by Peter Macfarlane, Offshore and Non-Resident Banking Expert for Q Wealth Report
At last we are seeing some sense in the anti-tax-haven rhetoric being rehashed by the mainstream press. An interesting article by Richard W. Rahn in the Wall Street Journal sets out to defend tax havens and the useful role they play in the global economy:
If the government suddenly said you would incur more onerous and expensive tax regulations and reporting requirements if you moved your business to a low-tax state such as Texas or Florida from a high-tax state such as New York or California, you would be justifiably outraged. Now substitute Switzerland and Bermuda for Texas and Florida, and France and Germany for New York and California, and you’ll understand a new form of “tax protectionism” that is infecting Washington.
Tax evasion is illegal… surely there can’t be many people left in this day and age who would seriously believe that they could just open an offshore bank account in their own personal name, not declare it, and thereby evade tax. As you can see from reading publications like my Practical Offshore Banking Guide 2009, it is just a tad more complicated than that. And the vast majority of people I know who are offshore do so perfectly legally and in full compliance with the laws of their country of residence.
Of course, the best way to go offshore is to move yourself. That rather takes the wind out of the sails of fuzzy thinking leftists who try to argue that if you are living in a country you should pay for government services there (quite apart from the fact of whether you actually use those government services).
Moving offshore yourself is very practical these days for many entrepreneurs and business people, or even many retired professionals. They can do a little consulting or investing on the markets over the internet from a home office, fly back home once in a while to take care of those little bits of business that still require personal physical presence… and they can quite legally live tax free and stress free in a tropical paradise (or maybe a clean air mountain paradise like Andorra if that is more their thing.) That’s what we have been preaching for years here at The Q Wealth Report.
The current warpath being beaten by Senator Levin and his crew is flawed, as the WSJ piece points out, because tax evasion is already illegal. “It is a fool’s errand to pass ever more laws against things that are already illegal…” says Rahn. More tellingly, he presents evidence to back up his claim:
The chief tax writer in Congress, House Ways and Means Committee Chairman Charles Rangel, Treasury Secretary Timothy Geithner, and former Senate Majority Leader Tom Daschle apparently did not report all of their foreign-source income. Their actions tell us that either the tax law is too complex, or they thought the tax burden was excessive. Would their behavior and that of millions of others improve by making the tax law more complex and punitive?
Finally, Rahn leaves us with what is perhaps a chilling thought for the future of a collapsing US economy, or perhaps just an accurate vision of the future:
The proposals by Messrs. Dorgan, Levin, Baucus and the Treasury will almost certainly have the unintended consequences of driving more U.S. businesses elsewhere, discouraging foreign investment in the U.S., and actually encouraging more U.S. investors to move their funds (either legally or illegally) not only out of the country, but to places in Asia or the Mideast that tend to be less cooperative with U.S. tax authorities than are the European and British low-tax jurisdictions.
Well done to Mr Rahn and the WSJ for sticking up for beleagured tax havens. Here at The Q Wealth Report we will continue to inform and entertain our readers with practical information on how to move yourself and your money offshore, how to create a new stream of wealth with your new offshore business, and how to do everything within the law. Of course, our best practical “how-to” information is reserved for paid-up subscribers to The Q Wealth Report. Besides instant access to our downloadable reports on offshore banking and gold bullion investments, and the archive of previous editions of The Q Wealth Report, an individual consultation with Peter Macfarlane is included in the benefits of signing up. What are you waiting for? Join Q Wealth today!