South Dakota: surprise tax haven in the public eye
(Greater Dakota News Service) A lack of public scrutiny may have contributed to South Dakota becoming a global leader as a tax haven, and one political expert says it's hard for locals to follow what's happening because it hasn't been part of the state's identity.
The Pandora Papers, released by the International Consortium of Investigative Journalists, said South Dakota is home to $360 billion in trusts that belong to a range of international clients. These shelters may be legal, but they're tied to some individuals accused of human-rights abuses.
"It doesn't come on their radar for some very logical reasons," he said, "and it stays out of their attention for very logical reasons."
In the poll, more than three out of four South Dakotans incorrectly cited agriculture as the state's top industry - even though the financial industry now plays a prominent role. Wiltse added that the financial policies are complex and not easy for most people to absorb. He said he doesn't have an opinion about them, but watchdogs say the findings underscore the need for regulatory reforms.
While certain state laws were modified to elevate this part of the state's financial sector, Wiltse noted that a lot of it was driven by people behind the scenes.
"The lobbyists, together with regulators and members of the executive [branch]," he said, "because they have the expertise."
The groups calling for reforms have said these high-dollar trusts allow global elites to avoid paying taxes. While that may be true compared with other types of investments, Wiltse noted that these "hidden" financial services have played a role in boosting growth for cities such as Sioux Falls.