South Dakota, The New Cayman Islands

On October 3, 91 media outlets across 117 countries released almost three terabytes of information to the public regarding the ultra-wealthy and how they keep their money hidden. This release is known as the Pandora Papers and reveals much about the world and the secrets within America. Billionaires no longer need to go overseas to hide their money.

One of the most damning pieces of information released in the Pandora Papers was the proof that South Dakota is becoming more and more of a tax haven to the wealthy. In all, nearly 360 billion dollars are hidden in a state where over 10 percent of the people live below the poverty line. This all started as early as 1981 when the state decided to eliminate upper tax interest rates on credit cards, creating the string of corruption we see now.

The way it works involves three parties, a billionaire, their friend from South Dakota, and a relative of the billionaire. The billionaire gives his money to the friend in South Dakota, who then invests the money for another “beneficiary,” the billionaire’s friend. So legally, all three can claim to have no ownership of the funds. The billionaire can say they gave the money away to their friend, their friend can claim to have invested the money and is just looking after it, and the beneficiary can claim not to have the money because it is being run by someone else. It is a legal loophole that needs to be closed, it allows the rich to stay rich and the poor to stay poor.