The crackdown on international tax havens is worthwhile

Pro did not define a "tax haven." The common sense definition is also the one most often given in references: "A country offering very favorable tax laws for foreign businesses and individuals." http://www.investorwords.com... Seven other definitions provided on the web all are essentially the same http://www.google.com... I have no objection to tracking down stolen money or the profits from drug smuggling or other illegal enterprises. Switzerland, for example, cooperates in that while remaining a tax haven for legitimate enterprises. The resolution here is whether some countries should be allowed to have low taxes on money earned within their countries. Low taxes are relative, so that with respect to whatever country has the highest taxes, all other countries in the world are immoral tax havens subject to a crack down. Consider the example of billionaire investor George Soros. Soros is now a citizen of the United States. One the ways he makes money is to trade foreign currencies, essentially betting on whether a currency like the pound will go up or down with respect to another currency like the dollar. He moved the headquarters of those currency trading operation to Curacao, in the Netherlands Antilles, for tax reasons. http://en.wikipedia.org... Profits on the transactions conducted in Curacao are taxed at a very low rate. Curacao can afford to have the Soros trading operation in their country at a low tax rate because the trading operation consumes very few government services. The employees who live and work there will pay local taxes like everyone else to support community services, but the profits from the enterprise do not. (I'm not too keen on Soros' political view that the government should tax the whiz out of everyone but himself, but that is irrelevant to the functioning of tax havens and his proper use of them.) If Soros decides to bring the profits of currency trading into the US to invest in enterprises he conducts in the US, he will continue to escape taxes on the profits made on the Curacao enterprise, but he will be subject to any new profits made with the investments made in enterprises in the U.S. This is fair. Why would Soros, or anyone else, elect to invest in places with higher taxes, like the US, if they have established operation in a tax haven? He unquestionable does so. It is because higher tax places provide advantages for investments that require lots of infrastructure, like supplies of trained workers and large consumer and commercial markets. There is no danger whatsoever that all the fast food franchises, Walmart stores, and wheat farms will move to Curacao to take advantage of the tax structure. Thus the loss of taxes is extremely limited. Tax havens are no different than other countries, in that Country A is never entitled to tax work performed in Country B. Doing so would be a case of A violating the sovereignty B. The objection to tax havens is no more than that they have tax rates which high tax countries consider to be outrageously low. Tax havens have every right to practice the theory that more prosperity accrues from low tax rates than high tax rates. Tax havens serve as valuable competition to high tax companies. Economies can be taxed to death. An example is the French tax on wealth, http://www.washingtonpost.com... High taxes amount to transferring wealth from private enterprise to government. If high taxes and accompanying unbounded government translated to prosperity, then North Korea would be the most prosperous county on earth. It is not. Places like Hung Kong and Singapore thrived because of policies of low taxation. However, if high tax countries can successfully prohibit escape to low taxation, then there is no damper on destroying prosperity through excessive taxation. The world can be driven into lower prosperity without annoying counterexamples. In summary, the attempted crackdown on international tax havens is not worthwhile because: 1. It would kill profits that are eventually repatriated. 2. It loses very little revenue, because only a few types of transactions are economic in tax havens. 3. It is a violation of sovereignty for one country to tax earnings made within another. 4. It would remove an obstacle, by providing an escape, to high-taxes destroying the economies in high-tax countries. The resolution is negated.