I have long argued that tax havens are bad for the world: they are used as the deliberate launchpad for attacks on the right of democratic nations to make their own decisions on the taxes they want to charge.
As Mancur Olsen might put it. Tax havens are good for the world: they are used as the deliberate launchpad for attacks on the right of stationary bandits to make their own decisions on the taxes they want to plunder from those they oppress.
They don’t attack the “rights” of any nations to charge any taxes they like. They just help show the consequences of charging stupid greedy taxes.
But a lot of these tax havens are democratic nations. So what Murphy’s saying is:
We must attack the right of democratic nations to make their own decisions on the taxes they want to charge in order to stop their attacks on the right of democratic nations to make their own decisions on the taxes they want to charge.
Given his propensity to pop up in numerous media and the vast number of subjects he chooses to pontificate on of which he has very little knowledge (a category that includes many subjects, among them tax havens, despite what that famous stool pigeon, Lawrence of Beria contends) would Murphy not be at least in one sense a ‘roving bandit’ rather than a stationary one?
I still very much admire Murphy as a fabulous con-man making a very good living from his bullshit.
Even better he is fleecing almost exclusively lefties. Unfortunately some serious proportion of the lefty money is probably taxpayer money.
I wonder if Tim’s ire is not partially motivated by unconscious jealousy. Tim is honest and writes honestly about economics and probably makes much less money from it than the con-man. Not to worry Tim, it’s just that we on the right are more tight fisted.
You make the same mistake as most others on here. It is not the levels of tax that are a problem. If those countries want to inflict zero tax on their populations and make the standard of living unaffordable for them, then that’s their issue.
The problems arise from the international nature of the finance industry as a whole. Those countries can make their laws in such a way that exploits the loopholes in others’ tax laws.
In that way they begin to create situations where those countries from which taxable profit is shifted have to respond to those external triggers. You may well like that and see it as a restorative, but effectively it’s an act of aggression.
Meanwhile, as noted in Jersey, the local populations’ of these jurisdictions are starting to see their societies fraying after merely a few decades of the game.
I’m astounded that libertarians can speak sop lightly of what is, blatantly, regulatory capture of governments.
I’ll repeat what I said last time.
When the UK legalised abortion (and leaving in place “loopholes” that, for example, permitted Irish citizens to take advantage by jumpng on a ferry), was that a similar act of “aggression” against the Irish Republic?
@Arnald “In that way they begin to create situations where those countries from which taxable profit is shifted have to respond to those external triggers. You may well like that and see it as a restorative, but effectively it’s an act of aggression”
So a country that increases taxes is fine and hunky dorey and the world should rejoice and just accept it but woe-betide a country that reduces its taxes because they are evil and aggressive and something must be done to stop these (in many cases) democratic countries. Perhaps we should start shelling them until they put their taxes up?
Or maybe some countries seem to do fine without taxing business to hell and back and you just don’t like that?
The problem Arnald and all those lefty morons have is that a socialist/communist system cannot survive unless it is imposed on everyone by force, whereas a liberal (in the bastiat sense) system is perfectly capable of thriving next to it.
Lest we forget, the Berlin wall was not there to keep people out.
Where have I said any of that?
The situation is quite different and anyway can trump that easily by asking if you would support Apartheid because the rest of the world were exerting pressure on SA to give it up? I think most people on here probably would, but that’s par for the course. The argument holds.
The situation is different because the democratically mandated taxation is a necessity of the functioning society.
Legalised abortion is a function of human rights. Come on FFS you know this.
Or again maybe you don’t. It’s not my fault you are so blinkered
@Arnald “democratically mandated taxation is a necessity of the functioning society”
So the democratically mandated taxation systems of Switzerland, Luxembourg and Ireland are something to rejoice about?
Or are democratically mandated tax systems only OK if you and Richard Murphy approve of them?
Where has anyone said about raising taxes?
It’s about the artificial regulatory constructs designed by the legal/financial entities that operate between jurisdictions, that makes ensuring the fields are level for all.
Supporting secrecy jurisdictions is to support piracy.
However, if that government is mandated to keep, say, a social service running and the only way to do that is by increasing a tax, then what’s the problem?
What have you got against democracy?
No, people here wouldn’t be supporting apartheid.
Generally, people here are in favour of liberty and against denying people rights.
Setting a lower tax rate than another country is an argument of liberty.
They can have whatever tax rates they like. It’s the structures of companies and the way they are able to use the differences in regulations between jurisdictions.
The argument with the rate of taxation can only happen because those fundamental issues are not tackled. Thus a jurisdiction announcing a rate which cannot be viable if that jurisdiction was not gaming the global systems becomes an aggressive move.
I can’t believe that the standard bearers of free markets support these obvious barriers.
Nobody says it isn’t.
@Arnald “What have you got against democracy?”
I’m a big supporter of the democratic rights of Swiss, Luxembourg and Irish citizens to democratically vote in governments that think low business taxes are a good idea.
Just as democracy allows companies to site business where they like.
“However, if that government is mandated to keep, say, a social service running and the only way to do that is by increasing a tax, then what’s the problem?”
No problem. Let them do it. But if business want to move to lower tax jurisdictions and people want to move out why shouldn’t they? Isn’t that democracy too?
Once again you are big on the democratic rights of countries to have high taxes but don’t seem to accept that other countries have the same rights to have low taxes and people have the democratic right to go to those countries if they want to.
