10 ms·

Millionaires Flee Their Homelands as Tensions Rise and Taxes Bite

67 points by spking 8y ago

rectang 8y ago
> In October 2018, it released a blacklist of 21 jurisdictions, including Malta and Cyprus, that it believes are undermining international efforts to combat tax evasion. Every possible means should be brought to bear in punishing these enablers of tax evasion. Steal from the rest of us at such a scale? Prepare to feel pain.
- seibelj 8y ago
  If I donate to a nonprofit, itemize my deductions, and get a tax reduction based on my donation, am I not "evading" taxes? Sure, donations are perfectly legal and an above-board way to evade paying taxes to the USA, but it's still tax avoidance and I could choose not to itemize, especially if my donations were 100% pure of heart. Similarly, emigrating to Malta, or Bermuda, etc. is perfectly legal and if I do so for the weather, or to avoid paying taxes, is not one just as legal as the other? Even moving from New York to Texas so my combined state and city income taxes drop from 10% to 0% has a whiff of tax avoidance. Simply put, people vote with their feet, and the rich have the best shoes money can buy.
  - adventured 8y ago
    > If I donate to a nonprofit, itemize my deductions, and get a tax reduction based on my donation, am I not "evading" taxes? No. You're mixing up terms. That's avoiding taxes. There's a critical distinction in the tax world between avoiding taxes and evading taxes. One is legal and common, one can send you to prison and get you a lifetime of close IRS scrutiny. Simplified, evading means to not pay what you actually owe (what you should be paying). Avoiding means to use entirely legal means - such as deductions - to not owe the taxes in the first place. To evade taxes you always have to do something illegal. In avoiding taxes you should never break the law.
    - seibelj 8y ago
      Emigrating to lower-tax countries is not illegal. So it's not tax evasion, correct? Anything I do that is legal cannot be tax evasion?
  - sdoering 8y ago
    Well if you donate money it should, in a perfect world, be only tax deductible if it is for an effort society seems of special value so that incentives are implemented to support this. So tax deductible donations show what is important for a society at large. And society profits. Leaving a country to evade taxes doesn't help society at large. People do this after they profit of the infrastructure and all other stuff society provided and paid for with taxes.
    - seibelj 8y ago
      But nonprofits encompass a huge variety of organizations, some promoting guns (the National Rifle Association[0]) and others paying for abortions[1]. Wouldn't it be better to force everyone to pay their taxes owed, then if they are truly altruistic, donate whatever extra they want? I really don't see how tax deductions for donations aren't glorified tax evasion strategies. [0] https://www.snopes.com/fact-check/nra-tax-exempt-non-profit/ https://www.snopes.com/fact-check/nra-tax-exempt-non-profit/ [1] https://abortionfunds.org/ https://abortionfunds.org/
  - sonnyblarney 8y ago
    "donate to a nonprofit" is not 'tax evasion' (which is illegal) You could argue it's tax avoidance, but it's not even that, it's just making a donation, and that's how they are taxed. It's part of your normal activity: taxes are higher on some things than others. Creating a non-profit as a special purpose vehicle would be 'tax avoidance' but if it's legal, it's legal. The OP's comments are perfectly just i.e. punishing tax havens because there's deep incentive for them to facilitate actual tax evasion, moreover, they enable the stockpiling of surpluses generated elsewhere. Especially for those part of a 'common market' - you can't have taxes at 1% in Malta and 50% and France, it's not going to work. Dubai does not have any tax deals with the US, it's built on utterly shady tax dealings. Much of the money poured into Afghanistan by the US for reconstruction ends up there, for example. It's super duper dirty. People are not fleeing China because of 'taxation' in the classical sense, they're fleeing for a pile of other, obvious reasons. People are however fleeing France, partly due to 'taxation' and this is an issue ... they have some issues with competitively and their solution of 'just tax the rich' will not work out if that's it. Worth considering: normalize the migration data against 'regular people' and what you'll find is that still a lot of Chinese are moving to Australia/Canada, and in general people are moving there, the US anyhow! I'll bet the one that sticks out a little is France. I don't suggest a ton of people are leaving, net.
    - seibelj 8y ago
      > You could argue it's tax avoidance, but it's not even that, it's just making a donation, and that's how they are taxed. It's part of your normal activity: taxes are higher on some things than others. Right, but if it's perfectly legal to emigrate to a lower-tax jurisdiction, is that not "part of normal activity"? I think there's an argument to remove the tax deduction for donations. If you are doing it altruistically, then you still owe your fair share to the government, no?
  - kartan 8y ago
    > Simply put, people vote with their feet, and the rich have the best shoes money can buy. I have been on vacations on Malta. It is a nice place for a vacation, but it is not the most interesting place in the world to live in. Rich people are rich because they have access to luxury items, health care, transportations systems, etc. For all that to exist a complex society is needed where citizens have education, transport, health care, food safety, clean water, rule of law... and all that costs money, a lot of it. If rich people leave that society, how rich are they? How easy is to just tax the business that produces wealth? Malta, as a nice place as it is, cannot produce super-rich people. Is Malta decides to isolate itself it just becomes an inhabitable rock in the middle of the Mediterranean. The same goes for more tax havens. Rich people will vote with their feet, but the economy will not care. Taxes are needed to generate any wealth independently of the tantrum of a few rich people.
