Financial, Economic and Social Mood Update (December 1, 2025)
The subject of this month’s blog has to do with how corporations legally avoid paying taxes worldwide. This is the reason why so much of the wealth in the world has been literally transferred from the middle classes not just to the upper classes but specifically to the oligarchy of the small but very powerful billionaire class of about 3,000 individuals and families around the globe.
This is the highest level of what one would call estate planning – something which concerns everyone on the planet. The most basic form of an estate plan is for someone to write and sign a last will and testament. Even if someone has no financial or physical wealth this person would need a last will and testament if they have children. They would state who would raise their minor children in the event of their incapacity or death – say siblings (aunts and uncles) or parents (grandparents of the children).
The second level of estate planning which also concerns everyone (even people with little or no financial or physical wealth) is something called a living will or medical power of attorney. In the even one becomes incapacitated or one has a terminal health condition a person should state if they do or do not want to kept “artificially” alive. Most people would say “no” but in any case this is a very necessary and important decision to make.
The third level of estate planning concerns everyone with financial and physical assets. In the event of a death if one only has a last will and testament these assets will go into legal probate – a very expensive and lengthy process which eats up too much money and time and leaves legal heirs in an unfavorable predicament. A basic credit shelter trust or living trust be it revocable or irrevocable will allow these assets to be transferred to a person’s legal heirs much more quickly and with little to no monetary expense when compared to not having a trust. In the USA this basic form of credit shelter trust will protect assets valued up to USD $30 million for an individual or up to USD $60 million for a couple.
The fourth level of estate planning applies to individuals and families with a net worth beyond the limits just mentioned. These additional trusts are known as charitable trusts in the USA and are meant not just to benefit heirs above and beyond the level of USD $30 million (for an individual) or USD $60 million (for a couple) but are also meant to benefit any qualified non-profit organization of someone’s choice. Everything mentioned thus far is positive in the sense of protecting the interests of heirs, families, family businesses and charitable organizations.
Where the problem lies is in the fifth level of estate planning – the so-called offshore trusts and holding companies. Most of these legal entities are based in very small countries and dependent territories all over the globe – in small island countries such as Mauritius and the Bahamas, in micro states such as Luxembourg and Liechtenstein, in dependent territories such as the British Channel Islands and the Cayman Islands and in some larger sovereign countries including the likes of Switzerland and the Netherlands. Even within countries such as the USA there are certain states which are considered as tax havens for corporate purposes such as Delaware and South Dakota: https://en.wikipedia.org/wiki/Tax_haven.
The representative governments of every single independent country and every single dependent territory on earth must work in unison to eliminate the legal loopholes in the fifth level of estate planning. This is the reason why the vast majority of people on earth fail to benefit from the fruits of their own labor and why a small number of powerful people at the top of the economic pyramid pay so little in taxes.
The reason why offshore trusts and holding companies exist is to avoid taxation across national and other borders. This example is about Nike, the sporting equipment company legally based in the Netherlands and its Bermuda-based subsidiary which owns the rights to the Nike logo and brand: https://www.instagram.com/reels/DQJtxvljx6d/.
