THE PRINCIPLE

The most basic principle for human coexistence is this: what's mine is mine and what's yours is yours. Yet, taxation breaks this very principle; the principle of private property.

Governments' view of this point is simple: what's yours is mine and we will let you keep some of it. Does this seem fair to you?

You

This is how normal human being reacts when confronted with theft. Imagine that you are walking down the street and an armed assailant jumps in front of you demanding: your money or your life!

– OK. There you have my wallet, just please don't hurt me.

That would be the standard reply, if somebody has more than two neurons working together. It is not worth risking one's life for some money.

This is how most of us react. Yet, this is what the government says we should not do. According to the government, this is how we should react in a similar scenario.

The government

– OK. There you have my wallet, just please don't hurt me.

The assailant takes the wallet and begins to walk away.

– Hold on! I forgot to give you my ring, it's 12 karats (exclaim you while tossing the ring to the thief). The thief catches the ring and turns but…

– Wait! Wait! I forgot to tell you that I have my car parked over there. Here, have the keys. The tank is full and there are another 100 bucks in the glove compartment for emergencies. Also, the car is new and they should give you a good price for it. Would you like me to sign it to your name? The thief says yes, and you deliver. The thief is about to live when you…

– Just a second! I still haven’t given you the keys to my house. There is a safety box in the living room behind the first painting and the combination is 3, 5, 32, 5, 55. There is some money in it an some jewels. Oh, Oh, Oh, and while you are at my house, don't forget to take all the Credit Cards and ATM cards from the second drawer at my desk, the PIN for all of them is 3484. The thief acknowledges and begins to walk away when…

– Just one thing, I still haven’t told you about the safe deposit box in the bank, my checking and savings account, retirement fund and… on and on and on.

This is how the government expects you to behave when it comes to taxes. Does this make any sense whatsoever to you? Of course not.

People deposits money in Tax Havens simply as a self-defense against a thief. They do so because this is the only thing they can do. They don't do this because they are evil, but because they are sick and tired of being robbed by the very same people tasked with defending them from being robbed!

Tax Havens are the last resort; not the first choice.

Do you honestly believe that anybody in their right mind would take a chance to face criminal charges just because they like to live dangerously?

THE PEOPLE

In addition, we have the "propaganda" problem. There are several "projects" nowadays going on about so-called "journalistic research projects" looking at unmasking Tax Havens' patrons. And how do these so-called impartial journalists behave? They go for the jugular vein. They look for known personalities, typically politicians and big industrialists and they may a big deal about the millions they deposited. Look, look they say. Evil, evil, they say. Look at person X or person Y!!

And from that point on, they extrapolate those personalities on everybody who has an account in Tax Havens. The idea is to demonize all people making use of this option by comparing them with a few (very few) really bad characters. In reality, as usual, nothing can be further from the truth. As their own research shows (and for some reason this does not seem to be "front page material"), most people in Tax Havens are simple professionals. People that have worked all their lives in honest labor and paid most of their taxes. People that are desperately trying to save a few extra bucks for a comfortable retirement, retirement which in most cases the government promised but never delivered.

The inconvenient truth is that most people in Tax Havens are just average people belonging to the middle class or slightly above. How can anybody in their right mind and with a miniscule amount of decency blame those people? The answer is simple. They are not in their right mind because they need to sell news and regular Joe or Jane in Tax Havens do not sell news.

There are, of course, other characters. Let's take a closer look.

Politicians

Journalists have uncovered several politicians with large hidden accounts. The horror! See why we need full transparency of all banking transactions at the worldwide level? We need this so that politicians won't be able to stash their ill-gotten profits.

Sounds reasonable, sounds about right and is, of course, bull manure.

The problem is not that politicians cheated, that's what politicians do according to the demands of the deified and glorious Democratic system (see Politicians And Bureaucrats Job Security Through Misery). The problem is that the Democratic system is broke and an enabler for politicians to cheat. The solution is not more regulations that do not work; the solution is to remove the Democratic system which does not work. This will remove all politicians and hence all politicians' cheating.

Furthermore, we have been notified in horror that some had-been dictators also stashed their money in Tax Havens. But then again, for as long as there are countries, there will be dictators. The problem is not the dictator, but the existence of the notion of "country" that enable dictators to exist and rob the people. Remove countries and the problem goes away.

Tax Havens have nothing to do with who puts money into them. They are neutral. They are simply a tool which most people use for financial self-defense. Just like a defensive gun. Most people will use them to protect themselves, yet some will abuse them. Is this a valid argument to ban all defensive guns? Of course not. The problem is not the guns, the problem is some people.

