Yet the OECD's list of 41 havens is made up mostly of small, poor states in the Caribbean. If the havens do not reform their laws so as to prevent this tax evasion, the OECD wants the rich countries to impose trade and financial sanctions on them. The dispute is analogous to the one over Internet taxes. In both cases, many governments have written tax laws they cannot entirely enforce. America's state governments often cannot collect sales taxes when residents make purchases from faraway vendors over the phone, through catalogs, or on the Internet.
National governments have trouble taxing overseas investments.
So in both cases, the frustrated governments want to have the ability to reach beyond their borders to make it impossible for taxpayers ever to escape their grip. The National Governors Association wants the states to form a sort of sales-tax cartel that would, taken to its logical conclusion, mean that wherever you go, your purchases would have to include your home state's sales tax. The OECD, led by Britain and France, wants an international tax cartel. Other governments want information on their citizens' investments here, and the IRS has issued some regulations to help those governments. This is nuts.