Lowtax Network

Back To Top

Your Lowtax Account

Goodbye To Privacy

Jeremy Hetherington-Gore Unleashed
09 March, 2008

These last two weeks have seen the 'offshore' tax haven of Liechtenstein in the pillory for trying to preserve banking secrecy, while governments around the world brazenly deal in stolen goods in order to pursue those of their citizens who have invested money in a 'no tax' jurisdiction.

There are some very slippery moral concepts here, and some that are not so slippery. Starting with the latter, we have to understand that States consider themselves to be above the law, and outside the moral structures that people are supposed to inhabit. It's therefore OK for a State to commit an offence that is imprisonable in almost every civilized country on earth, on the supposition that people who prefer to keep their financial dealings private are necessarily committing tax offences.

This means that large numbers of perfectly honest individuals, who pay all their taxes, are going to be subject to investigation and possible harrassment simply because they were unlucky enough to find themselves on the stolen list of Liechtenstein account holders. Given the lamentable record of government in protecting personal data, it is a fair bet that many of them are going to find themselves totally deprived of the confidentiality they thought they enjoyed.

The slippery bit comes over whether banking secrecy should be permitted at all. The governments which have been crying foul over Liechtenstein's secrecy laws in the past two weeks are of course themselves highly secretive, but have been energetically pursuing 'transparency' when it comes to jurisdictions which charge low rates of tax, in case citizens should try to shelter money away from high domestic tax rates.

No-one would argue that people should be allowed to hide from their tax liabilities; on the other hand, a world in which a government can readily obtain information about any of its citizens' world-wide financial dealings would seem to be one large and scary step too far.

The problem - and a lot of other ones - is caused by the principle of taxation of worldwide income for a resident, and the accompanying idea that you can only be resident in one country. This principle suits governments, but is increasingly at odds with the way that people actually live.

The solution is to have an independent and trustworthy worldwide body that confidentially monitors individuals' total income, and to allow States to tax that income in proportion to the time that an individual spends in them. But don't hold your breath!


Tags:


About the Author


Jeremy Hetherington-Gore Unleashed

Jeremy tackles the difficult issues head on!

 

 

« Go Back to Blogs

Blog Archive

Event Listings

Listings for the leading worldwide conferences and events in accounting, investment, banking and finance, transfer pricing, corporate taxation and more...
See Event Listings »