A to Z of Tax Havens
The United States Government Accountability Office has been investigating tax havens and found that 83 per cent of the largest US companies have tax haven/ secrecy jurisdiction subsidiaries. Following on from this, The Tax Justice Network, with the help of Alternatives Économiques in France and SOMO in the Netherlands, has just produced a new report, “Where on Earth”, with information that has never been published before. The study surveyed 97 of the largest quoted companies in the UK, the Netherlands and France. Of those companies all but one had tax haven subsidiaries. 99 per cent of the European quoted companies surveyed operate in tax havens. As in the USA, the largest user of tax havens in every country surveyed was a bank.
We are not shocked or even surprised. Through clever so-called transfer accountancy, profits can be made to disappear from places where taxes are high, and pop up where they are low. Given the present practice of taxing individuals and companies, this is precisely what anyone would expect if they gave the matter a moment’s thought. What is to be done?
The solution is in principle very simple. Taxation should be tied to the holding of land titles. Since a substantial proportion of these huge revenue flows consists of economic rent of land creamed off through the financial system, the ultimate effect of such a tax would be to pick up the income at source. The remainder would be collected through taxation of the land occupied by the super-rich who benefit from this game. Since they are not, on the whole, wealth creators, but are parasitic on the wealth production process, their departure for sunnier climes would deprive the country of “talent” it could well do without. This is not, however, a conclusion that it to be found anywhere in the material produced by the Tax Justice Network, who argue only for more regulators and investigators – an expensive and ultimately futile policy.
THE LIST
Andorra
Anguilla
Antigua and Barbuda
Aruba
Bahamas
Bahrain
Barbados
Belize
Bermuda
British Virgin Islands
Cayman Islands
Cook Islands
Costa Rica
Cyprus
Dominica
Gibraltar
Grenada
Guernsey
Hong Kong
Ireland
Isle of Man
Jersey
Jordan
Latvia
Lebanon
Liberia
Liechtenstein
Luxembourg
Macao
Maldives
Malta
Marshall Islands
Mauritius
Monaco
Montserrat
Nauru
Netherlands Antilles
Niue
Panama
Samoa
San Marino
Seychelles
Singapore
St. Kitts and Nevis
St. Lucia
St. Vincent and the Grenadines
Switzerland
Turks and Caicos Islands
U.S. Virgin Islands
Vanuatu
Sources: OECD, NBER, and John Doe