    - floatingatoll 8y ago
      In a just world, the 100 countries signed on to the information sharing agreement would embargo travel to and from Malta and other countries that support evasion, with passport seizures at the border when their citizens enter with Malta passport stamp pending the outcome of a criminal investigation into their reason for visiting.
      - Zarath 8y ago
        Sounds like a great world!
        floatingatoll 8y ago
        I hope someday to be befriended by a wealthy person, so that I can better empathize with the trauma that such a policy would inflict on them, but I am poor because I funded someone’s book and have never known anyone rich enough to care about avoiding taxes. Perhaps someday I will have such a friend, but not today. Based on your reaction, I envy you that :(
    - kgwgk 8y ago
      > [Malta] it is not the most interesting place in the world to live in. Rich people are rich because they have access to [...] If rich people leave that society, how rich are they? So you want to prevent rich people from moving to low-tax jurisdictions for their own good? How kind of you!
  - solidsnack9000 8y ago
    At a high level, what makes tax evasion wrong is when people are able to benefit from the commons — stable currency, weights and measures, a climate of rule of law and the commensurate security of property — without paying into it. People who have successful businesses and are worth millions of dollars would be robbed and cheated every single day if it were not for the vast array of institutions — expensive institutions — that facilitate the climate of trust and security characteristic of developed countries today.
    - seibelj 8y ago
      The majority of us would agree that 100% taxation is unworkable, as in, every single cent of income I earn is seized by the state. Given your comment, I assume you think 0% taxation is also infeasible. So we agree that somewhere above 0% and below 100% taxation there is some optimal amount. However, given the circumstances of the country and our personal philosophies, we may disagree on that optimal level. The fact that free people can move to lower (or higher!) tax jurisdictions, and judge the quality of those services based on how much they pay and what they get in return, is a good thing in my opinion. The competition keeps politicians from elevating taxation to that unworkable 100%.
      - techsupporter 8y ago
        > The fact that free people can move to lower (or higher!) tax jurisdictions, and judge the quality of those services based on how much they pay and what they get in return, is a good thing in my opinion. I think few would disagree that if you move to a new jurisdiction to benefit from a different tax scheme, that's fine. But therein lies two problems: First, so few people are able to move; the wealthy are disproportionally able to have their pick of tax jurisdictions so they can extract benefits from one society and then jump ship when it suits them without returning benefits to that society. Second is when people move on "paper" to benefit from another jurisdiction but don't physically move in reality. Thus they continue to benefit from the society they nominally "left" but don't pay into it. That's the kind of tax avoidance / evasion that most people have a problem with.
  - rectang 8y ago
    The passage I quoted is about evasion, not avoidance. To give a bit more context, the prior sentence speaks of "misuse". > The Organisation for Economic Co-operation & Development is scrutinizing the potential misuse of these schemes. In October 2018, it released a blacklist of 21 jurisdictions, including Malta and Cyprus, that it believes are undermining international efforts to combat tax evasion. What we're talking about here is hiding assets that are subject to taxation. Like Swiss banks did for many years.
- Solar19 8y ago
  Stealing? That would imply that someone else's money belongs to you, which by definition it does not. I think it's unethical to tax anyone's income, and if people can escape it I'm happy for them.
  - sonnyblarney 8y ago
    "I think it's unethical to tax anyone's income" Wow, more classically liberal than the man himself Adam Smith, who basically invented the concept of graduated taxation because he laid out how such systems would work and what would end up happening without it.
  - kartan 8y ago
    > I think it's unethical to tax anyone's income How will you pay for a functional society then? All these people that are rich, it is rich because they live in very complex, healthy, educated societies. That does not come from the air. How will you make sure that one person does not accumulate all world wealth? Without progressive taxation, wealth accumulates naturally as having more money makes it even easier to make even more money. How could such a system work? I would like to understand your position. Why paying for the sustain the society where you live in is unethical?
    - fit2rule 8y ago
      Tax spending, not income. Income tax is theft since it is the state usurping the will of the individual, and literally saps the agency one might have over ones progress - Expenditure tax is a better solution, since it allows the individual to maintain agency over their wealth, while also allowing the state to gain income on equal ground. Really, its time for societies to evolve beyond state-supported theft through threat of force, and grant individuals more agency over how they use their wealth. The current system is criminal.
