dbd33

While I accept that to be true. I think it adds a edge to the thread, indeed to the board, that isn't really justified. All here have fled to the colonies for reasons of personal greed; no one moves to, say, Mississauga, for the scenery. If we were good people we would have stayed at home and worked for the benefit of the nation, tried to save it from the evils of the likes of Thatcher and Johnson. To suggest that the exploiters of tax havens, say the Aliyev daughters or Sani Abacha, are somehow worse people than the average poster is, I think, an unreasonable stretch.

Finknottle

Close, but I don't think 8 year olds are sent to prison!

Gordon Barlow

That's the reputation, certainly, but one should always bear in mind that Britain (the UK) and its offshore colonies control most of the world's offshore tax-havens and always have done - never mind which political party is in power. The UK government vets every law the havens pass. And, the City of London itself is a tax-haven, in some instances. Every UK politician, and every UK tax-advisor (lawyers, accountants, etc) knows that. Your favourite of the moment knows it, however fervently he or she claims not to.

Two short stories... In my first week in Cayman in 1978, an American minion walked into my office with a suitcase full of US currency notes and said it must be put in his boss's bank account. I knew enough not to touch it, but phoned a very highly respected UK bank's local office, who said "That's OK: send him down". Second story: a man from Cayman on a business trip to Brazil, was warmly welcomed at a Chamber of Commerce lunch in Rio. "We're delighted to meet someone from Cayman. You're our #1 supplier of oil, you know."

Now... we have plenty of sand here, but it's the wrong kind of sand! Not a drop of oil in it.

Gordon Barlow

The thing is, Jingsa, that most people minimise their taxes if they can do it without breaking the law. There are hundreds of ways to do this without involving overseas tax-havens.

We in those tax-havens are not the slightest bit interested in helping people break the laws of their home countries. We professionals don't deal with amateur tax-dodgers. They're a pain in the neck. We deal with their domestic tax-advisers, and if they don't have one we send them away to hire one. The advisers deal with their domestic politicians, and persuade them to allow loopholes in the domestic tax-laws. Any tax-adviser (lawyer, accountant) could identify and close those loopholes in a week, if they were invited. But a) it's not in their best interests, b) it's not in the best interests of their clients, and c) it's not in their tame politicians' best interests.

My story about Brazil's oil-imports is simplistic but typical. The oil-drillers sell the raw product to a company in some zero-profits-tax jurisdiction, and that company marks it up and sells it on to a Brazilian oil-importer. Easy peasy.

Gordon Barlow

There's one thing I need to clear up about offshore tax-havens... we do pay taxes, and plenty of them. Just, not on incomes or profits. I myself detest taxes on those two things. In my time with the Chamber of Commerce here, my directors and I had the overwhelming support of the voters in opposing a plan to levy an income-based tax. (That opposition cost me dearly. I was denounced in the local mini-parliament as a "subversive", and have been denied full civil rights ever since. On a personal level it was a terrible mistake, but, well, sometimes, what can you do?)

No offshore tax-haven is tax-free. How could it be? Our politicians have to have some money to play with! Luckily for the havens, there are plenty of companies in the world who rather like the option of avoiding tax on profits, and who look around for places like Cayman. Bully for them! It may be greedy, Jingsa, or it may just be sensible business practice.

dbd33

I believe the customary phrase is "the unacceptable face of capitalism".

Gordon Barlow

dbd... If you're saying that the unacceptable face of capitalism is minimising one's taxes to the extent permitted by law, then I think that's a bit harsh, even from a socialist point of view! After all, socialism doesn't actually encourage people to pay more tax than the law requires, does it?

My personal position is, "that government is best that governs least". A pox on all taxes except those that are more or less voluntary - sales tax, and that sort of thing! (The more expensive the item, the more tax one pays. That seems fair.) Taxing incomes is a wicked thing to do, and I don't know how you can defend it. I'm a strong believer in personal freedom. Does that put me in the capitalist camp? Maybe it does. But in my view, taxes on income are the unacceptable face of socialism.

Almost Canadian

How do you propose infrastructure, schools, hospitals, roads, etc, is paid for?

