NewsTracker Answers for week of Nov. 17, 2014

Q: A group of investigative journalists issued a report about secret deals struck by major corporations with Luxembourg that allegedly allowed them to avoid billions of dollars in taxes. Tiny Luxembourg is surrounded by Belgium, Germany and France. Where is it on this map?

Circle the area on this map

Q: Luxembourg is the world's last . . .

A. Absolute monarchy

B. UN protectorate

C. Commune

D. Grand duchy

D. The nation is  a representative democracy with a constitutional monarch. It is headed by a grand duke, and is the world's only remaining grand duchy. The former prime minister of Luxembourg is the new president of the European Union, and he is under fire over the revelations about the tax avoidance schemes.

Q: Companies such as Pepsi, IKEA, AIG and Coach have channeled hundreds of billions of dollars through the small nation and saved billions of dollars in taxes, according to the report. With about 1,600 square miles, Luxembourg is about the same size of which state?

A. Delaware

B. Rhode Island

C. New Jersey

D. Hawaii

B. Rhode Island covers 1,544 square miles and has nearly twice as many people as Luxembourg's population of about 520,000.

Q: On a per person basis, Luxembourg is the third richest nation in Europe. Which European nation has the largest gross domestic product per person?

A. Andorra

B. Jersey

C. Liechtenstein

D. Monaco

C. Worldwide, Liechtenstein ranks only behind oil-rich Qatar in per capita income, according to the CIA World Factbook. Liechtenstein and these other tiny European nations all have been named as tax havens which profit by catering to multinational corporations or wealthy individuals. Monaco, with no income tax, is the other European nation ranking ahead of Luxembourg in per capita income.

Q: All of the nations blacklisted by the European Union as tax havens are relatively small and many are islands. One island nation in the South Pacific Ocean even protects assets of the rich from other nations' lawsuits and legal claims. Which island tax haven offers this extra protection?

A. Cook Islands

B. Seychelles

C. Falkland Islands

D. Cayman Islands

A. The Cook Islands are in the South Pacific; the Seychelles are in the Indian Ocean; the Falkland Islands are in the South Atlantic; and the Cayman Islands are in the Caribbean Sea. An American lawyer wrote the Cook Islands trust laws which can hide and protect assets even of people convicted of fraud or sued for malpractice in other nations.