I like tax havens for the simple reason that we need some ways of restraining the greed of the political class.
Simply stated, if profligate politicians think that we are “captive customers,” they are much more likely to impose (even) higher tax rates (as we’ve seen in the past couple of years in Europe). But if they think that we have escape options, they’ll probably exercise some self control.
That’s why I defend nations such as Switzerland, which often are persecuted by politicians from high-tax nations.
It’s also why I defend the tax system of the United States.
Huh?!? What do I mean by that?
Well, while there are many bad things about the American tax system (including pervasive double taxation and a very uncompetitive corporate tax system), one of few redeeming features of our tax system is that we are a tax haven.
Not for Americans, of course, but it turns out we have some good rules for foreigners.
Here’s some of what was recently published by the Heartland Institute.
Some international tax experts note a big irony…in continued U.S. government pressure to compel overseas banks to give up information on Americans with bank accounts in the belief those people may be hiding money from the taxman. The irony: Much of the world considers the United States to be one of the world’s biggest tax havens. …”it’s very easy for anybody in the world today to set up, let’s say, a Delaware Corporation. You can do it online. You have to give very little information to get it up and running. And Delaware’s not alone. There are other states where you can do it as well,” said Jim Duggan, a tax, wealth and estate planning attorney with the Duggan Bertsch LLC law firm in Chicago.
Other experts agree.
Get the Market Movements in Advance: William's Edge Webinar for Wednesday, March 12th, 2014 | John Ransom