      - zwaps 8y ago
        This means you will have a regressive taxation scheme, where poor people have to pay a larger percentage of their income as tax, and rich people a very small percentage. To be able to run a stable state that actually allows anyone to have opportunities, taxation would have to be pretty high. After all, you need well funded public schools, child services, police/emergency service and a health system at the very least - otherwise you just end up with a bisected society of rich and poor. But then you need to have a high taxation rate on expenditure (most countries have a VAT, for example, and it would not be enough by itself). So again, this smothers the poors, and they could not, for example, gain wealth themselves. Why does this imply that taxation is not theft? I think the most important argument is, that people have accumulated their wealth in either of two ways. First, they did not earn it themselves. Then, one could reasonably argue that some taxation is fair. Second, they accumulated it themselves, such as by starting a business. Then you argue that taxation is theft. However, they earned their money in the existing society. Since they were not rich, they, at that time, used all public services, education, markets and stability provided by the system, while also paying relatively little. They are rich, in part because of a consumer surplus society affords by non-regressive taxation. It is therefore fair, and and not theft, that they are to pay more of their wealth, which they gained within a beneficial system of taxation, to keep that same system stable for the next generation.
- praveenperera 8y ago
  People holding on to more of their OWN money is some how stealing "from the rest of us"?
  - kartan 8y ago
    > more of their OWN money How is it their own money if it is the state money? That is all the point. It is not their money. If I buy an apple an I do not want to give the money to the cashier because "it is my money", I am stealing.
  - rxhernandez 8y ago
    That money was very likely made off the infrastructure the rest of us contributed to.
    - praveenperera 8y ago
      That's a reasonable argument for the people still living in the states. But falls apart when it comes to FATCA. Also you could make the argument that the people rich enough take advantage of these schemes have already paid more tax than most people through other taxes.
      - esarbe 8y ago
        You could also make the argument that if they are rich enough to take advantage of these schemes, they should instead just acknowledge the fact that without the society that gave them the tools to prosper they'd be just some hairless monkeys in the middle of nowhere dying of hunger and that they are thus required to contribute their fair share to the society and community that enabled them to flourish.
  - rectang 8y ago
    The passage I quoted is specifically talking about tax evasion. As in, I pay the taxes I'm required to by law, and these people are not paying the taxes they are required to by law.
- kmlx 8y ago
  here goes an unpopular opinion: the internet made me realize the age of the “state”, and it’s inherent “divide et impera” status is coming to an end. considering how badly huge amounts of moneys are managed by states, the monopolies these entities have on taxes, and the complete failure of democracy in general (by which tiny subsets of populations choose swaths of politicians) i say let the concept of the “state” and their politicians end. let me pay “tax” to whichever construct i choose rather than forcing me to contribute to garbage states. the more the internet connects, the less “states” and “nations” will be a thing.
  - deleted 8y ago
    [deleted]
- deleted 8y ago
  [deleted]
- Mirioron 8y ago
  So, small countries should not be allowed to try to attract businesses? Only big and rich countries are allowed to do that?
- Zarath 8y ago
  Everybody knows Malta, Cyprus, US Virgin Islands, etc. are tax havens/tax evasion shelters, it is very surprising that this is surprising.
  - rectang 8y ago
    Where did you get that people are surprised? I'm not surprised. Reality is Hobbesian; violence and lawlessness is the natural state. Tax evasion is never surprising. What I'm advocating is retaliation against other countries that are facilitating criminal behavior.
    - sandwich9 8y ago
      The problem might be different competing forces of the country who would enforce these things. They might be controlled by those who put their money in these tax havens.
    - fwip 8y ago
      Violence and lawlessness are not the natural state. The majority of human societies live in peace. Uncontacted tribes never before exposed to us generally mostly live in peace together. They don't have the word "law" but they have an agreed upon set of social norms that people don't violate. Even most primates live in mostly peaceful social groups with established social norms. Hobbes erred in his assessment of the natural state of humans.
deleted 8y ago
[deleted]
jaabe 8y ago
It’s always been like that, hasn’t it? I seem to recall it being one of the reasons why liberalism has had such staying power. It was how the Dutch became a powerhouse on the line of Spain, England and France in the colonial age. Because they let their people be, and didn’t take their wealth, it became an attractive haven for rich families who then did business. I’m not sure the latter is as beneficial as it was then, as you can now turn money into more money without investing in local business, but the former is going to remain true forever. People who have the means to do so, will always chose the freer country.
