INTRODUCTION
Lately it would seem that a deluge of websites pretend to keep selling us old and tired inaccuracies ( Taxes And Myths) that use machinations, disinformation and propaganda ( The Sweet Spot Of Taxation and The Illogic Of Taxation Thievery At Its Best) to convert us into slaves ( Taxed To Death No Just Into Slavery) thus forcing us to take measures ( The Smell Of Freshly Laundered Money) to protect our property against their insatiable drive to steal from us ( This Is The End). However, their most vicious attacks are always reserved for sovereign nations that have the balls to exercise their sovereignty ( Tax Havens Libertys Last Bastion) for the good of humanity (you, us and everybody else).
Basically, the case against tax havens is fundamentally flawed. It's no wonder that all socialists and communists are feeling threatened by people who refuse to allow being robbed by governments ( Socialism - The Most Addictive Drug).
Tax Maximization Lobbyists arguments are like an egg. There is a hard shell of technical-sounding claims, jargon and appeals to high principle. There is a white of intimidation presented as world-weary realism. And there is a yolk of perfect fiction.
ECONOMIC ACTIVITY
Let's start from the inside and work outwards, with the idea that significant economic activity does not take place in tax havens. It does. Tax havens like to pose as financial centres because that's exactly what they are. Ask yourself, what does a financial centre do? They provide a place of business where people with savings deposit their wealth with the intention of lending it to other people (for a fee) so that they may share their profits. It is a marketplace for money. These centres are useful because they provide a service (a one stop shop for capital) to entrepreneurs who are, after all, the source of all standards of living (remember, no entrepreneurs no products or services). How is the activity of tax havens different from other capital (financial) centres such as New York or London or Abu-Dhabi or Shanghai? Simple. Tax havens record transactions that take place in other economies, and do so in a way that is usually designed to frustrate the authorities in other countries from enforcing their laws and regulations designed to steal private wealth. In other words, Tax havens are more efficient than regular financial centres in channelling wealth where entrepreneurs need it the most. They do so by preventing governments from wasting (i.e. destroying) such capital before it can be put to good use. They have in fact better mechanisms for facilitating evasion and avoidance elsewhere, which is the exact protection that is required against the insatiable drive to steal from us exhibited by governments and politicians.
Tax Maximization Lobbyists (i.e. people paid directly or indirectly with your taxes) argue that tax havens try to convince us that because there's no universally accepted definition of what a tax haven is, no one can be accused of being one. This is indeed correct. There isn't one. There is no clear-cut definition of what a tax haven is or it isn't. This cannot be otherwise because such definition is dependent upon the definition of tax laws, which are, in ultimate analysis, purely subjective (The Illogic Of Taxation Thievery At Its Best). And so a definition of what a tax haven may or may not be changes all the time and it is subjected to the unpredictable whims of politicians. Strangely enough, Tax Maximization Lobbyists mysteriously forget to mention these stubborn facts. Some of them (e.g. the Tax Justice Network) go as far as to create a fancy index (e.g. the Financial Secrecy Index) that uses a raft of data from a variety of official sources to rank tax havens. Of course, such an index is pointless because it is based on ever changing tax laws. Not only that, their so-called methodology is highly unusual and we will provide a deeper analysis at a later time. They pretend that we can somehow measure the percentage of "tax haveness" a country may have. This is, obviously, ridiculous. This is akin to state that a woman is 65% pregnant. Either she is or she isn't. And no, this is not a theoretical point; it is very much a practical point. So much so that above-government organizations (such as The OECD A Bureaucratic Organization You Should Know) and governments themselves have lists of tax havens. A country is in that list or it isn't. There are no countries in-between those two lists. This fact in and by itself shows how ridiculous it is to attempt to "index" the property of tax haveness.
HUMAN RIGHTS
Tax Maximization Lobbyists further deny that tax havens safeguard basic human rights. Dan Mitchell of the Cato Institute declared that "there is even a moral case for tax havens. They play a critical role in protecting people who are subject to religious, ethnic, sexual, political or racial persecution". In fact, having your money stashed offshore does protect you from persecution. To say otherwise is ludicrous. Only people who have never experienced persecution can be so naïve (or disingenuous) to believe that one can protect oneself against persecution with equal efficiency and effectiveness with or without economic means. Think about it. If you are being persecuted you may change your name, location, you may travel, you may get plastic surgery, you may leave the place of persecution and so on. Basically you have the means to pay for all the goods and services you will need to avoid being persecuted. How exactly are you going to do this without money? Tax Maximization Lobbyists only show how desperate they are by putting forwards such ludicrous arguments.
BASIC RIGHTS
Tax Maximization Lobbyists also argue that since tax havens exist to protect property rights to the fullest extent possible, the impact on more fundamental rights is disastrous. They point, for example, to Christian Aid estimates that $160bn leaves the developing world illicitly via tax havens each year. They say that the right of the wealthy to guard themselves from hypothetical dangers must be weighed against the right of everyone else to secure the minimum necessary to sustain life.
This argument is, of course, ridiculous. Let's begin by stating that yes indeed tax havens exist to protect property rights to the fullest extent possible. That is their function. To prevent politicians and governments from stealing your savings and hence depraving the world from badly needed capital. Their argument uses a deceptive argumentative tactic called non-sequitur. This tactic is simple. Present conclusion B as if it would originate from argument A, when in fact it does not. They claim that the protection of property rights impacts more fundamental rights. The problem is that all rights originate in our property rights because our very first property is our body and everything else stems from this fact! If a system is devised to protect our property rights to the fullest extent, then it, by definition, protects all our rights to the fullest extent!
Of course, Tax Maximization Lobbyists conveniently forget this, the most basic principle, and they adopt the socialist view where "good" is defined "as what is good for society", not what is good for the individual. This is nothing but a watered-down version of communism (or communism-light) and we have all seen how well this worked in reality. It is not a theoretical point; it is very much a practical point. Communism brought nothing but the relentless, continuous and unwavering destruction of all kinds of rights as well as economic misery. Socialism is doing exactly the same but on a slow-motion and time-delayed fashion (see for example our Incompetence Socialist Index to illustrate just how much more wasteful modern socialist countries are when compared to the USSR as well as other measures in our Socialism Indices). The whole point of defending individual property rights is that through the action of individuals the whole of society benefits. This is so because in a true free market the only way to make money is through the fulfillment of other people's needs. This translates in a relentless increase in standards of living. The effects of communism and socialism are the exact opposite, although it is true that this fact is not yet visible in many countries because politicians are very good at hiding their debt games (to see just how bad things really are, see for example Happy Breakeven Year).
The idea that $160 billion USD is routed to tax havens every year brings us nothing but joy. This sum is nothing but a tiny drop of water in an ocean of waste. Take for example the $40 trillion USD (and counting) that the 2008 debacle has costed so far. All those trillions have been effectively wasted instead of being used as capital to increase our standards of living. In other words, tax havens managed to save from destruction less than 2.4% of what is wasted every year to paper over the consequences of the 2008 debacle. Or 1.6% of what is wasted every year in government inefficiency (see Much Salary About Nothing). What is not to like? If anything that percentage should be dramatically increased.
Tax Maximization Lobbyists also state that the right of wealthy people are "hypothetical". This statement is a puzzle. How exactly is the theft of property by governments "hypothetical"? Taxes are real, that's the whole point for tax havens to exist. If taxes would be hypothetical, nobody would bother with tax havens in the first place. How much disingenuous Tax Maximization Lobbyists can get?
Note: please see the Glossary if you are unfamiliar with certain words.
