Libertarians and Conservatives remain silent on tax havens
Dear Alistair Darling,
Watching you and the other major world finance ministers struggle to agree on the agenda, let alone any solutions, for the G20 summit next month is truly hilarious. Gordon Brown has pinned all his hopes on kidding himself and voters that this summit will somehow signal the end of the economic crisis and send his poll ratings sky high. While I suspect his optimism will not be rewarded, his attack on tax havens puts you in an interesting position. The opposition to such a move has been effectively zero, which made me think that you might have stumbled across a rather intruiging policy.
The question that jumped into my head was: does anyone agree with tax havens? I mentally went through a list of our political parties and groups to see what sprang to mind:
LABOUR – seeing as the current incarnation of Labour despises rich people just like the good old days, Labour supporters will be delighted to see you shut down tax havens. Even the Blairites would probably come on board with this one, knowing the political capital at stake.
CONSERVATIVES – seeing as Conservatives traditionally respect the rule of law and tax havens are ripe for tax evasion, you would think that Cameron et al would support this policy too. Whether any rich Conservative benefactors make good use of the tax havens remains to be seen, but Cameron’s decision not to challenge you makes me think you have a clear run.
LIB DEMS – let’s be honest, they love taxing the rich as much as Labour do. Their website manifesto expresses their “support the widest possible distribution of wealth”, meaning that punishing the rich is definitely on the table. Clegg and Cable has also expressed their desire to shut down tax loopholes in the past.
GREENS – the lunatic Lefties will certainly want to see an end to tax havens, presumably to help fund some national tree-hugging schemes.
UKIP – no-one knows.
BNP – no-one cares.
LIBERTARIANS – their love of freedom and their hatred of governmental interference might tempt libertarians to oppose such a move, but I don’t see how that could work. Even the most extreme libertarians believe in the government upholding the rule of law, and when tax havens are used for tax evasion and several other dubious activities, I find it hard to see how even the most anti-government thinker can possibly stand in the way of a crackdown on dodgy practices.
In effect, you have stumbled across a policy that would have been unthinkable just a couple of years ago but now seems emminently realistic. Of course, there is the minor matter of national economies such as Switzerland being hit badly by such measures, but I seriously doubt that they could stand in the way of a concerted international effort to wipe out tax havens. Even Switzerland has recently signed up to the OECD’s rules on bank secrecy after coming close to being put on a global blacklist of tax havens, with Austria, Luxembourg and Belgium having since joined Switzerland, Hong Kong and Singapore and others in a worldwide agreement to exchange tax information on request and subscribe to the OECD principles about the exchange of tax information. To cut a long story short, you are unlikely to face any serious political opposition to a full-blown assault on tax havens. With David Cameron calling for more social responsibility from companies and Gordon Brown dragging the government back to the Left, this might be the best opportunity for a generation to destroy the tax havens that have provided sanctuary for too many people for too long.
Yours sincerely,
A.Tory
I think if the Conservatives want my vote they are going to have to speak up alot more than they are at present.
Each new stealth tax and ridiculous database scheme that the Labour Party intends bringing out to subjugate the electorate seems to pass by unnoticed by the Conservatives.
What have they said about this new travel database – NOTHING!
Do they opening denounce the stealth tax on booze – NO!
I’m hardly an expert on politics, I’m just an ordinary voter but even I know that an opposition party is supposed to OPPOSE the current government on policies it thinks are ridiculous or unfair.
Unless of course they agree!!! In which case I won’t vote Conservative either!
Labour don’t despise the rich, they are the rich!
I don’t know whether I qualify as a Libertarian (or whether you need to “qualify”…), but my view is quite straightforward.
Our own laws should reflect a fair and balanced approach to taxation, as we see it. The laws of other countries are for those countries to decide; they may have a different view.
I’ve wet myself laughing at El Gordo’s pronouncements on tax havens. He always talks about foreign ones – evil Switzerland or the naughty Caymans – when in fact most of them, I believe, are under current or former British Dominion.