- adventured 8y ago
  It's still true. Alluring taxation approaches rapidly turned Hong Kong, Singapore and Ireland into very wealthy nations. All three used very low tax systems to draw wealth and investment to their shores in various ways. Works very well for small, stable nations. It loses effectiveness with increasing population scale. The approach is better to the extent you have a population to tax system benefit imbalance (Ireland having < 5 million people and drawing hundred billion dollar companies to invest). Ireland went from being an always-underdog to Britain, to having nearly twice their GDP per capita. Finland and Sweden in 1990 had a GDP per capita 100% higher than Ireland; now Ireland is ~50%-60% higher. It took only 30 years to transform Ireland into a far wealthier nation and it was mostly due to the very attractive tax structure for large corporations. It made them very well positioned to ride the globalism economic boom.
  - mikhailfranco 8y ago
    Another significant factor in Ireland's rise was joining the EEC-EU. Ireland benefited with infrastructure gifted from the Regional Fund, and farming subsidies from the protectionist Common Agricultural Policy (CAP).
    - barry-cotter 8y ago
      No one doubts that helped but it wasn’t necessary. As soon as economic management went from import substitution to export promotion Ireland started growing a lot faster. You can’t turn around 50 years of idiocy immediately but EU membership isn’t a panacea either, look at Greece. Countries outside trading blocs in vaguely similar situations have made similar gains. Singapore has about the same number of people and a similar lack of natural resources with an educated populace and went from grinding poverty to the first world. New Zealand shows that agricultural nations can do fine trading on world terms too. Once we stopped punching ourselves in the face growth was going to come.
DanielFlower 8y ago
We need a similar article for what the average class is doing when it comes to migration.
mjcohen 8y ago
https://www.youtube.com/watch?v=0gC29ArkGG0 https://www.youtube.com/watch?v=0gC29ArkGG0
Tsubasachan 8y ago
You can tax the shit out of people if you provide something in return. Millionaires don't flee the Netherlands or Sweden.
- yeahitslikethat 8y ago
  Uh. That's not what the Scandinavians I know say.
  - jacobolus 8y ago
    The 2–3 Scandinavian millionaires I know say things like “I’m glad the government paid for my schooling up through college and I didn’t start my career buried in debt.” Or “Wow I’m glad we have a working heathcare system. The USA sounds like a dystopian nightmare.” Also “I wish our winter had a bit more sunshine.”
    - sandwich9 8y ago
      The argument is the US system is more extreme. In the US those 2-3 Scandinavian millionaires would be worth 4 times what they are worth there. But then again some of your friends living middle class there would be poor and housing insecure.
      - roenxi 8y ago
        That isn't the argument, the argument is that if you adjusted for the non-linear effects of growing the population then the US has a better or equal system. The US has a lot of warts, so that may not be true at the end of the day - but it is a pretty reasonable argument. The population of Scandanavia is less than 10% of the population of the US and is part of a larger European region. Comparing the Scandinavian system to the US system is like running US Federal policy by assuming all 300 million Americans live and work in the nice half of California rather than the geographically and economically diverse reality. A high tech industry hub can only employ so many people. Hence that non-linearity of effects. And the politics of scaling up population aren't at all smooth (small is better for politics). [0] https://en.wikipedia.org/wiki/List_of_countries_by_GDP_%28PPP%29_per_capita https://en.wikipedia.org/wiki/List_of_countries_by_GDP_%28PP...
monochromatic 8y ago
Surely this won’t happen in the US under Pocahontas’s confiscatory tax plan though.
paxys 8y ago
Makes perfect sense to me. There has been an immense amount of wealth created in developing nations over the last couple of decades. Quality of life, safety, infrastructure and political freedom, however, are still the same or getting worse. Combine that with ever-increasing official and unofficial extortion by the state, and there is no doubt that a millionaire would prefer to live in a first world country.
d_burfoot 8y ago
At least in the case of China, it's probably less about taxes and more about the fact that rich people have a bad habit of dying mysteriously: https://twitter.com/novogratz/status/1087548420129214464?lang=en https://twitter.com/novogratz/status/1087548420129214464?lan...
- TomVDB 8y ago
  It’s less about taxes, but it’s also not about dying mysteriously. The main reason is to have a backup plan in case things go wrong: there aren’t a lot of reliable legal protections to begin with and the political situation can change any time. Better have your wealth stored outside of the country and an additional citizenship so you can leave when necessary.
markvdb 8y ago
Related observation. Wealth used to especially escape countries to small neighbours. Examples: * Belgium: Luxemburg * France: Monaco, Luxemburg, Switzerland * Germany: Liechtenstein, Luxemburg, Switzerland * Italy: Vatican city, San Marino, Switzerland * Spain: Andorra, Gibraltar * UK: the channel islands
- byw 8y ago
  Luxembourg and Switzerland have really hit the jackpot.

