. The piggy bank is on a shelf in your closet. Your mom knows this and she checks on it every once in a while, so she knows when you put more money in or spend it.

Now one day, you might decide 'I don't want mom to look at my money.' So you go over to Johnny's house with an extra piggy bank that you're going to keep in his room. You write your name on it and put it in his closet. Johnny's mom is always very busy, so she never has time to check on his piggy bank. So you can keep yours there and it will stay a secret.

Now all the kids in the neighbourhood think this is a good idea, and everyone goes to Johnny's house with extra piggy banks. Now Johnny's closet is full of piggy banks from everyone in the neighbourhood.

One day, Johnny's mom comes home and sees all the piggy banks. She gets very mad and calls everyone's parents to let them know.

Now not everyone did this for a bad reason. Eric's older brother always steals from his piggy bank, so he just wanted a better hiding spot. Timmy wanted to save up to buy his mom a birthday present without her knowing. Sammy just did it because he thought it was fun. But many kids did do it for a bad reason. Jacob was stealing people's lunch money and didn't want his parents to figure it out. Michael was stealing money from his mom's purse. Fat Bobby's parents put him on a diet, and didn't want them to figure out when he was buying candy.

Now in real life, many very important people were just caught hiding their piggy banks at Johnny's house in Panama. Today their moms all found out. Pretty soon, we'll know more about which of these important people were doing it for bad reasons and which were doing it for good reasons. But almost everyone is in trouble regardless, because it's against the rules to keep secrets no matter what.

So if someone tells you that it should hardly come as a surprise that rich people are "bending the rules" or that the Panama Papers are "no big deal", tell them that they are.

They are a massive deal.

Keep reading...Show less
Please log in or register to upvote this article
The Conversation (0)