Tax Avoidance: Is it a good thing?
Interesting article on low tax rates in different countries.
As has recently been witnessed in France, raise taxes to an unreasonable rate, and people leave for less hostile environments. Actually, it's not much different from anything else. Persecute people for religious beliefs, and they will leave for a more hospitable place. If there is famine or social instability, those who can will find a place with better chances of survival. Taxes are just one more factor that can make an environment hospitable or hostile.
One brief paragraph from the article:
So I try to educate them about the link between taxes and growth in hopes that they will understand that a vibrant economy also means a large tax base.
And I specifically tell them that so-called tax havens play a very valuable role since they are an alternative source of investment capital for nations that have undermined domestic investment with bad tax policy.
And I also explain to them that low-tax jurisdictions give companies some much-needed flexibility to maintain operations in an otherwise hostile fiscal environment. Letís look at that specific issue by reviewing some of the findings from a study by two Canadian economists about tax havens and business activity.
Worth the read.