67 points by spking 8y ago

> In October 2018, it released a blacklist of 21 jurisdictions, including Malta and Cyprus, that it believes are undermining international efforts to combat tax evasion. Every possible means should be brought to bear in punishing these enablers of tax evasion. Steal from the rest of us at such a scale? Prepare to feel pain.

seibelj 8y ago
If I donate to a nonprofit, itemize my deductions, and get a tax reduction based on my donation, am I not "evading" taxes? Sure, donations are perfectly legal and an above-board way to evade paying taxes to the USA, but it's still tax avoidance and I could choose not to itemize, especially if my donations were 100% pure of heart. Similarly, emigrating to Malta, or Bermuda, etc. is perfectly legal and if I do so for the weather, or to avoid paying taxes, is not one just as legal as the other? Even moving from New York to Texas so my combined state and city income taxes drop from 10% to 0% has a whiff of tax avoidance. Simply put, people vote with their feet, and the rich have the best shoes money can buy.
- adventured 8y ago
  > If I donate to a nonprofit, itemize my deductions, and get a tax reduction based on my donation, am I not "evading" taxes? No. You're mixing up terms. That's avoiding taxes. There's a critical distinction in the tax world between avoiding taxes and evading taxes. One is legal and common, one can send you to prison and get you a lifetime of close IRS scrutiny. Simplified, evading means to not pay what you actually owe (what you should be paying). Avoiding means to use entirely legal means - such as deductions - to not owe the taxes in the first place. To evade taxes you always have to do something illegal. In avoiding taxes you should never break the law.
  - seibelj 8y ago
    Emigrating to lower-tax countries is not illegal. So it's not tax evasion, correct? Anything I do that is legal cannot be tax evasion?
- sdoering 8y ago
  Well if you donate money it should, in a perfect world, be only tax deductible if it is for an effort society seems of special value so that incentives are implemented to support this. So tax deductible donations show what is important for a society at large. And society profits. Leaving a country to evade taxes doesn't help society at large. People do this after they profit of the infrastructure and all other stuff society provided and paid for with taxes.
  - seibelj 8y ago
    But nonprofits encompass a huge variety of organizations, some promoting guns (the National Rifle Association[0]) and others paying for abortions[1]. Wouldn't it be better to force everyone to pay their taxes owed, then if they are truly altruistic, donate whatever extra they want? I really don't see how tax deductions for donations aren't glorified tax evasion strategies. [0] https://www.snopes.com/fact-check/nra-tax-exempt-non-profit/ https://www.snopes.com/fact-check/nra-tax-exempt-non-profit/ [1] https://abortionfunds.org/ https://abortionfunds.org/
- sonnyblarney 8y ago
  "donate to a nonprofit" is not 'tax evasion' (which is illegal) You could argue it's tax avoidance, but it's not even that, it's just making a donation, and that's how they are taxed. It's part of your normal activity: taxes are higher on some things than others. Creating a non-profit as a special purpose vehicle would be 'tax avoidance' but if it's legal, it's legal. The OP's comments are perfectly just i.e. punishing tax havens because there's deep incentive for them to facilitate actual tax evasion, moreover, they enable the stockpiling of surpluses generated elsewhere. Especially for those part of a 'common market' - you can't have taxes at 1% in Malta and 50% and France, it's not going to work. Dubai does not have any tax deals with the US, it's built on utterly shady tax dealings. Much of the money poured into Afghanistan by the US for reconstruction ends up there, for example. It's super duper dirty. People are not fleeing China because of 'taxation' in the classical sense, they're fleeing for a pile of other, obvious reasons. People are however fleeing France, partly due to 'taxation' and this is an issue ... they have some issues with competitively and their solution of 'just tax the rich' will not work out if that's it. Worth considering: normalize the migration data against 'regular people' and what you'll find is that still a lot of Chinese are moving to Australia/Canada, and in general people are moving there, the US anyhow! I'll bet the one that sticks out a little is France. I don't suggest a ton of people are leaving, net.
  - seibelj 8y ago
    > You could argue it's tax avoidance, but it's not even that, it's just making a donation, and that's how they are taxed. It's part of your normal activity: taxes are higher on some things than others. Right, but if it's perfectly legal to emigrate to a lower-tax jurisdiction, is that not "part of normal activity"? I think there's an argument to remove the tax deduction for donations. If you are doing it altruistically, then you still owe your fair share to the government, no?
- kartan 8y ago
