The Hidden Wealth of Nations: Tax Havens

http://qz.com/510520/the-global-economy-has-giant-vortex-that-is-sucking-away-the-worlds-wealth-its-called-switzerland/

by SimplyUseless • 11 years ago

43 38 11 years ago

nitrogen• 11 years ago

It's weird how the article cuts off at "And after this, they became subject to the French tax law—which makes sense." and then suddenly you're reading about gaming energy ratings on TVs thanks to infinite scroll... It started out interesting, but there's no conclusion.

Gustomaximus• 11 years ago

The world needs a WTO type organisation to set minimum tax benchmarks in key areas. Then if a country wants to do an Ireland/Luxembourg etc they are welcome to but this comes with other trade/visa type restrictions. Without this it's simply going to be a race to the bottom for countries and tax rates.

Another other option is to get rid of company taxes and raise revenue purely at the personal level. Though this will only increase the cost of labor and skew the market in other negative ways.

refurb• 11 years ago

Without this it's simply going to be a race to the bottom for countries and tax rates.

I don't understand this concern about a "race to the bottom". This "race to the bottom" is why you can buy a computer for $200 that would have cost $10,000 fives years ago. Manufacturers were in a race to provide the most value for the least money.

There should be pressure on gov'ts to keep tax rates low. I consider each country as it's own business where the price is what you pay in taxes and the product are the gov't services you recieve.

Do you really wants gov'ts banding together to collude and keep tax rates high? What do you think that will look like in the end? I assume massively inefficient gov'ts and crushingly high tax rates.

digi_owl• 11 years ago

One mans consumer is anothers employee.

Races to bottom only benefit the independently wealth in the long run.

marklgr2• 11 years ago

It depends on whether you think competition is _always, indisputably_ good, and cooperation _always, indisputably_ inferior and/or suspicious.

leoedin• 11 years ago

The fundamental problem with your argument is the assumption that government services are offered in exchange for tax in the same way that you pay for other goods or services. They're not. The very nature of western society is that it doesn't offer value for money to the richest. This is by design. We've built progressive taxation systems as a way of redistributing wealth downwards, providing benefit to the whole of society rather than just the few with the most.

How many countries have you lived in? Why did you choose the place you live now? Presumably you have a spreadsheet somewhere with the tax to service ratio for all the countries you considered?

Well, maybe you do. Most people don't. Most people live in the country they were born in, or perhaps emigrate once to a country they perceive to have more opportunities (or family, or a more stable government). The only people who are shopping around for the cheapest tax regime are already exceptionally wealthy and looking to keep more of that wealth for themselves. They're not looking for any governmental services, just a way to stop paying for those that help other people.

Maybe that's OK for you if you're heartless sociopath. It's very easy to forget just how reliant we are on the hard work of other people, even those who earn far less than us.

jeffdavis4• 11 years ago

"Another other option is to get rid of company taxes and raise revenue purely at the personal level. Though this will only increase the cost of labor and skew the market in other negative ways."

I don't get why this is a problem. You can tax income from dividends, and income from capital gains -- why do you need to tax the corporation's profits, too? Those taxes all hit the same person (the investor) so why not just eliminate corporate taxes and raise capital gains and dividend taxes?

amirmc2• 11 years ago

In that case, why would anyone remove money from a corporate entity? All those who could afford it would just act through corporate avatars. I think this already happens to some degree.

raverbashing2• 11 years ago

so why not just eliminate corporate taxes and raise capital gains and dividend taxes

This doesn't make sense.

Tax corporations for their income/profit and then zero dividend taxes (since this money paid tax in the form of corporate taxes).

Capital gains is another issue entirely, while it applies to buying/selling stock it also applies to a lot of other things, so most likely it can't/won't be eliminated.

gamblor9562• 11 years ago

Double taxation is the price you pay as a shareholder for protection from liability for the corporate debts. If you don't want double taxation, you're free to choose a structure that doesn't shield you from liability (i.e., a partnership), though in the US and most of Europe you can now get the best of both worlds (liability protection and no double-taxation) though the LLC or limited company forms.

wyager• 11 years ago

Is a "race to the bottom" supposed to be a bad thing? It's called competition.

tdylan2• 11 years ago

Competition is good. We need _more_ competition between governments, not a cartel. If a government is more efficient and can lower taxes, than others are incentivised to be competitive and more efficient as well, or risk losing their revenue sources to other more efficient states.

perfunctory• 11 years ago

Competition between governments would be a good thing if we had free movement of individuals/labor. So far we only have free movement of capital.

RobertoG3• 11 years ago

It's not clear to me what a "more efficient state" is.

Is it the state that give more life quality to all their citizens?

Gys2• 11 years ago

Countries like Ireland and Luxembourg are doing pretty well. So why is it wrong what they are doing ?

Also: once there is a minimum tax level it will only go up. And there will be a lot of governments pushing for that.

What the world really need is a mechanism to prevent governments from overspending. Now there is none.

Marazan2• 11 years ago

They are doing well by leeching off other countries. If the other countries adopted the tax policies of Ireland then there would be no point in a multi national creating a sham shell corporation in Ireland.

RobertoG3• 11 years ago

"What the world really need is a mechanism to prevent governments from overspending."

If governments run a supply the private sector has to run a deficit. Mathematics don't lie.

https://en.wikipedia.org/wiki/Sectoral_balances

tsotha• 11 years ago

The world needs a WTO type organisation to set minimum tax benchmarks in key areas.

Nope. There's no reason for countries to meddle with the tax rates in their neighbors.

mahyarm• 11 years ago

If you go out of the western developed world, you'll find out that tax rates don't effectively exist in much of the developing world. Officially or unofficially. For example saudi arabia and dubai have %0 income tax for example. Not great places to live permanently for other reasons, but they exist. I don't think they will let go of their %0 income tax rates any time soon either.

Panama and the HK only tax Panama and HK source income. They are far nicer places to live. This tax nature is unlikely to change any time soon.

Switzerland has no capital gains tax on share sales. The UK has a horrible tax law called non-domiciled resident that has created the housing affordability apocalypse of london. The wealthy can just pay a flat tax of 30k pounds per year after 7 years of the status. Those 7 years before they do not pay tax on their world wide foreign income.

All of the mentioned nations above are not small micro-states that can be easily bullied, and have too many power players in their country that benefit from the status quo to allow those changes to happen. The only reason why they will change is from higher power players who would benefit from their taxation.

amirmc2• 11 years ago

I read a fascinating book on tax havens and their pernicious influence on global affairs. I thoroughly recommend it to anyone who wants to understand more about how such systems work -- especially those who don't think tax havens are an issue.

http://treasureislands.org/

The Hidden Wealth of Nations: Tax Havens

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