So our Nickie has teamed up with the NEF to do one of their \”Mythbuster\” series. as you might expect this series doesn\’t bust any myths, rather it proclaims them.
Here\’s the opening of the one on why tax competition isn\’t important:
A myth we\’re repeatedly told is that a country must be \”tax competitive\” in order to support a successful economy. It sounds so reasonable. We\’re taught that competition between companies keeps them on their toes and pressures them to produce better products and services, at better prices.
But here\’s the problem: competition between companies in a market bears no economic resemblance whatsoever to \”competition\” between countries on tax. They are utterly different economic beasts.
Theoretical arguments used to support tax \”competition\” between countries were first made in a 1956 paper by the economist Charles Tiebout. He argued that in a globalised world, people would naturally migrate to the countries with the most efficiently run public services for the least amount of tax possible. This would lead to countries \”competing\” with one another by running public services better and with less money, and everything would organically improve. But how many people do you know who will rip their kids out of school and flee to a foreign country as soon as it tweaks its tax code? It doesn\’t take a tax expert to see how silly this theory is.
I refute him thus: Lady Green.
And this is what is so damn fucking stupid about the argument that is being made here. The idiots at the TJN have just spent the last decade complaining that people, money and companies have been buggering off out of high tax jurisdictions and into low tax ones. Their response being that of course we should close down all of the low tax jurisdictions.
So, why would you campaign for a decade to stop people being able to bugger off if you didn\’t think that people do bugger off?
Their own actions for these ten years show that even they don\’t believe this tripe they\’re spouting as a \”mythbuster\”.
The rest of it is the highly selective and biased nonsense you would expect it to be.
And they don\’t even mention the major point in favour of tax competition: that by being able to bugger off a limit is put on the possible exactions of the State. Without that possibility of exit the bastards would rip us off even more.