Putting Tax Collectors Out Of Work
Posted at 7:37pm on Mar. 1, 2008 In Praise Of Tax Havens
By Pejman Yousefzadeh
Yes, yes, I know; tax havens are a resource for the rich and a terribly unethical way of getting out of paying taxes, which we should all actually enjoy because giving lots and lots of our hard earned income to the State is the most delightful activity imagined by the human mind. Or something like that, according to the conventional talking points we are all supposed to spout in Pavlovian fashion.
Dan Mitchell--that fiendish, mischievous heretic--offers a different view, one that is likely to wreck the next bien pensant cocktail party if a guest there actually has the nerve to speak well of Mitchell's writings:
The German government's purchase of data stolen from a Liechtenstein bank has reinvigorated longstanding debates about privacy, law enforcement and international relations. Much of the fallout has followed predictable patterns. Some argue that Germany's richest citizens should be brought to justice for failing to comply with the tax laws, while others point out that it is unseemly for a nation to spy on a peaceful neighbor.
The conflict between Germany and Liechtenstein also has triggered a broader debate about tax competition and the role of so-called tax havens. The Paris-based Organization for Economic Cooperation and Development is trying to use the imbroglio to resuscitate its initiative against tax competition. Willem Buiter, a professor at the London School of Economics, is using the issue to push an even more radical agenda: the forcible annexation -- by nations like Austria and France, under some unknown authority -- of jurisdictions such as Liechtenstein, Andorra and Monaco.
At best, these crusades against tax havens are misguided. At worst, they are an effort to create a tax cartel for the benefit of high-tax nations. This OPEC for politicians would mean higher tax rates for everyone and bigger government.
Wealthy tax evaders may not be sympathetic figures, especially to those of us who meekly comply with the law. But low-tax jurisdictions serve a valuable role in the world economy. Simply stated, they keep other governments honest. Globalization makes it easier for labor and capital to cross national borders, forcing governments to improve tax policy to keep the geese with the golden eggs from flying away.
The chutzpah! How dare Mitchell actually interfere with the sacred and holy mission of the exceedingly zealous tax collector with something as nettlesome, annoying, inconvenient and absurd as actual facts? How dare he seek to overturn the conventional wisdom? How could he be so unkind? After all, the State is your friend. Surely, you can give it your money.
We'd all better be careful. If the kind of critical thinking exercised by Mitchell catches on, we might end up actually implementing intelligent policies.
And boy, won't the Heavens fall when that happens.
Posted in Economy | Putting Tax Collectors Out Of Work | Tax Havens | Tax Policy — Comments (15)/ Email this page » / Read More »