Gordon Barlow

One question, requiring two questions in response.
1. Could some government activities be severely reduced, so as to minimise the demand for taxes? Answer: yes, chop the defence appropriation. British governments could abandon their thirst for wars of aggression. Britain hasn't been invaded since 1066, while itself invading half the world since then. (I include both World Wars; Britain declared war on Germany, both times.) All its wars have been unjust, unnecessary and immoral.
2. Could some other taxes replace the tax on incomes? Answer: yes, by increasing the tax on dead people. That would be just, and moral, and probably necessary to maintain a fair society. The present death-duty rules allow rich families to stay rich while keeping poor families poor. I've been told that roughly half the families in England have never owned their own homes. Never ever!

What else have you got for me?

Jingsamichty

I took heed of dbd33's note about introducing an unnecessary edge to this thread by bristling against tax avoidance. But I can't let it go, and quite frankly the thread/board will benefit from any spark of life so let's go indeed...

I have previously taken advantage of tax minimisation schemes that were available to me - as you say, you'd be a fool not to. Nonetheless, that doesn't mean that such schemes are to be celebrated as you seem to suggest. We should acknowledge them as loopholes which unjustly benefit a minority, often to the detriment of the majority. Celebrating not paying your way is a shameful thing, no different to being proud of not having bought a round after a night in the pub with friends.

However I fully agree with your position on inheritance tax, if you are suggesting full state forfeiture of undivested assets on death, provided always that any such divestment be fully exposed to any legislated taxation and not shielded by loopholes. This enourages money/assets to be recirculated during a person's lifetime instead of being hoarded and of no real use to the day to day economy.

You haven't addressed A_C's direct questions though. Assuming a government is elected by the people to provide infrastructure for the people, why do you think it has the right to not provide these things, to the standard people think reasonable? I accept that such a government might not be in line with your idea of the best government (per your post #277) but if it is democratically elected to deliver good infrastructure then it has no right to try to minimise expenditure just to suit people who think taxes are a pox.

Gordon Barlow

Just a quick correction here, Jingsa... I would never say - and didn't say in my post - that a democratically elected government "has no right" to do anything. It does have the right to do anything, however obnoxious. Secondly, I didn't say - and would never say - that "taxes are a pox". Some taxes are - and I believe that income tax is one of them. But it wouldn't make any sense to abandon all taxes! What I said is that taxes - and the money they raise - should be minimised. And I have pointed out earlier, that the opportunities for minimisation are actually written into every law that politicians pass. Hence the plethora of offshore tax-havens!

Almost Canadian

Well. That is a political question: What should the taxes imposed be spent on?

I find it a stretch to suggest that Britain's involvement in both world wars was unjust, unnecessary and immoral. I'd suggest that lots of those living in countries invaded would disagree.

What level of inheritance tax? 100%, 80%, 50%? How would that work in practice? If I die, does my wife, from my estate, have to pay the tax on any amount imposed on my "share" of any asset she needs to continue living (i.e., our house)? What about any dependents one has? If the government to take money from me just to redistribute it to them?

Finknottle

You raise a good point about dependants, however it shouldn't be too difficult to come up with a regime that protects them accordingly. Putting that to one side it makes absolute sense that inheritance taxes be taken to finance health care, etc. My Mother's estate incurred a small amount of tax, but a substantial amount was left over, that which was free of tax plus that sum net of tax (UK regime). My Mother had a stroke some 12 years before she died and this along with many other health problems during her years meant that a considerable cost was incurred by the NHS. Tsking a much larger slice would have been perfectly reasonable, in my opinion - and I speak as a beneficiary!

Gordon Barlow

A fair point, AC. BUT... wouldn't it be immoral for any government to compel my son to risk death or mutilation, just in order to save some young Pole or Belgian from the chore of learning to speak German? That's what most tribal wars come down to. How many young Frenchmen in Verdun (for instance) died unjustly, unnecessarily and for no moral reason? As a general statement, wars only rarely result in the slaughter of conquered peoples. And usually, they don't even have to learn their conquerors' languages.

Almost Canadian

I don't disagree that wars are all about personalities, rather than citizens.

These days, I doubt that people would react to conscription the way they did in both world wars.