The world will lose $4.7T of revenue in the next decade to tax havens

https://www.tbsnews.net/features/panorama/world-will-lose-47-trillion-revenue-next-decade-tax-havens-how-did-we-get-here

by speckx • 2 years ago

26 25 2 years ago

tbsnews.net

pjkundert• 2 years ago

Tax is for us working-class slobs.

Nobody with mobility options pays taxes.

But that’s not the problem: your betters have convinced you that they need to take 50%+ of your earnings to pay their elite friends for things you’ll never see.

And if you don’t like it, they’ll just print money (inflating your currency and thus looting your savings), and buy it anyway.

So: it’s our own fault for allowing them to force us to use their fraudulent money.

carlosjobim2• 2 years ago

Tax is for us working-class slobs.

If you are a worker, it is essential to protect any monetary assets you have in a tax haven.

The rich don't actually need tax havens that much, because most of their profits come from government subsidies or other money tricks and fakery. As a worker, you don't have access to free corruption money like them, so better protect what you have.

Tax havens are equalizers, just like people have called guns equalizers. It is much cheaper than what most people imagine to set up accounts and companies in tax havens, it is accessible for any skilled worker, unlike almost everything else that the elite gets to enjoy.

armada6514• 2 years ago

This solves nothing, just like with guns it just accelerates a race to the bottom. If no one pays taxes and everybody hoards their money just like the elite then no one is going to pay for the public services everybody needs.

armada6514• 2 years ago

This has always been the case for the history of mankind. We are no longer serfs being ruled by kings and the aristocracy, but the fundamental economic relationship hasn't changed.

The only thing that was fixed was that the upper class were forced to give the lower class civil rights and a better standard of living. However the upper class is hard at work to take those away again and make us go back to the good old days.

Once the elite start paying tax like everyone else, that's when something really fundamental has changed in human history.

sottol2• 2 years ago

Most of the (federal) tax money goes to Social Securiy + Medicare/aid, servicing interest and funding the military, probably 60-70% afair.

It's hardly "pay[ing] their elite friends for things you’ll never see"?

Arainach• 2 years ago

I'm a huge fan of paying taxes, social support networks, etc., but the military-industrial complex is very much "paying their elite friends for things you'll never see". Maybe before a sports game you'll get to see a few of the planes...

meroes• 2 years ago

The wealthy don’t pay their fair share of taxes while having the means to.

xhkkffbf4• 2 years ago

To be fair, the headline should read, "Tax receivers will get $4.7t less over the next decade and tax payers will get to keep that money." It's not like the money will be lost. It will just remain in the hands of the original earners who will, presumably, spend it according to their own desires instead of entrusting the tax receivers to spend it. Again, the money won't disappear.

oezi• 2 years ago

Since the world economy is approximately 100 trillion USD annually, it doesn't seems to be less than 0.5% of annual GDP lost to such tax evasion.

armada6514• 2 years ago

It will just remain in the hands of the original earners who will, presumably, spend it according to their own desires instead of entrusting the tax receivers to spend it. Again, the money won't disappear.

Seems like you're a believer in the trickle-down economic model? Unfortunately in most cases it will be moved to a tax haven where it joins a big pile of money that will simply never be spent on anything but the incidental super yacht or a luxury mansion on a private island. Even the government can spend the money more effectively than that.

There are exceptions of course, but we shouldn't be dependent on voluntary acts of philanthropy to get the money invested back into the country that it was already owed to in the form of tax in the first place.

endtime• 2 years ago

I don't think that was implied by the OP. OP just pointed out that "governments" and "the world" are not the same thing.

xhkkffbf4• 2 years ago

No. I'm just quibbling with the headline which implies that the money is gone. It isn't.

cj• 2 years ago

I would be interested to read an article or documentary on tax havens in general.

How did they come to be? What are the origins of "shell companies"? Why do they still exist in 2024? How is profit shifting legal and why do countries allow it?

Why do countries like Switzerland have such strict banking privacy rules? Do they do that intentionally to attract foreign money into their country?

Basically, is there another side to this coin that isn't so obvious from the outside looking in.

NoboruWataya• 2 years ago

It is kind of the accumulation of a lot of different principles that seem reasonable in isolation.

People can incorporate companies for the purpose of carrying on their business. Businesses can trade with each other. Businesses can trade with businesses in other countries. Businesses are taxed on their profits. Profits should not be taxed twice. Sovereign entities can set their own taxes and tax rules. And various other principles like these. It's when they all interact, particularly when the principles are implemented slightly differently in every country, that there is a lot of room for shenanigans.

Eddy_Viscosity2• 2 years ago

Laws are often written by lobbyists who very carefully and deliberately insert clauses (sometimes subtly, other times less so) that they know can be leveraged for huge advantages to certain parties (those paying the lobbyists).

The role of this sort of banal corruption in the creation of, and continued existence of, tax havens should not be underappreciated.

OutOfHere2• 2 years ago

The article is a very subjective take. Tax havens offer a competitive service. Other governments would do well to slash taxes too to compete well.

Governments force an unrestrained tax upon everyone via moneyprinting anyway, and the price of gold reflects it.

sottol2• 2 years ago

Except, the money is generally used to fund the basic functioning of society and benefits all citizens to a large degree somewhat equally - yea some % is lost to inefficiencies but I doubt it's > 50%.

But also, most individuals ultimately making use of these tax havens' competitive services do not choose to restrict themselves or their businesses to said tax havens only. They tend to want to live and do business in the higher tax societies with a broad middleclass to hire from and sell to, educate their children and tend to their, say, medical needs.

I understand that one can just be(come) rich and "roll one's own" replacement for government services and eventually it's hard to see why you would even need gov't services in the first place but there will be sore losers. Otoh, I also understand that most voters would rather skimp a little on universal health insurance here, education and infra there to have a little more money at the end of the year to lease a brand-new SUV every 3 years.

OutOfHere2• 2 years ago

individuals ultimately making use of these tax havens' competitive services

For what it's worth, there is an individual income tax that cannot be offshored in the same way.

If the government's currency were fully backed by gold and/or other commodities, meaning if they were a representation of how many troy oz of gold+commodities are held in the government vaults, then paying taxes would be a more just (as in justice) activity. That's because the holdings wouldn't then lose value so rapidly. Currently the backing is in large part faith based, and there isn't very much faith left. The worth of the gold held by the US is $666 billion at $2550 per troy oz, whereas the unfunded liabilities of the US are at $218 trillion.

replacement for government services

Very many of the government provided services are explicitly paid for anyway. There are massive property taxes and school taxes, sales taxes, electricity usage taxes, fuel and registration taxes, even garbage pickup fees in some locations, and local income taxes. The government is not providing very many services for free, although yes, I admit that some services like Medicare can be free which is a relief. Overall, I don't think the people are getting very good value for their total tax burden which exceeds 99% if you compound everything correctly.

katzinsky• 2 years ago

the money is generally used to fund the basic functioning of society and benefits all citizens

That's a very bold claim. I think in most developed countries almost the opposite has been happening. In the US it's been going toward "defense" companies and foreign countries as well as mass hordes of foreigners who hate us but like the free money.

Maybe half of the tax revenue goes to maintain infrastructure and to help old/poor people who didn't immigrate here survive.

freefaler• 2 years ago

Indeed... OutOfHere is correct competition is good for efficiency.

With bad governance all the money in the world won't produce efficient public services. A lot of the debate has been "we need more", and not "how you spend it"?

With a lot of information technology available the government spending data should be combed through and the bad decisions should lead to firing and jail time for corrupt officials.

The world will lose $4.7T of revenue in the next decade to tax havens

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