Jeff  Carter

There was a study done by the Tax Justice Institute that says wealth doesn’t trickle down. What they mean by that is that wealthy people don’t keep their wealth in the country that they earn it in. The left has seized on that data. Why? Because Republican President Mitt Romney has Swiss bank accounts.

But if you think about the conclusion, wealth not trickling down, and think about the data, you will see that there is no correlation at all between the two that is meaningful.

First, look at the societies where most of the wealth has left the country and gone into tax havens. Russia, China, Turkey, Iran, Hungary, Poland, Ukraine, Kazakhstan…. If I was very wealthy, I might spirit a little money out of the country if that’s where I was a citizen too. Some have citizens where living behind the Iron Curtain was a reality. Others have systems of government that don’t value property rights and don’t have systems of law that are like the US Justice system. Government tyranny is a real worry. Don’t believe me, ask business owners that were on the wrong side of Putin. Or even the US trial lawyers.

At least if you are in the Gulag and you have a bunch of money in a Swiss or Cayman Island bank account you have some hope.

When the themes of the Tax Justice Institute are perused, it reads like a social justice manifesto.

1. We support sustainable finance for development
2. We support international co-operation on tax, regulation and crime
3. We oppose tax havens and offshore finance
4. We support transparency and we oppose corruption
5. We support a level playing field in competitive markets
6. We favour progressive and equitable taxation
7. We support corporate responsibility and accountability
8. We favour tax compliance and a culture of responsbility

This is an anti-business big government pro bureaucrat type of organization. Wonder how they feel about less government spending and smaller government? I bet not friendly.

As per usual with organizations that have an agenda, many of the items they tic off are hard to argue against. Look at number four. Who isn’t against transparency and corruption? But when you read what that actually means, it’s pretty easy to be against it.

Jeff Carter

Jeffrey Carter is an independent speculator. He has been trading since 1988. His blog site, Points and Figures was named by Minyanville as one of The 20 Most Influential Blogs in Financial Media.