It boils down to the likes of you and Murphy wanting to be the arbiters of what democracy should be allowed to do.
@Arnald “They can have whatever tax rates they like. It’s the structures of companies and the way they are able to use the differences in regulations between jurisdictions.”
Which pre-supposes that some of these differences are ‘right’ and some ‘wrong’ and, surprise, it’s you that wants to be able to decide which is right.
Maybe the Swiss and Irish ideas are right and the UK’s are wrong?
Of course, “regulatory capture of governments” would, in the usual terms, mean the capture of government policy by the regulators, usually on behalf of the regulated or some other special interest group. See the wiki.
What is being complained about here is actually pandering of government (policy) to those who pay taxes, rather than any specific special interest group. There is little suggestion that the Bank of England or the FCA are pandering to the banks, and the usual suspects’ suggestion that HMRC are pandering to big business is their usual ignorance of the matters actually in discussion or even dispute. HMRC are applying the rules as written (whether UK or the over-riding EU rules), not as the usual suspects want them to have been written.
And, as the LHTD states, democratic nations get to make their own decisions. And these include their tax rules. And if they right them badly, so that the effects aren’t what they wanted them to be, they get to change them. Some of them even change them retrospectively, which is more than a little unfair.
Anyway, we’re not going to agree on this, we’re not going to change each other’s minds. I can’t be arsed to repeat myself a million times and I’m sure you’re glad of that.
Me and the wife have just got back from a boating holiday in Poole.
Yes I’d recommend it to anyone! Boom
Anyway, we’re not going to agree on this”
How can we when you are so obviously wrong?
You cite democracy as a totem which you claim means the democratic rights of some countries should over-ride the democratic rights of other countries.
The UK sets a high tax rate. Switzerland allows MNC groups, quite lawfully, to avoid that tax rate. You claim it is the latter move that is wrong. You refuse to accept it could be the former. Or neither.
It’s exactly the fact that the playing field is not level that we want to encourage. It’s not a bug, it’s a feature.
“The problems arise from the international nature of the finance industry as a whole. Those countries can make their laws in such a way that exploits the loopholes in others’ tax laws.”
Well simplify the tax rules then.
We as a country set our tax policy to suit another country just because they have incompetent politicians and administrators who can’t write simple laws and they shouldn’t need to set their policy because we have incompetents running the show.
Tax rules don’t have to be complicated just because you want a high tax regime.
The other benefit of simplified tax rules is it releases a lot of clever people from working on complicated tax work to something more beneficial to all of us, like creating wealth.
Not with arguments like that you’re not…:)
“just got back from a boating holiday in Poole ”
lovely part of the world…
BiCR – “preview” on another thread – yes, I thought it was just me..??
“Me and the wife have just got back from a boating holiday in Poole.”
Brave man sailing in these conditions. Did you cross the channel or charter?
Anyway, expensive place for marinas, I prefer to drop the hook in Studland, not withstanding the sea horses.
Bloke in North Dorset: Did you cross the channel or charter?
This is Arnie you’re asking: he walked!
“Thus a jurisdiction announcing a rate which cannot be viable if that jurisdiction was not gaming the global systems becomes an aggressive move.”
Don’t see why. It’s no different from uber offering an alternative to minicabs and black cabs. If they can make the cashflow work, for a reasonable period of time, it’s good business. If you’re arguing that states should allow for the effects of their laws on all other nations, that’s the EU basically sunk.
Arnald thinks it’s an act of aggression when McDonald’s lowers the price of a Big Mac to undercut Burger King’s Whopper.
He’s right. He’s also right that some tax regimes are designed to take advantage of the tax stupidity of others. Here in Canada our “lower than the USA” corporate tax was an intentional, and successful, attempt to get American companies to move head offices up here.
So I say long live tax aggression.
Doesn’t this mean that anyone other than the highest taxing country in the world is a tax haven and that for any given country anyone with lower company tax rate is a tax haven.
So Cameroon with a 38.5% company tax should be very upset with the U.K. Tax regime
Coming here to be drowned in a sea of logic, time and time again.
You have to admire his guts.
Preferably, while they’re spread out on a decorating table…
Just joking Arnie 😉
…asking if you would support Apartheid because the rest of the world were exerting pressure on SA to give it up? I think most people on here probably would, but that’s par for the course.
You’ve written a lot of stupid shit on this blog over the years, but this single comment must surely take the biscuit.
Most of the followers of Timmy’s blog are, at the very least, believers in the free market. Somewhere between many and most of us are either classical liberals or libertarians.
Even if we approach the question from a purely economic point of view, how could you start to imagine we’d be in favour of apartheid? What sort of special stupidity does that require?
The whole point/focus of free markets is that individuals get to decide with whom and on what terms they wish to engage in trade. If the State, in the form of legally mandated segregation orders, gets to decide with whom and on what terms I may engage in trade, then that state is not my friend and is to be opposed.
That is not an acceptable state of the, arm, State.
Given the fact that corporation tax raises the square root of bugger all in revenue, why should anyone care?
I support the right of democratic states to have different laws to other democratic states, even if I disagree with them. And I support my, and even Arnald’s, right to complain about laws they disagree with in the state you live in or elsewhere.
But then Apartheid South Africa was hardly democratic …
If government confined itself to maintaining the law and protecting its citizens, we would have a very attractive tax rate and more security to offer than the scattered islands and enclaves, plus money for charities of our own choice.