“Singling out tax havens as the culprits behind tax flight is out of date, for two reasons. First, the days when a Caribbean island or a European principality could flourish purely as a hiding place for illegal cash are fast disappearing, as our special report in this issue explains. Thanks to international campaigns against money laundering and illegal tax evasion, today's successful tax havens thrive not because of crookery, but because they are well run and well regulated.
Second, tax competition nowadays is mostly about big countries competing with each other. With capital mobile and economies increasingly interlinked, money will continue to move to places where costs, including taxes, are low. Preventing this means either harmonising taxes (a genuine threat to sovereignty) or clamping down on nations, even big ones, that have the gall to streamline their tax systems. This would be ruinous to trade and, in the end, futile: new low-tax centres would emerge as soon as old ones were squashed.”
Related;
Listen to audio interview with the author of the survey
Offshore Financial Centers (OFCs):IMF Staff Assessments
Offshore Financial Centers- The Role of the IMF
“Tax Evasion, Tax Avoidance and Development Finance”, by Alex Cobham, Oxford, Working Paper No 129, September 2005
Capital Mobility, Agglomeration and Corporate Tax Rates: Is the Race to the Bottom for Real?
“Why Have Corporate Tax Revenues Declined? Another Look”, by Alan Auerbach, University of California, December 2006
Further Reading
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