Taxes

Tax Havens Not Safe Havens

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wsj

Things are bad all over. Writers for The Wall Street Journal have retreated to their international gold- and lead-lined bunkers, from which they are writing articles in defense of tax havens. The usual suspects Sens. Carl Levin (D-Mich.), Bryon Dorgan (D-N.D.), and Max Baucus (D-Mont.), plus Treasury officials, are trying to snag tax money from some American companies that are incorporated and operate outside the United States. As things currently stand, these companies can defer U.S. taxes on money earned overseas until it is brought into the United States. 

This is the government equivalent of scrounging in the couch cushions for change…at someone else's house. But hey, they need the money, right? That part at least sort of makes sense, although it will discourage certain useful kinds of reinvestment in firms that function abroad and have other negative consequences for people who really need financial privacy in the face of corrupt and kleptocratic governments. But then there's this:

In addition to charges of tax evasion, some members of Congress—echoing European politicians including France's President Nicolas Sarkozy and British Prime Minister Gordon Brown—have even tried to scapegoat the low-tax jurisdictions as somehow being responsible for the global recession. They are demanding that the G-20 countries come up with action proposals against them at their meeting next month.

There are a lot of people to blame for what happened with the economy, but Switzerland's privacy regulations and Bermuda's tax policy probably shouldn't be anywhere near the top of that list.

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  1. Taxation is theft. Isn’t that an article of faith in this business-worshiping cult?

  2. Hopefully it’s all words and no action.

  3. There are a lot of people to blame for what happened with the economy, but Switzerland’s privacy regulations and Bermuda’s tax policy probably shouldn’t be anywhere near the top of that list.

    What about the Micks, with their fekkin’ predatory low tax rates?

  4. Shut the fuck up, Lefiti.

  5. The mere existence of tax havens reveals the lie of voluntary taxation for what it is: poppycock.

  6. Nice picture?

  7. Suck my dick, P Brooks.

  8. Good luck finding something that small, wrinkled and diseased, P Brooks.

  9. When I commended Epi and ed on their initiation of erotic talk day, this is not exactly what I was thinking it might morph into.

  10. So, all the big gun countries want to shake down the little guy? How come Lefiti is not outraged by this? Oh, yeah, he’s a damned hypocrite just like everyone else.

  11. The executives of these tax cheating countries should do is go to a quiet, secluded room and do the right thing.

  12. The executives of these tax cheating countries companies should do is go to a quiet, secluded room and do the right thing.

    Sorry, fixed.

  13. Tofu – define “tax cheat”.

  14. Yeah, they need more money from those evil tax dodging rich people so they can spend more on bailouts to…uh…evil tax dodging rich bankers. Huh.

  15. Tofu – define “tax cheat”.

    Apparently tax cheat means “someone who pays less taxes than I think he should”. We are all tax cheats now.

  16. Tax havens are one of the most effective breaks on excessive taxation. If a jurisdiction does something insane, it will lose more taxes by tax-flight. Given that people who immediately benefit from increased taxes have no incentive not to raise taxes as high as possible, such havens are a necessary feedback mechanism.

    It is scary to think what the world would look like if we had the equivalent of a global IRS.

  17. It is scary to think what the world would look like if we had the equivalent of a global IRS.

    We’re about to find out, Shannon.

  18. If a jurisdiction does something insane, it will lose more taxes by tax-flight

    Something insane like taxing a business at all? If they’re allowed to set up a sham headquarters offshore somewhere with no taxes, why wouldn’t they regardless of the rate imposed? They’re gonna minimize their tax burden however it is legal, aren’t they?

    I can’t set up a sham headquarters for me to evade taxes. I have to pay them. Why shouldn’t they? They benefit from our infrastructure and market.

  19. “some American companies that are incorporated and operate outside the United States.”

    If they are incorporated AND operate outside the US, in what sense are they American companies? These are usually the two legal tests of ‘citizenship’ of a corporation- if they are public, they’ll have some unknown mix of foreign and US owners at any one time. What other test is there?

  20. Tony,

    If they’re allowed to set up a sham headquarters offshore somewhere with no taxes, why wouldn’t they regardless of the rate imposed?

    In a globalized world, it becomes difficult to determine whether a corporation is “based” in one particular country or not. For example, I know of a mid-sized oil field services company that is supposedly based in Houston, Tx but they do the virtually all their work overseas. The only infrastructure they use in the U.S. is the roads to their offices. Yet, they’re taxed on the profits that they bring back into the country.

    What we should do is just do away with the distinction between companies incorporated here versus companies incorporated overseas. Then do away with corporate gains tax and substitute captial gains tax or better yet sales taxes. That way American stockholders are taxed on their earnings regardless of what they invest in and companies pay their share of government cost based on amount of business they do here.

    Problem solved. It is only archaic economic nationalism and a desire to impose regressive taxes on corporations that makes this an issue in the first place.

  21. Lefiti.
    Speaking for myself only, taxation in itself isn’t theft. There are legitimate and necessary government services (police, military, courts, roads, etc.) that couldn’t be done without some form of taxation. The problem with taxation as its currently practiced is that the level of taxation of an individual/business is completely divorced from the level of services provided to that individual/business. The principle right now is not the equitable principle of ‘pay for the cost of what you get.’ Instead, it’s the bank robber principle of ‘go where the money is.’

  22. Lefiti,
    Taxation is theft. Isn’t that an article of faith in this business-worshiping cult?

    It comes from a principled position that taking something by force is thievery. So taxation IS theft, does not matter if one worships business or the State.

  23. The executives of these tax cheating countries companies should do is go to a quiet, secluded room and do the right thing [. . .]

    . . . and send the money to another tax haven. Because that IS the right thing to do. Giving it to Il Duce is NOT the right thing.

  24. That part at least sort of makes sense, although it will discourage certain useful kinds of reinvestment in firms that function abroad and have other negative consequences for people who really need financial privacy in the face of corrupt and kleptocratic governments

    I find that a priori assumption that this statement is true pretty weak.

    Though Shannon Love provides a good example. And I agree that we should just do away with corporate taxation altogether, in return for individual income from whatever source being taxed at the same marginal rate (e.g. no cap gains preference). It also has the side benefit of disentagling non-profits from a web of regulations.

  25. Tony,
    I can’t set up a sham headquarters for me to evade taxes. I have to pay them. Why shouldn’t they? They benefit from our infrastructure and market.

    The market does not exist because of taxes, rather despite of them. And the infrastructure argument is specious at best, since the government does not allow for competing, alternative infrastructure to appear by private means.

  26. Taxation is theft. Property is theft. Apple pie is God. You’re a fucking moron, FTG

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