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It is reasonably easy. Step 1. The country creates a law forbidding any financial interactions with "offshore" countries (list is populated manually by lawmake
by Yizahi 4y ago
It is reasonably easy.
Step 1. The country creates a law forbidding any financial interactions with "offshore" countries (list is populated manually by lawmakers) and also with companies working with such offshore companies (shell intermediaries) in "good" countries.
Step 2. Country forbids its citizens from owning any assets or be incorporated in the same "offshore" countries.
Step 3. Blanket ban of cryptotokens.
Step 4. Huge inheritance taxes.
Step 5. Incremental tax hikes for second and more houses/apartments owned. Restrictions for corporations owning a lot of residential properties and huge taxation.
Step 6. Ban or restrictions of airbnb-like activities to discourage parking money in the housing market.
Basically look where rich hide money go for that. When they switch tactics you follow.
Step 0. Big independent financial auditor structure, independent from law and judicial branched both (or almost independent). From experience - you can dismantle a lot billionaires even with existing laws, if only someone looked close enough and punished them. This is a huge problem in eastern europe for example.
- robertlagrant 4y agoWhat will be the downsides of these moves?
- Yizahi 4y agoIf any single country will try this alone - devastating. For the country :) . If USA alone will try it - maybe it will work, idk. If USA plus EU plus major Asian economies will do it collectively - it will work.
- robertlagrant 4y agoSorry, I wasn't clear. Assuming you get what you want, what will be the downsides?
- Yizahi 4y agoFor independent financial auditor - none that I can think of. For offshore restrictions - you as a country lose all existing assets already there. A lot of people will move their business to a better countries, providing less restrictions and eventually taxes for them. Probably election loss and further dismantling of all these laws by disgrunted businessmen using their pocket political forces. If will hugely depend on the collective size of economies doing the ban. For housing - its tourists plus rent seekers vs. regular citizens. You hurt one group and you benefit another and vice versa. There is no win win scenario here, balance must be found. I personally vote for regular citizens, even if tourism industry will be hurt a little bit. For inheritance taxes - no downsides. For token ban - no downsides.
- robertlagrant 4y agoI think inheritance tax has huge downsides. Past a certain age, if you've done reasonably well, and are thus most likely to make a huge impact for the better in your latter working years, why do that most useful useful work if you can't pass it on?
- feet 4y agoYou can pass it on, but you have to pay taxes on it
- robertlagrant 4y agoWe have that today. For some people it's not worth working, and they might as well retire and stop contributing. As we raise the inheritance tax rate, that number will drastically increase, and we get to raid some one-off money in exchange for much less productive work.
- Jotra7 4y ago[dead]
- IntrepidWorm 4y ago
- ls15 4y agoBut what are the downsides?
- bawolff 4y agoWell the obvious ones: Some people have legitiment business interests in tax-haven type countries that are not about avoiding taxes. No country is just purely a tax haven with no other ecconomic activity after all. In theory a blanket ban on crypto could harm innovation. This was much easier to believe at the beggining of the hype cycle when it seemed like someone might actually do something useful with blockchain tech. Kind of hard to believe at this stage. I feel like inheritence tax is kind of pointless by itself. Most people dont just suddenly die and have time to distribute their assets pre-death. Limiting housing investment might make cost of living go up. Its not like houses just appear out of nowhere. lots of people cant afford to just buy/build a house. Rich people buying houses and renting them out helps fill that gap. It doesn't always work out as ideally at that, but the other extreme of severely restricting real estate ownership would probably screw over poor people too who do not have sufficient resources to get a mortgage. They still need somewhere to live. I dont really know what independent auditors means precisely. IRS/CRA/etc are already pretty independent. They could be better funded though.
- raverbashing 4y agoYeah, that's a very easy way... Of making all your modestly rich people close shop and leave > forbidding any financial interactions with "offshore" countries And what do you think "offshore" means? This is TikTok levels of financial naivety
- Yizahi 4y agoOffshore is common term. Its collectively all those small countries which have minuscule corporate tax, zero financial rules and refusal to cooperate with big countries about financial tax evasion. Basically everyone from Ireland, Switzerland (sorry guys, just business) to Bahamas and Panama (and ban flags of convenience while we are at it). Definitely all countries refusing to disclose financial records for international law enforcement. If I were planning such effort, I would propose do bans in waves, with multiyear intervals. E.g. ban of top10 worst offender countries - Cayman islands, British Virgin islands, Seychelles, etc. Then make a list of 10 next and warn them that they have 2-3 years to adjust or be banned too. Rinse and repeat.
- raverbashing 4y ago> Definitely all countries refusing to disclose financial records for international law enforcement. Since you apparently never heard of FATCA and OECD CRS I'll leave it at that Oh yeah and several US States don't require financial/personal information in a lot of cases (including real estate transactions).
- Yizahi 4y agoI'm aware that there are a lot of legal frameworks about this issue. So what? In the end they are either impotent or not sufficient. The problem is global and doesn't show any signs of abating.
- Hard_Space 4y agoThis is in Dickens - Bleak House, I think, when he refers to all the under-taxed industrialists promising to 'pitch' their acumen into the Atlantic (i.e., move to the United States) if any government dares to restrict their income through increased taxation.
- ls15 4y agoYou lost me at step 1. Punishing people because their families live in what some people deem "offshore" is heartless. Also, forget modern technology like smartphones if you only can do trade with "good" countries.
- Yizahi 4y agoI should have clarified - I don't propose to "ban" half the planet because they the not optimal with their laws or prosecution. Offshore usually means tax heavens, usually the tiny island countries with small native population and incredibly lax financial regulation or none at all. Those are the primary targets.
- sam_lowry_ 4y agoStart with Delaware.
- Yizahi 4y agoExactly this. How can such arrangement exist in the USA is strange for me.
- throwaway161718 4y agodon't forget South Dakota - it will be put most tax havens to shame. https://www.theguardian.com/world/2019/nov/14/the-great-american-tax-haven-why-the-super-rich-love-south-dakota-trust-laws https://www.theguardian.com/world/2019/nov/14/the-great-amer...
- cameronh90 4y agoSurprisingly, people do live in those places too. I was born on one and still have a lot of family there, and none of us are wealthy.
- naasking 4y ago> 1. Punishing people because their families live in what some people deem "offshore" is heartless. If it were the only way to address societal inequalities, is it more heartless than letting those continue?
- bawolff 4y agoSo your plan to tax wealth instead of income doesn't involve taxing wealth? Sure you can do all that, and that would close some tax loopholes (albeit at a cost), but has nothing to do with taxing wealth instead of income.
- feet 4y agoSee step 4? They should probably add in an increased capital gains tax as well
- SuoDuanDao 4y agowhat's to prevent a wealthy parent from gifting wealth to their children while alive? This seems like the easiest thing of all for someone with a competent accountant to circumvent. Bad for families building generational wealth who don't have it yet though, and boy do I hate the idea as a result.
- feet 4y agoIn the current system 95% of families can't build generational wealth so the point seems moot It's the temporarily embarrassed millionaire syndrome. Sorry but it just doesn't happen for most people due to the way the system works
- SuoDuanDao 4y agoThe problem seems to be education. Plenty of immigrants are able to give their children better lives.
- horns4lyfe 4y agoStep 4 does little but hurt upper middle families. They effectively lose the ability to pass on anything of value to their children while the truly rich we’ll still be able to pass on something of value to their children. And the cycle continues, and inequality increases.
- illuminerdy 4y ago[dead]