The Aleph Blog » Blog Archive » What to do about Tax Havens?

What to do about Tax Havens?

I’m not crazy about the idea of wealthy people and corporations avoiding taxes by creating subsidiaries with no economic function in tax havens.  Sometimes I wonder if the budgets could be balanced if we were able to eliminate the tax havens.

So, why not have a meeting of NATO of the G-20, or even the Useless United Nations, and discuss a common strategy of dealing with rogue nations/city-states that invite people and corporations to do business through them in order to avoid taxes.

One strategy could be this: use NATO to blockade these places, and tell them to end their tax-avoidance-facilitation policies, or else.

Now that ‘s a little harsh, but almost all of the tax havens with the exception of Ireland are little places that can’t defend themselves.  But maybe there is an alternative.

The coalition of the willing would go to each of the tax havens, and make a deal with them.  “If you raise your tax rates and definition of income to our levels, we will remit foreign aid to you to partially compensate you for your loss.  Remember, we can use military or economic sanctions against you — think of Iran, or North Korea.”

Why it won’t Happen

The main reason it won’t happen is that wealthy supporters of politicians will complain, and many politicians are wealthy themselves.  Sad, but true, and it will remain so until a significant nation nears default.






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Macroeconomics, public policy | RSS 2.0 |

3 Responses to What to do about Tax Havens?

  1. Crocodile Chuck says:

    David,

    Make it simple-you only need to blockade Grand Cayman (& Nassau if you want to be more thorough)

    A hair curling read:

    http://www.amazon.com/Treasure-Islands-Uncovering-Offshore-Banking/dp/0230341721

Disclaimer


David Merkel is an investment professional, and like every investment professional, he makes mistakes. David encourages you to do your own independent "due diligence" on any idea that he talks about, because he could be wrong. Nothing written here, at RealMoney, Wall Street All-Stars, or anywhere else David may write is an invitation to buy or sell any particular security; at most, David is handing out educated guesses as to what the markets may do. David is fond of saying, "The markets always find a new way to make a fool out of you," and so he encourages caution in investing. Risk control wins the game in the long run, not bold moves. Even the best strategies of the past fail, sometimes spectacularly, when you least expect it. David is not immune to that, so please understand that any past success of his will be probably be followed by failures.


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