And then there are the two I really laugh hard about: Jersey and Guernsey. Funny how we get our own tax havens and they remain unremarked. British tax havens for British millionaires, eh?
works until you realise that the City of London is at the centre of a big tax haven. Politics has a habit of biting you in the bum!
I have long wondered why we don’t set up a ‘tax haven’ in Liverpool or Newcastle. It might influence some big businesses and some big money up to the traditionally ‘difficult’ North of the country, and could help rejuvenate the economies up here and help people up North find work. Financial and internet work is location-independent nowadays, after all.
I’m sure there’s a flaw in that somewhere that I haven’t figured out yet, though, because otherwise we’d do it, wouldn’t we?
I know, it does feel a bit like Switzerland are the source of all evil, despite the fact that he could pop on a ferry to visit our own little tax haven.
That said, is anyone going to challenge the potential success of these plans? Now that tax havens are already being forced to spill the beans on who holds accounts there in the name of preventing tax evasion, surely the cat is out of the financial bag now?
As a Geo-Libertarian/Friedmanite, I’m not bothered about tax havens. The only tax we should have would be land value tax and other licence fees and user charges for UK based land, radio spectrum, landing slots at airports, fuel duties to pay for roads etc and you can’t evade those, because you can’t take land etc abroad.
To the extent that we also have Milton Friedman’s second least bad tax as well as LVT, i.e. a flat tax on all incomes and profits, you can easily prevent income being shuffled abroad by having withholding tax on payments of interest etc to overseas (which we already have, subject to various exemptions).
As patently says, it’s up to other countries to have tax systems as they see fit, overseas income shouldn’t be submitted to UK tax.
Libertarian approach = ‘Blow you! I’m alright Jack’.
Libertarian approach = ‘Blow you! I’m alright Jack’
Labour’s approach = ‘You blow me! Ahhh. NOW, I’m alright Jack.’
Interesting ideas, Mark. I know you’ve been supporting LVT for quite a while, judging by your blog!
EV and Shaun, thanks for your useful and insightful contributions to the discussion.
More seriously, I’m a social libertarian but I still believe in the rule of law; the analogy with drugs is fair because I do believe they should be legal and, if we want a low-tax environment, we can’t do an Amsterdam on it. We can’t induldge in a ‘Dutch dilemma’ where we KNOW people are shuffling dodgy money around but we WONT look (e.g. Jersey).
As a libertarian, I oppose such blind-eye systems as they are vulnerable to capricious abuse. Should we have tax havens here, in the UK? Hell no (unless someone can tell me a rock-solid intelligence reason for it). Should we aim for lower taxes *legitimately*? F*ck yeah!
I’ll repost as LFAT hit delete by accident!
LFAT, I’m not going to defend tax havens per se, but I see no sin in legally avoiding tax wherever possible, in fact I regard it as something of a virtue.
As for illegally avoiding tax, I’ll roundly condemn that shortly after the government, politicians and the various publicly funded lackies, lickspittles and tax junkies get the concepts of fiscal responsibility and frugality drilled into them.
Until that glorious – and probably fantastical – day, I take the same stance I do with drug users, feel free to indulge, just don’t start crying when Knacker pulls you up for it.
@Shaun Pilkington
I agree on the drugs argument, I very much favour the adoption of how casino’s used to be – you took in evidence you were over 21, become a member of a club and the next day you can make use of it.
With the increases in alcohol planned – when VAT goes back to 17.5% the treasury has no intention of reversing the corresponding increase in alcohol duty – drugs are going to be increasingly more attractive as a cheaper alternative, so something needs to be done, and trying to contain what is essentially a personal problem isn’t ever going to work.
Splodginess Abounds will need to rename their most well known song to Two Pints of Lager and a Wrap of Coke Please at this rate.
Two Pints of Lager and a Wrap of Coke Please at this rate
What you think they’re made of money? Have you any idea how expensive two pints of lager is these days? FFS!
@Shaun Pilkington
Lol! I’m about to go find out the costs of lager
Pity I’m no longer a bitter drinker, the 99p offer at Wetherspoons is tempting!
Libertarian approach- The UK should be a tax haven