Friday, April 01, 2011

Tax havens - even our fierce opponents agree with us

From Eduardo Morgan, a former Panamanian ambassador to the U.S., a staunch defender of Panama's (exceedingly dirty) tax haven status - and no friend of TJN:
Letter from Dr. Eduardo Morgan Jr. to the Director of the Centre for Tax Policy and Administration of the OECD, Jeffrey Owens

March 15, 2011

Dear Mr. Owens:

I would like to refer to your recent comments regarding “The End of Tax Havens”, published in the March issue of The International Tax Review.

It is hard to believe that you continue to talk about tax havens and yet you fail to acknowledge that the U.S., which is the principal member of the OCDE’s cartel, is the world’s biggest tax haven, according to the OECD’s own definition of the term. How can you continue to ignore the undisputable fact that the U.S. levies no taxes on the bank deposits, capital gains or other passive investments of nonresident foreigners? It is no secret that the U.S. does not provide information to foreign governments on bank deposits held by their nationals, with the exception of Canada.

continued . .
we obviously disagree with plenty that's in here, and it's economically illiterate to describe the OECD as a cartel (countries can't compete in any sense like firms in a market, though one can of course see why they use the term), and it's even more economically illiterate to lazily conflate competition between companies in a market (which is generally good, at least if it's on a level playing field) and competition between countries on tax (which is a totally different economic beast entirely - and a malign force in the global economy.) Also, he like many tax haven defenders slurs and blurs the distinction between legitimate privacy (which allows co-operation between tax authorities, to ensure their citizens get taxed appropriate) and the secrecy that mucky tax havens like Panama provide.

Still, he's put his finger on something profoundly important. As we've long argued, the U.S. is the world's biggest tax haven.


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