I’m very worried about America’s fiscal future. Simply stated, data from several sources (BIS, OECD, and IMF) indicates that we face a future Greek-style fiscal crisis unless policy makers implement genuine entitlement reform.
Unfortunately, politicians have little incentive to control spending and reform programs if they think that higher taxes are an option.
So how do we control their appetite for more revenue? There’s no silver bullet solution, but part of the answer is that we need tax competition and tax havens. Politicians are less likely to over-tax and over-spend if they’re afraid that the geese that lay the golden eggs can fly across the border.
In other words, tax competition is a necessary but not sufficient condition to promote good policy. And that’s why I’m willing to defend tax havens, even if it requires bringing a message of liberty to traditionally hostile audiences such asreaders of the New York Times and viewers of CNN.
That’s also why I share well-written and compelling articles on the topic, such as this editorial by Pierre Bessard from Switzerland’s Liberales Institut and this column by Allister Heath of England’s City AM business newspaper.
I have a new piece to add to this collection. Professor Philip Booth and Dr Richard Wellings of the London-based Institute of Economic Affairs have produced a succinct and powerful case for tax competition and tax havens.
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