Samizdata quote of the day

“Many seem to believe that the capital based in so-called tax havens is sitting there gathering dust, like many a Saudi prince’s Lamborghini. It isn’t. For the most part, capital in offshore centres is invested around the world, fetching rates of return far in excess of bond yields and the value that most government expenditure can generate. It is unfashionable to praise tax avoidance, but ask yourself the following: would you rather corporate profits be spent on the white elephant of the day, whether HS2 or a ghost airport in Spain? Or is the money better allocated on research and development by private firms? Bear in mind that nothing illegal is going on here: we are talking about entirely legal alternative uses of capital. If capital mobility were halted, individuals and firms would have a much harder time voting with their feet against confiscatory rates of taxation such as those implemented by François Hollande. People in countries with a weak rule of law would be at the mercy of satraps and triple-digit inflation. Never mind that Meg Hillier, the surely well-meaning chairwoman of the Public Accounts Committee, is just calling for greater transparency. The reason we have banking secrecy is precisely so that persecuted groups, such as Europe’s Jews in the run-up to World War II, could take financial refuge from their persecutors.”

– Diego Zuluaga

He is writing following the latest mass data “leak” (aka theft) of offshore account data from the law firm Appleby. The saga is being dubbed “Paradise Papers” (the data comes from the Caribbean, geddit?) Here is another item in defence of offshore centres.