  > Simply put, people vote with their feet, and the rich have the best shoes money can buy. I have been on vacations on Malta. It is a nice place for a vacation, but it is not the most interesting place in the world to live in. Rich people are rich because they have access to luxury items, health care, transportations systems, etc. For all that to exist a complex society is needed where citizens have education, transport, health care, food safety, clean water, rule of law... and all that costs money, a lot of it. If rich people leave that society, how rich are they? How easy is to just tax the business that produces wealth? Malta, as a nice place as it is, cannot produce super-rich people. Is Malta decides to isolate itself it just becomes an inhabitable rock in the middle of the Mediterranean. The same goes for more tax havens. Rich people will vote with their feet, but the economy will not care. Taxes are needed to generate any wealth independently of the tantrum of a few rich people.
  - floatingatoll 8y ago
    In a just world, the 100 countries signed on to the information sharing agreement would embargo travel to and from Malta and other countries that support evasion, with passport seizures at the border when their citizens enter with Malta passport stamp pending the outcome of a criminal investigation into their reason for visiting.
    - Zarath 8y ago
      Sounds like a great world!
      - floatingatoll 8y ago
        I hope someday to be befriended by a wealthy person, so that I can better empathize with the trauma that such a policy would inflict on them, but I am poor because I funded someone’s book and have never known anyone rich enough to care about avoiding taxes. Perhaps someday I will have such a friend, but not today. Based on your reaction, I envy you that :(
  - kgwgk 8y ago
    > [Malta] it is not the most interesting place in the world to live in. Rich people are rich because they have access to [...] If rich people leave that society, how rich are they? So you want to prevent rich people from moving to low-tax jurisdictions for their own good? How kind of you!
- solidsnack9000 8y ago
  At a high level, what makes tax evasion wrong is when people are able to benefit from the commons — stable currency, weights and measures, a climate of rule of law and the commensurate security of property — without paying into it. People who have successful businesses and are worth millions of dollars would be robbed and cheated every single day if it were not for the vast array of institutions — expensive institutions — that facilitate the climate of trust and security characteristic of developed countries today.
  - seibelj 8y ago
    The majority of us would agree that 100% taxation is unworkable, as in, every single cent of income I earn is seized by the state. Given your comment, I assume you think 0% taxation is also infeasible. So we agree that somewhere above 0% and below 100% taxation there is some optimal amount. However, given the circumstances of the country and our personal philosophies, we may disagree on that optimal level. The fact that free people can move to lower (or higher!) tax jurisdictions, and judge the quality of those services based on how much they pay and what they get in return, is a good thing in my opinion. The competition keeps politicians from elevating taxation to that unworkable 100%.
    - techsupporter 8y ago
      > The fact that free people can move to lower (or higher!) tax jurisdictions, and judge the quality of those services based on how much they pay and what they get in return, is a good thing in my opinion. I think few would disagree that if you move to a new jurisdiction to benefit from a different tax scheme, that's fine. But therein lies two problems: First, so few people are able to move; the wealthy are disproportionally able to have their pick of tax jurisdictions so they can extract benefits from one society and then jump ship when it suits them without returning benefits to that society. Second is when people move on "paper" to benefit from another jurisdiction but don't physically move in reality. Thus they continue to benefit from the society they nominally "left" but don't pay into it. That's the kind of tax avoidance / evasion that most people have a problem with.
- rectang 8y ago
  The passage I quoted is about evasion, not avoidance. To give a bit more context, the prior sentence speaks of "misuse". > The Organisation for Economic Co-operation & Development is scrutinizing the potential misuse of these schemes. In October 2018, it released a blacklist of 21 jurisdictions, including Malta and Cyprus, that it believes are undermining international efforts to combat tax evasion. What we're talking about here is hiding assets that are subject to taxation. Like Swiss banks did for many years.
Solar19 8y ago
Stealing? That would imply that someone else's money belongs to you, which by definition it does not. I think it's unethical to tax anyone's income, and if people can escape it I'm happy for them.
- sonnyblarney 8y ago
  "I think it's unethical to tax anyone's income" Wow, more classically liberal than the man himself Adam Smith, who basically invented the concept of graduated taxation because he laid out how such systems would work and what would end up happening without it.
- kartan 8y ago
  > I think it's unethical to tax anyone's income How will you pay for a functional society then? All these people that are rich, it is rich because they live in very complex, healthy, educated societies. That does not come from the air. How will you make sure that one person does not accumulate all world wealth? Without progressive taxation, wealth accumulates naturally as having more money makes it even easier to make even more money. How could such a system work? I would like to understand your position. Why paying for the sustain the society where you live in is unethical?