Corporations

Among the "characters" that made the "front page" cut, are several corporations. They look evil, evil, since they are stashing their profits into Tax Havens instead of paying their dues.

This is, again, "selective" journalism. The problem is that the vast majority of corporations incorporated in Tax Havens are small potatoes that are not "front page" material. The problem is that all the small corporations exist for various reasons, many of which are simply insurance against lawsuits or other types of aggression. Many of these corporations do not have million-size profits, but thousands which they defend against and insatiable government as best they can. But again, this is not "front page" material. And so the few mega corps that got caught in the net are vilified and equated to all tiny off-shore corporations. This is nothing but character assassination by comparison.

But it gets worse. Even those mega corporations caught in the net, have excellent reasons to save some money in Tax Havens. To begin with, it is their money. Governments can't seem to understand the difference between a person's property and a government property. Taxation is thievery, nothing less (see The Illogic Of Taxation Thievery At Its Best).

Then we have the so-called issue of profits not trickling down to benefit people. Of course, this is an exceedingly stupid argument. People have this stupid idea (encouraged by politicians) that when money ends up in Tax Havens somehow that money leaves the economy. It's the Scrooge McDuck savings theory. People believe that somehow money in Tax Havens ends up as physical bills or gold or precious stones being locked in safety deposit boxes. In reality, nothing can be further than the truth. Tax Havens are simply banks. Banks cannot afford to have money sitting idle. Banks loan that money to whoever needs a loan. Money that gets into Tax Havens does not leave the financial or economic system, it is part of it. The only difference is that it is not part of the tax system, which is a gigantic advantage. How is this possible?

Simple. Taxes will be spent on consumables, minus the government cost (this is, the amount of money all government syphon out of taxes to pay for their salaries and boondoggles). Once taxes are spent in consumables, they do very little to aid the economy. On the other hand, if that money is lend to companies, these companies will use it to increase production which will increase our standards of living. Taxes are always bad for the economy.

From this, correct, perspective; these corporations are heroes. They are fighting the government from destroying useful capital.

Of course, not all money in Tax Havens ends up as productive capital; some ends up a un-productive capital, also called loans to governments. But, then again, if there would be no governments, there would not be any place where corporations could place their money that would not be productive. It is the existence of governments that allows capital to become un-productive!

Rich people

The third category of "targets" are rich people. These bastards, always stashing their money in places where the government can't get it. But rich people are so precisely because they are good business people. The money they place in Tax Havens ends up as working capital in the same manner as corporations' money is. There is no difference!

Conclusion

And so, at the end of the day, once we analyze and look closer at what's really going on and who is doing what, we end up with the same conclusion we began with: people placing money in Tax Havens do so for self-defense, as a last resort and this has the added benefit of improving the economy! Yet, because these processes are not vote maximizers, politicians can't tolerate them.

STATISTICS

There are plenty of meaningless and stupid statistics that are taken out of context all the time. For example, certain addresses in the Tax Havens are the formal seat of thousands of corporations. The horror!!!

Well… so what?

There are legal firms in New York that have thousands of corporations as clients and nobody seems horrified. There are thousands of corporations with headquarters in downtown Kuala Lumpur and yet this does not seem to be a problem, but an advantage that the government promotes. There are thousands of small corporations that market their shares through a single Over The Counter organization and yet, this is applauded by everybody. Hummm… can you see a double standard at work here?

Certain banks in the Caribbean hold thousands of accounts. The disgrace! Yet, every bank in US or Germany or Japan or Russia an even Switzerland would kill to have this kind of volume. Why the sudden discrimination against the Caribbean? Wouldn't it be because they are easy targets? Besides, what's the problem if the bank is small? Nowadays is not the size that counts, but the IT capacity in it. It is all electronic. So, what's the problem if such a bank does not have a monstrous building in show of status? Who cares! The bank is serving its customers and the customers are happy. Nothing else is required. The double standard at work yet again.

CONCLUSION

Tax Havens exist because politicians insist in keeping their jobs at our expense. Governments are the biggest bullies in the block and people have the right to self-defense; particularly financial and economic self-defense. Furthermore, Tax Havens actually aid the economy by removing capital from useless goals (such as feeding government spending accounts) and re-directing it towards productive endeavors, which happen to benefit the whole of humanity. This is the reason why Tax Havens are liberty's last bastion. This may not be the politically correct point of view, but it is, nevertheless, the economically correct analysis. In any case it is your choice and yours alone to believe it or not.

Note: please see the Glossary if you are unfamiliar with certain words.