Sovereign Investor – The Real Reason the Left Hates Tax Havens

From The Sovereign Investor (September 25, 2013)

The late, great George Orwell aptly described an all-powerful, controlling government as “Big Brother” – in the worst sense of the phrase. For those pungent words, and many others (“thought crime,” “doublethink,” “newspeak,” “Ministry of Truth”), we are in his debt.

He also warned us that: “Political language … is designed to make lies sound truthful and murder respectable, and to give an appearance of solidity to pure wind.”

In an example of what might be called “breaking impure wind,” for the last 20 years the offshore financial world has seen the once-acceptable phrase “tax haven” – denoting legally reduced taxes – transformed into a synonym for tax evasion, money laundering and corruption.

Now that it’s clear that the anti-tax haven campaign has reached a crossroads that raises a valid question: When is a tax haven no longer a tax haven?

A proper answer will expose the fact that from the beginning this has not been a moral crusade against multiple bogeymen, but rather an official grab for ever more onerous taxes worldwide.

Last week, in the British House of Commons, Prime Minister David Cameron specifically praised the steps taken by the United Kingdom’s Crown dependencies and overseas territories with regard to transparency and tax fairness. In fact, he doesn’t believe it’s fair to classify U.K. territories such as Jersey and Isle of Man as dreaded “tax havens.”

In stark contradiction, only days before, the tax-hungry Socialist government of France announced arbitrarily that it had added Jersey, Bermuda and the British Virgin Islands to its list of so-called “uncooperative tax havens.” French tax law applies some of its harshest tax rates on investors from countries deemed to be uncooperative.

This contradiction lays bare the underlying, concealed premise of all this anti-tax haven blather. What the high-tax countries, such as France, and the political Left really want is an end to tax competition among countries.

Beginning in the 1990s, the social welfare states of Europe, joined by the United States, mounted a campaign portraying tax havens in general as a vast sinkhole of tax evasion and lost revenue.

The usual suspects pushing this line included a diverse group of deficit-spending governments and their fellow-travelers, including the European Union, the Organization for Economic Cooperation and Development (OECD), the Financial Action Task Force (FATF) – and even the United Nations.

At various phases of the 25-year anti-tax haven campaign, this cabal latched on to any and every issue to try and tie tax havens to them – the U.S. “war on drugs,” money laundering, and after September 11, 2001, “terrorism.” Tax havens, not the big banks and government stupidity, were even ridiculously accused of causing the 2008 global financial crisis.

Because of this smear campaign, legitimate offshore jurisdictions once billing themselves proudly as tax havens, now universally wish to be known as “offshore financial centers.”

The unintended consequence of this malicious defamation movement has been wholesale “reform” of all tax havens, so much so that Prime Minister Cameron could vigorously and truthfully defend them at the G20 summit in St. Petersburg last month. (France, please take note.)

The widely respected Economist magazine confirmed the important role offshore financial centers play in world finance. These “reforms” have occurred not only in U.K. financial centers, but in many others, including Panama, Uruguay, Singapore, Hong Kong and the Cook Islands, offering more and better alternatives to those looking to protect their assets offshore.

They all have adopted the OECD Article 26 standard for tax information exchanges, signed multiple Tax Information Exchange Agreements (TIEAs) with the United States and other countries, strengthened anti-money laundering laws, and updated financial privacy and banking secrecy law to permit legitimate judicial requests.

The Sovereign Society has consistently supported tax competition because it forces all nations to keep taxes lower than they otherwise would. Our friend Dan Mitchell of the Cato Institute provides an excellent video discussion on tax competition and its many benefits.

In my new seventh edition of Where to Stash Your Cash Legally: Offshore Financial Centers of the World, I give you the latest information about offshore financial centers where you can safely create asset-protection trusts, private family foundations, open bank and investment accounts, even obtain second passports, complete with all needed contact information.

Ignore Big Brother and obey your survival instinct instead. Offshore is still the place to be for asset protection and sound investment opportunities.

Faithfully yours,

Bob Bauman JD
Editor, Offshore Confidential

– See more at: http://sovereign-investor.com/2013/09/25/the-real-reason-the-left-hates-tax-havens/#sthash.OQSPoogW.dpuf

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