The Final Days of a Tax Haven
bloomberg.com
bloomberg.com
The reason? The US might throw it's weight around with FATCA and many things before it to get even moderately sized transactions reported to it and to have assets of US citizens reported but the problem is the information doesn't go the other way.
So the result is those dodging taxes in the EU will probably treat the US as a financial shield to hide wealth from their governments.
One elegant taxation system to accomplish that is the land value tax: https://en.wikipedia.org/wiki/Land_value_tax
That's all well and good until someone decides to apply that reasoning to something else, like, say....the Internet.
You really think all that wireless spectrum is finding it's best use sharing cat videos? High-bandwidth video emojis?
They aren't making any more RF spectrum either.
One man's "common sense solution" is another man's "free market distortion".
And there is PLENTY of land to go around....so.....bad example. You could give nearly every single person on the planet plenty of room to live in Texas. That's without going vertical into multi-story buildings.
Ultimately the best use of people's labor is whatever they want to do with it. If that's buying houses, great. Beanie babies, faberge eggs, gold ingots, whatever.
Do you really need all that crap you own?
It's treated like real-estate with RF "zoning rules".
But very wide swaths of the RF spectrum are essentially a free -for-all. You could argue that the most valuable parts (UHF) are used for stuff that could only be described as "non-essential" e.g. cat videos.
The rest of your post is non-sequiturs that I'm not going to bother engaging.
Not even as a hedge against whatever is going on in their country?
On that point I mostly agree, though I'm sure there are some small benefits that accrue - almost certainly cancelled out by the disadvantages though.
That said, I think the old "unoccupied houses" thing is way overblown. It presents the most ugly side of foreign real estate ownership so that people who are priced out of the market get angry at all of the foreigners buying property. Even if you removed every unoccupied SFH (single family home) from the market, prices, generally, would still be rising.
It's sort of like saying that the reason that a car costs so much is because the demand is high based on too many families owning more cars than they need. It gives people a target for their dissatisfaction with current auto prices but really isn't the main issue and even if you solved for that issue it wouldn't dramatically impact auto prices.
But having a target for your anger is a wonderful way to distract people.
I also hear it from folks who have never had to deal with the heavy handed tactics of a government that unabashedly tries to extort money from pockets it considers "deep enough" to pick.
You might think those tax dollars find their way to useful social programs. You'd be wrong. More often than not, they're used to prop up favored industries or enrich politically connected individuals.
I don't condone tax cheating. But I absolutely condone jurisdiction shopping if it helps to keep funds in the hands of those that earned it. I know that'll make me unpopular with a certain vocal minority but those folks haven't ever bought me so much as a cup of coffee so I think I'll live.
the Swiss banking act that guaranteed secrecy to customers of Swiss banks were intended to protect information about the Jewish people from Nazi Germany. This act is now ineffective since Switzerland has harmonized reporting rules with both US and the EU several years ago. Singapore was also grey-listed with other popular tax havens and they too had to moderate their banking secrecy to get on the white list. you'd be hard pressed to find a useful bank anywhere in the world that isn't FATCA compliant.
Great attitude, sir. But who will build the roads? ;)
Some EuropeanS with a link to the US have to move their bank accounts or investments accounts to the US because the European banks literally kick them out of fear of not being able to comply with FATCA.
> The offshore financial sector kicks in only about 4 percent of the country’s annual output of roughly $800 million, but its existence requires an ultralow tax environment that deprives the government of some revenue.
Not sure I get this. I don't see a rational reason why such tax havens should exist in the first place. If efforts are made now to regulate them, surely that's a good thing. Hope they will be able to transform their economy anyway.
These individuals make very respectable incomes doing very little work living in an area with a rock-bottom cost of living and propagate their status in society by imposing regulations that lock in the need for their services, like local directorship quotas for local companies. An individual can sit on 30~ or so local boards for $20,000 a year each with a PO box for an office. That's a cool half-mil per year to sit on the beach, drink out of a coconut, and read a few pages of board materials a day.
This isn't the case for all companies, but it sure is the case for some.
Viewed as distinct, large nations have a fuckton more negotiating leverage than Vanuatu's financial industry.
The real issue is that Vanuatu and other similarly placed tax havens aren't distinct. They are run by sophisticated professionals for capital holders in developed countries.
Those are the same people who are at the bargaining table; those who know about the issue in depth or that have substantial capital involved all benefit from the wealth extraction the current international regime provides.
If I were to assess the actual share, I would go by elimination: everything sans tourism, minuscule local food production industry, and transportation.
From Wikipedia:
An oasis (/oʊˈeɪsɪs/; plural: oases /oʊˈeɪsiːz/) is an isolated area in a desert, typically surrounding a spring or similar water source, such as a pond or small lake.