  - fit2rule 8y ago
    Tax spending, not income. Income tax is theft since it is the state usurping the will of the individual, and literally saps the agency one might have over ones progress - Expenditure tax is a better solution, since it allows the individual to maintain agency over their wealth, while also allowing the state to gain income on equal ground. Really, its time for societies to evolve beyond state-supported theft through threat of force, and grant individuals more agency over how they use their wealth. The current system is criminal.
    - zwaps 8y ago
      This means you will have a regressive taxation scheme, where poor people have to pay a larger percentage of their income as tax, and rich people a very small percentage. To be able to run a stable state that actually allows anyone to have opportunities, taxation would have to be pretty high. After all, you need well funded public schools, child services, police/emergency service and a health system at the very least - otherwise you just end up with a bisected society of rich and poor. But then you need to have a high taxation rate on expenditure (most countries have a VAT, for example, and it would not be enough by itself). So again, this smothers the poors, and they could not, for example, gain wealth themselves. Why does this imply that taxation is not theft? I think the most important argument is, that people have accumulated their wealth in either of two ways. First, they did not earn it themselves. Then, one could reasonably argue that some taxation is fair. Second, they accumulated it themselves, such as by starting a business. Then you argue that taxation is theft. However, they earned their money in the existing society. Since they were not rich, they, at that time, used all public services, education, markets and stability provided by the system, while also paying relatively little. They are rich, in part because of a consumer surplus society affords by non-regressive taxation. It is therefore fair, and and not theft, that they are to pay more of their wealth, which they gained within a beneficial system of taxation, to keep that same system stable for the next generation.
praveenperera 8y ago
People holding on to more of their OWN money is some how stealing "from the rest of us"?
- kartan 8y ago
  > more of their OWN money How is it their own money if it is the state money? That is all the point. It is not their money. If I buy an apple an I do not want to give the money to the cashier because "it is my money", I am stealing.
- rxhernandez 8y ago
  That money was very likely made off the infrastructure the rest of us contributed to.
  - praveenperera 8y ago
    That's a reasonable argument for the people still living in the states. But falls apart when it comes to FATCA. Also you could make the argument that the people rich enough take advantage of these schemes have already paid more tax than most people through other taxes.
    - esarbe 8y ago
      You could also make the argument that if they are rich enough to take advantage of these schemes, they should instead just acknowledge the fact that without the society that gave them the tools to prosper they'd be just some hairless monkeys in the middle of nowhere dying of hunger and that they are thus required to contribute their fair share to the society and community that enabled them to flourish.
- rectang 8y ago
  The passage I quoted is specifically talking about tax evasion. As in, I pay the taxes I'm required to by law, and these people are not paying the taxes they are required to by law.
kmlx 8y ago
here goes an unpopular opinion: the internet made me realize the age of the “state”, and it’s inherent “divide et impera” status is coming to an end. considering how badly huge amounts of moneys are managed by states, the monopolies these entities have on taxes, and the complete failure of democracy in general (by which tiny subsets of populations choose swaths of politicians) i say let the concept of the “state” and their politicians end. let me pay “tax” to whichever construct i choose rather than forcing me to contribute to garbage states. the more the internet connects, the less “states” and “nations” will be a thing.
- deleted 8y ago
  [deleted]
deleted 8y ago
[deleted]
Mirioron 8y ago
So, small countries should not be allowed to try to attract businesses? Only big and rich countries are allowed to do that?
Zarath 8y ago
Everybody knows Malta, Cyprus, US Virgin Islands, etc. are tax havens/tax evasion shelters, it is very surprising that this is surprising.
- rectang 8y ago
  Where did you get that people are surprised? I'm not surprised. Reality is Hobbesian; violence and lawlessness is the natural state. Tax evasion is never surprising. What I'm advocating is retaliation against other countries that are facilitating criminal behavior.
  - sandwich9 8y ago
    The problem might be different competing forces of the country who would enforce these things. They might be controlled by those who put their money in these tax havens.
  - fwip 8y ago
    Violence and lawlessness are not the natural state. The majority of human societies live in peace. Uncontacted tribes never before exposed to us generally mostly live in peace together. They don't have the word "law" but they have an agreed upon set of social norms that people don't violate. Even most primates live in mostly peaceful social groups with established social norms. Hobbes erred in his assessment of the natural state of humans.

