Do you think there's any level of taxation where a wealthy individual wouldn't want to do some "tax avoidance" in another jurisdiction? I suspect there is not.
I think we’ve seen this before… usually ends in democide…
*Except for white-collar crime.
Because worst case, the rich entity can flee, or renounce citizenship and buy citizenship where the tax climate is more favorable. With the amount of money we are speaking about, you can buy anything. Each and every country has a very fast track to citizenship in exchange for money (and an instant path to pretty much all rights except for voting). So you threaten the wealthy with torture? Unless you do all this by surprise one day all of a sudden, they can and will escape.
$150k buys you a Carribean citizenship + passports for the family of 4. 0% income tax and 0% capital gains tax in Antigua and Barbuda. 365 sandy beaches.
What not to love for freedom seeking individuals?
There is quite a bit of progress among rich nations, which is indeed why the article mentioned many of the individuals come from corrupt nations.
The issue, therefore, may not be so much of 'tax havens' but of 'corrupt systems that allow for tax havens'.
I don't think Bezos has a pile of cash secretly offshore.
That should be easy to understand.
Just as robbing productive people with taxes is not going to work.
Significantly reduce or offset personal and capital gain taxes for people who are investing into public projects.
There are many more better ways that tax abusive policies that never work.
Reinvested money already isn't taxed. Companies pay taxes on profits. If they invest more, they reduce their taxable profit and therefore their taxes.
Taxes are not deferring investments, investments are the prime way to pay less taxes. The government wants you to reinvest rather than pay taxes.
Off-shore tax havens broke that system. These companies have billions of dollars sitting unproductively in the Bahamas because they neither want to invest not pay taxes.
The less progressive the tax and the less it's properly enforced the more inequality will occur. Poor and middleclass more effectively stimulate the economy with an equal amount of consumption simply due to the nature of what they spend it on and their quantity.
>Just as robbing productive people with taxes is not going to work.
How many of these are super productive, hardworking and/or smart to such an extent that their hard work and/or wonderful decision-making proportionally matches their wealth compared to you know your average middleclass engineers, programmers, medium and small business owners or the like. I'd estimate the percentage to be very small. And if their wealth somehow matches their productivity proportionally and above a certain amount quantifiable as ridiculously wealthy i'd start wondering where in the superhero universe these people fit.
"The lower the tax - the more money will stay and will be reinvested into the local economy."
Start here. Less taxes == more money is staying and reinvested in the local economy for the good of everyone.
Bonus: more money start coming in from other jurisdictions that are abusing their productive citizens and businesses with exorbitant taxes.
You're oversimplifying this but even when just sticking to the core of your point i strongly disagree.
>Start here. Less taxes == more money is staying and reinvested in the local economy for the good of everyone.
Not really. Want to stimulate the economy with reinvestments? Dis-incentivise stock buybacks and the like, tax hard. Companies and people don't like to pay taxes. How do you avoid taxes as a company or owner? By having less profits trough reinvestment in R&D, growthprojects and wages.
Tax less and you reduce the incentive to reinvest into the local economy.
Loopholes for example aren’t some inherent element of tax codes their built and maintained for the express purpose of being used.
Why wouldn't person move outside of tax jurusdiction if it afford saving few extra $MM's and possibility to discover more beautiful, friendly countries?
Of course US Citizenship essentially became IRS trap and renouncing it became very difficult thing to do for americans
So sure, examples exist they simply don’t add up to a meaningful percentage. As to why they stay, making say 10% more money just isn’t worth much hassle to the rich. They have money what they want is all the things a well functioning society gives them.
Run on a road or highway? Pay a toll. Run a container through the ocean? Pay a fee for protection. Want to have nicer neighborhoods with better maintenance? Pay higher property taxes to your municipality.
You can't escape direct taxation. And as long as you keep competition between companies, municipalities and jurisdictions; the system will balance itself where individuals will pay what they are comfortable with by their own volition.
The current system is broken because a small bureaucratic minority has too much power over your own property (they can seize your property/money at random). It's also too easy to get popular votes and people onboard with it (free healthcare for everyone!).