The real problem is high taxes and oppression. High taxes reduce the return to owners of capital and labor. Either way, the impact of high taxes is welfare-reducing. By implication, then, the impact of tax havens is unmistakably welfare-enhancing. This is information that political leaders need to have in order to make fully informed decisions about tax policy.
Full information is a sine qua non of efficient decision-making.
Key factors used by the OECD in identifying and assessing harmful preferential tax regimes include no or low effective tax rates, lack of transparency, and lack of effective exchange of information. It is ironic, if not hypocritical, that the OECD faults tax havens for their lack of transparency and lack of effective exchange of information while simultaneously doing its utmost to prevent an effective flow of information from taxpayers to politicians. Absent this information, taxes almost certainly will be too high. Rather, it is a mechanism designed to protect members of the OECD cartel. According to the organization s Web site, the OECD most importantly, provides governments a setting in which to discuss, develop and perfect economic and social policy.