Indeed, one of the advantages of tax havens is that they help hold governments to account. They make it possible for businesses to avoid the worst excesses of government largesse and crazy tax systems – including the 39 per cent US corporation tax rate. They have other functions too: it is simply wrong to say that they have no useful purpose. It is also wrong to argue that, if only corrupt governments had more tax revenue, their people would be better served.
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Samizdata quote of the dayMay 10th, 2016 |
 15 comments to Samizdata quote of the day |
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“Yesterday, 355 economists signed a letter co-ordinated by Oxfam arguing that tax havens have “no useful purpose””
Why does Oxfam want people to pay taxes so governments can drop bombs on poor people? Wouldn’t the money better be sent to Oxfam to feed them?
From reading the article, my end assumption is that the economists who wrote the letter to which Professor Booth is responding believe in planned economies (as the majority are Italian and Spanish, and many are UN-connected, this may not be a surprise) and that therefor the shocking realisation is that economists who believe in planned economies oppose tax competition. Despite the fact that if people are obliged to pay higher taxes all economists have to agree they will produce less wealth and the actual wealth produced, not the tax paid, is what helps the population of a country. But some economists seem to have this strange belief that government income is an important figure…
Incidentally, I wonder what proportion of the world’s economists this 355 comprises. I suspect there is easily ten times that number working in UK universities alone, never mind qualified economists working in industry and banking or for think tanks or government. So this is a small number adhering to a particular view.
Rob,
I assume you mean sending the money to Oxfam will feed the Oxfam staff – not sure how much of their income now actually reaches those in need of help (remember, someone funded gathering those signatures).
This is a lot more than yet more evidence that what is taught in the universities as economics is not economics at all.
Ordinary World Government fans are rather old hat – a Federal World Assembly (a beefed up United Nations) is not in fashion now.
Instead of the “Federalists” we have the “Functionalists”.
Under the Functionalist plans countries would still look independent (flags, heads-of-state, all that jazz), but all important aspects of economic policy would be the same everywhere.
Same bank regulations, same monetary policy, same TAX RATES.
In answer to Rob’s point.
Most government spending these days is not on the military – it is on benefits and “public services”.
Private charity is evil and taking money by force (for government spending) is good.
At least according to the sort of “educated” people who control Oxfam.
355 Aston Villa supporters signed a letter co-ordinated by Tottenham Hotspur arguing that Leicester City have “no useful purpose”.
Where is the letter stating that Oxfam “serves no useful purpose”? I’d bet you could get 355 signatures on that in 10 minutes.
Laird,
I think this is where we need a friendly economist to try and organise 354 other economists to sign such a letter…
And then we could find a further 355 economists to point out that letters attempting to define useful purpose themselves serve no useful purpose?
🙂
Tax havens absolutely serve a useful purpose. Same as a “honey trap” for spies or (more recently) internet hackers.
The most important, but least reported, aspect of the Panama papers is the public exposure of corruptly-acquired assets by governing elites.
Fred, that may be the most important aspect to you, but it clearly is not the dominant theme in the media or in public discourse generally. There, the main focus is on entirely legal holdings (such as those by David Cameron’s father) which aren’t even avoiding any taxes. Governments everywhere have been successful in pushing the notion that merely holding assets in a so-called “tax haven” is inherently immoral. That’s the viewpoint which must be vigorously opposed.
I’d offer the wisdom of the great Adam Smith on this:
“People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices”.
This is true whether the trade is manufacturing, services or government.
Since governments give foreign aid to poor countries, non-government organisations serve no useful function (except fot giving jobs to the staff. Still, it does keep them off the streets!).
I quit paying attention to income tax issues back when the top 1% of income earners payed 37% of all federal income taxes. In 2014 numbers however (the last time I looked…again), the top 1% paid 45.7% percent of all income tax revenues; the bottom 80% payed 15% and the bottom 60% paid LESS than 2%. It’s NOT amazing that the loony left say that the rich don’t pay their “fair share”. (Of course they don’t. They pay far more than their share). What IS amazing however is how popular the “not paying enough” meme is and how it almost never gets refuted.
One downside of politicians is that they stive to keep the idiots happy.
Nicholas, the “purpose” of NGO’s is to give inflated, fake and even STUPID* statistics, pulled directly out of their nether regions.
(*Example: ‘(insert fake huge number or percentage here)…of raped/trafficed/dissapointed children are never reported or discovered.’ Soooo….if these crimes are never discovered or reported, how do they derive these hard numbers or percentages?)
Yeah, never mind that these orgs disagree with each other wildly on their estimates by factors of ten or or even 100.
I used to live in Thailand, where one can’t throw a rock without running into these NGO’s, which are religiously as well as politically motivated. They lie, lie, lie constantly.
I once saw a segment on 20/20 talking about child prostitution in Thailand…supposedly. They showed 10yr old film footage from Cambodia’s infamous K-11, which had been closed down 10yrs prior to that 20/20 segment. All the while pretending that it was contemporary footage from Thailand and part of their investigation. (Fake investigation). Underage prostitution is still engaged in ‘religiously’ by Chinese businessmen, (Banging a virgin once a year gives them good luck), but otherwise it’s damned near extinct today (where it used to be rampant) because of Thailand’s draconian and horrific prison system. And let’s face it, finding a 22yr old that looks 14 is not difficult. ‘Thai versions of Ariana Grande running around everywhere.
Were these drastic changes reported on 20/20? Nope. The only reason I know this is because I’ve been a frequent traveler to all of Asia for the past 25yrs. Vertually every “cultural” report on the east by the west does a disservice.
Thailover,
As we have these numerous NGOs giving all these lies and governments also indulging, why do we need both? One or the other is redundant!