Monday, November 08, 2010

Tax haven sovereignty depending on dirty money?

An interesting comment from Pasquale Valentini, Secretary of State for Finance in San Marino. Italy's drive to sanction banks and companies that do business in San Marino, he said,
"could lead to the end of the sovereignty of our state."
This issue is particularly ironic, given that the sovereignty argument is used, time and again, as a reason for retaining the status quo on tax havens: 'we can't defend against their tax haven operations because we can't interfere with their fiscal sovereignty.' And San Marino certainly has been hard at work assisting wealthy abusers of hard pressed ordinary Italian taxpayers, as AFP reports:
"No one knows it better than the taxi driver ferrying an AFP reporter past empty banks who, speaking condition of anonymity, said he has seen many customers walking out with suitcases full of money in recent months. "Everyone used to bring his money to San Marino," he sighed."
Let's make no bones about this. This is economic warfare. A jurisdiction has every right to set whatever terms or tax rates that they want -- for domestic purposes. But to purposefully create a framework of tax laws, secrecy laws, etc, which impact on the tax sovereignty of other nations is to engage in economic warfare against them.

Some 4.0 billion euros of the roughly 14 billion euros held in San Marino bank coffers have left the country since an Italian tax amnesty last year, AFP continues. It's hardly surprising that Italy is trying to defend itself. And San Marino is expecting sympathy? If this country can't pay its way without stealing money from other countries, then it doesn't deserve its sovereignty.

And now here is a really interesting snippet, from the end of the story.

"Simona Michelotti, head of the local chamber of commerce, said it might actually all be for the good as the majority of the population was against the state's reliance on "easy" money from the financial sector."

It's the captured state again. We see it in tax haven after tax haven. No matter what the population wants, the criminalised financial sector gets its way.


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