deleted 8y ago

[deleted]

jaabe 8y ago

It’s always been like that, hasn’t it? I seem to recall it being one of the reasons why liberalism has had such staying power. It was how the Dutch became a powerhouse on the line of Spain, England and France in the colonial age. Because they let their people be, and didn’t take their wealth, it became an attractive haven for rich families who then did business. I’m not sure the latter is as beneficial as it was then, as you can now turn money into more money without investing in local business, but the former is going to remain true forever. People who have the means to do so, will always chose the freer country.

adventured 8y ago
It's still true. Alluring taxation approaches rapidly turned Hong Kong, Singapore and Ireland into very wealthy nations. All three used very low tax systems to draw wealth and investment to their shores in various ways. Works very well for small, stable nations. It loses effectiveness with increasing population scale. The approach is better to the extent you have a population to tax system benefit imbalance (Ireland having < 5 million people and drawing hundred billion dollar companies to invest). Ireland went from being an always-underdog to Britain, to having nearly twice their GDP per capita. Finland and Sweden in 1990 had a GDP per capita 100% higher than Ireland; now Ireland is ~50%-60% higher. It took only 30 years to transform Ireland into a far wealthier nation and it was mostly due to the very attractive tax structure for large corporations. It made them very well positioned to ride the globalism economic boom.
- mikhailfranco 8y ago
  Another significant factor in Ireland's rise was joining the EEC-EU. Ireland benefited with infrastructure gifted from the Regional Fund, and farming subsidies from the protectionist Common Agricultural Policy (CAP).
  - barry-cotter 8y ago
    No one doubts that helped but it wasn’t necessary. As soon as economic management went from import substitution to export promotion Ireland started growing a lot faster. You can’t turn around 50 years of idiocy immediately but EU membership isn’t a panacea either, look at Greece. Countries outside trading blocs in vaguely similar situations have made similar gains. Singapore has about the same number of people and a similar lack of natural resources with an educated populace and went from grinding poverty to the first world. New Zealand shows that agricultural nations can do fine trading on world terms too. Once we stopped punching ourselves in the face growth was going to come.

DanielFlower 8y ago

We need a similar article for what the average class is doing when it comes to migration.

mjcohen 8y ago

https://www.youtube.com/watch?v=0gC29ArkGG0 https://www.youtube.com/watch?v=0gC29ArkGG0

Tsubasachan 8y ago

You can tax the shit out of people if you provide something in return. Millionaires don't flee the Netherlands or Sweden.

yeahitslikethat 8y ago
Uh. That's not what the Scandinavians I know say.
- jacobolus 8y ago
  The 2–3 Scandinavian millionaires I know say things like “I’m glad the government paid for my schooling up through college and I didn’t start my career buried in debt.” Or “Wow I’m glad we have a working heathcare system. The USA sounds like a dystopian nightmare.” Also “I wish our winter had a bit more sunshine.”
  - sandwich9 8y ago
    The argument is the US system is more extreme. In the US those 2-3 Scandinavian millionaires would be worth 4 times what they are worth there. But then again some of your friends living middle class there would be poor and housing insecure.
    - roenxi 8y ago
      That isn't the argument, the argument is that if you adjusted for the non-linear effects of growing the population then the US has a better or equal system. The US has a lot of warts, so that may not be true at the end of the day - but it is a pretty reasonable argument. The population of Scandanavia is less than 10% of the population of the US and is part of a larger European region. Comparing the Scandinavian system to the US system is like running US Federal policy by assuming all 300 million Americans live and work in the nice half of California rather than the geographically and economically diverse reality. A high tech industry hub can only employ so many people. Hence that non-linearity of effects. And the politics of scaling up population aren't at all smooth (small is better for politics). [0] https://en.wikipedia.org/wiki/List_of_countries_by_GDP_%28PPP%29_per_capita https://en.wikipedia.org/wiki/List_of_countries_by_GDP_%28PP...

monochromatic 8y ago

Surely this won’t happen in the US under Pocahontas’s confiscatory tax plan though.

paxys 8y ago

Makes perfect sense to me. There has been an immense amount of wealth created in developing nations over the last couple of decades. Quality of life, safety, infrastructure and political freedom, however, are still the same or getting worse. Combine that with ever-increasing official and unofficial extortion by the state, and there is no doubt that a millionaire would prefer to live in a first world country.

d_burfoot 8y ago

At least in the case of China, it's probably less about taxes and more about the fact that rich people have a bad habit of dying mysteriously: https://twitter.com/novogratz/status/1087548420129214464?lang=en https://twitter.com/novogratz/status/1087548420129214464?lan...

TomVDB 8y ago
It’s less about taxes, but it’s also not about dying mysteriously. The main reason is to have a backup plan in case things go wrong: there aren’t a lot of reliable legal protections to begin with and the political situation can change any time. Better have your wealth stored outside of the country and an additional citizenship so you can leave when necessary.

markvdb 8y ago

Related observation. Wealth used to especially escape countries to small neighbours. Examples: * Belgium: Luxemburg * France: Monaco, Luxemburg, Switzerland * Germany: Liechtenstein, Luxemburg, Switzerland * Italy: Vatican city, San Marino, Switzerland * Spain: Andorra, Gibraltar * UK: the channel islands

byw 8y ago
Luxembourg and Switzerland have really hit the jackpot.