(GREATER DAKOTA NEWS SERVICE)- South Dakota has been swept up in global headlines about tax shelters, as an international reporting initiative notes the state leads the US in housing trusts.
The Pandora Papers, released by the International Consortium of Investigative Journalists, says 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.
South Dakota State University political science professor Dave Wiltse says this type of activity isn’t typically visible to the public, so most South Dakotans aren’t aware it’s happening.
“It doesn’t come on their radar for some very logical reasons, and it stays out of their attention for very logical reasons.”
While certain state laws were modified to elevate this part of the state’s financial sector, Wiltse notes a lot of it was driven by people behind the scenes.
“The lobbyists, together with regulators and members of the executive [branch], because they have the expertise.”
The groups calling for reforms say these high-dollar trusts allow global elites to avoid paying taxes. While that may be true compared to other types of investments, Wiltse notes these “hidden” financial services have played a role in boosting growth for cities like Sioux Falls.
In a poll conducted by SDSU, Wiltse says more than three out of four South Dakotans incorrectly cited agriculture as the state’s top industry when it’s the financial industry that now plays a prominent role.
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