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Poor Persecuted Billionaires. Fun Things to do with Six (or is it Eight) Trillion Dollars – an Epilogue

February 27, 2015

richguy

I must stand corrected.

Forbes Magazine, a publication with access to far more information regarding the whereabouts of money than I can lay claim to, has declared that the amount of offshored untaxed capital may well be 32 trillion.  Not 24 trillion as I’ve been assuming.

That means that all of my “fun things to do with six trillion dollars” fantasies should in fact have been “fun things to do with eight trillion dollars.”  This means more diseases thwarted, more space elevators, more opera houses etc. etc. etc.

However, Forbes Magazine has a novel attitude to the problem of offshoring – and you can read it here.

http://www.forbes.com/sites/ericjackson/2012/07/24/the-global-elite-may-be-hiding-32-trillion-in-offshore-tax-havens-but-the-best-solution-may-be-to-lower-their-tax-rates-instead-of-raising-them/

The Forbes view of the problem is that piratical criminality can be thwarted by being nicer to pirates.  Forbes says that if governments were less mean to the mega rich then the mega rich wouldn’t feel compelled to cheat so much.  If the tax on the mega-rich were reduced – they’d stop hiding it.

It would be interesting if this approach to law and order were applied to other crimes.  Avoid being punched or stabbed by muggers by waving your wallet over your head with a loose grip.  You’ll find your mugging far less unpleasant.  Traumatised by burglary?  Next time, just leave all your valuables out on the front lawn – and you’ll never again experience the violation of a forced entry home invasion.

Even if Forbes’ attitude weren’t about as unprincipled and supine a response to grand larceny as you can imagine – there is a more practical problem with their reasoning.  Forbes goes on about France, with its 75% top tax rate.  Perhaps 75% is harsh or perhaps it ain’t – but for Forbes to be making any kind of point, they would have to be able to demonstrate that capital is flowing out of high tax economies like France into lower tax economies like the UK.  This is not what is happening.  Capital is flowing out of “Any Tax” regimes into “No Tax At All” regimes.  “Punitive” tax regimes are purely notional if unenforced.

The fact is that the Lords of Offshore are passionate about their piracy.  Their hatred for the idea of rule of law is absolute and they assert the absolute right to benefit from public resources while giving nothing whatsoever back.  If they can possibly avoid it.  It doesn’t matter how generous a nation state’s top rate tax might happen to be.  Pirates will always want to bury their doubloons in a big hole in the Caribbean.

pugwash

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