The Washington Post on Sunday published its first slice of the so-called Pandora Papers, a humongous trove of 11.9 million documents laying out the ways rich people use tax havens to hide vast amounts of money and other assets. The International Consortium of Investigative Journalists has spent a year working with newspapers around the globe, including The Post, digging through the remarkable cache.
Some usual suspects, like wealthy Russian oligarchs and authoritarian rulers, make predictable cameos. The papers also feature the usual jurisdictions where we know money is regularly stashed — including Switzerland, Singapore and the British Virgin Islands. But another, far more surprising haven is also prominently mentioned: South Dakota.
The state has, at least until recently, been most famous for its dramatic Black Hills, Teddy Roosevelt and the Badlands, Mount Rushmore and Alfred Hitchcock’s “North by Northwest.” Its sparse population is spread across wide-open spaces, where talk of individualism and self-reliance is all the rage. Gov. Kristi Noem stands as a fierce defender of personal freedom and an ardent foe of mask mandates. She hosted a major maskless tribute for then-President Donald Trump in the shadow of Mount Rushmore last year and an even more maskless motorcycle rally in Sturgis.
Yes, that South Dakota.
But the reasons this state is now alleged to be a haven for (sometimes) nefarious global cash are fairly straightforward. For starters, South Dakota is a classic low-tax state. It has no income tax, no inheritance tax, no capital gains tax. The fees paid by trusts accrue to the state’s treasury. So as far as South Dakota is concerned, the more trusts the better.