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No, but they might only apply to Scandinavia (or high tax countries). For example: if taxes are high, the incentive to avoid more (but also evade) is clearly th
by charlesdm 9y ago
No, but they might only apply to Scandinavia (or high tax countries). For example: if taxes are high, the incentive to avoid more (but also evade) is clearly there.
Most wealthy people don't have an issue paying taxes, say 15-20% of their income (income / dividends / capital gains) -- even if that income runs in the millions. Most have an issue paying excessive taxes, e.g. 30%+, for what they get back from society.
Simple math: the higher the tax rate, the more sense it makes to avoid. And once you've set up the structures to avoid and are taking the risk, you might as well try and bring it as close to zero as possible.
For example, I recently had a friend tell me: I could buy this expensive car every three months, with the amount of tax I pay on my (passive) dividends. Why wouldn't I just move to Monaco (or some other country that doesn't tax their income excessively) and keep that money?
It might be an unpopular opinion, but in my view, he's right. As selfish as it sounds, the fact of just being allowed to live in a certain jurisdiction might not be sufficient for any wealthy person to stick around.
- heylook 9y ago> Why wouldn't I just move to Monaco (or some other country that doesn't tax their income excessively) and keep that money? They're welcome to. But they don't (or they haven't yet) because they see some benefit to staying versus the cost of leaving.
- toyg 9y ago> Most wealthy people don't have an issue paying taxes What an unsourced and biased viewpoint :) a lot of wealthy people are routinely found evading taxes even in low-tax countries. Even the likes of Luxembourg and Monaco have to go after illegal tax avoidance. Nobody likes paying tax, even at 1% people would try to skim. Egoism is a natural element of human psychology. > Why wouldn't I just move to Monaco Indeed, why? It might have something to do with Monaco being a minuscule country and their citizens being subject to more restrictions when working or investing in larger markets. This is a friction that globalization has eroded (e.g. there are no such restrictions now for Luxembourg citizens accessing the EU market, or Delaware citizens accessing the US market), which is part of the problem. If you make money from a large and well-run market, you should pay your fair share towards maintaining that market, no matter where you haul from.
- alexasmyths 9y ago"Even the likes of Luxembourg and Monaco have to go after illegal tax avoidance. " Monaco and Luxembourg are not 'low tax' countries. They are 'tax shelters' for foreigners, not for locals. And other things. But you still pay high Euro taxes, VAT and all sort of things like hidden taxes. Source: myself, ex-Monaco resident + worked and stayed in Lux.