Clameur de Haro notes from the website of The Adam Smith Institute that Jersey Finance’s Geoff Cook will be one of the key speakers participating in an ASI seminar on 4 November on the subject of “Tax Competition: Economic Freedom and National Sovereignty”.
This is good news, for one of the other key speakers is Richard Teather. Apart from his role as Senior Lecturer in Tax Law at Bournemouth University Business School, Mr Teather is also the author of the much acclaimed “The Benefits of Tax Competition”, probably one of the seminal works on the economic justification for, and benefits arising from, the competition provided to high-tax jurisdictions by their relatively low-tax counterparts. CdeH’s own copy is much read, and extensively bookmarked. Mr Teather, thankfully, is also an adviser to the States of Jersey scrutiny functions on tax policy and tax matters.
Mr Cook himself has sound views on the futility and hypocrisy of the attempts by high-tax jurisdictions to deflect attention from their own macro-economic and fiscal deficiencies by attempting to coerce low-tax jurisdictions into emulating them, and Clameur de Haro makes no apology for repeating them.
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This is good news, for one of the other key speakers is Richard Teather. Apart from his role as Senior Lecturer in Tax Law at Bournemouth University Business School, Mr Teather is also the author of the much acclaimed “The Benefits of Tax Competition”, probably one of the seminal works on the economic justification for, and benefits arising from, the competition provided to high-tax jurisdictions by their relatively low-tax counterparts. CdeH’s own copy is much read, and extensively bookmarked. Mr Teather, thankfully, is also an adviser to the States of Jersey scrutiny functions on tax policy and tax matters.
Mr Cook himself has sound views on the futility and hypocrisy of the attempts by high-tax jurisdictions to deflect attention from their own macro-economic and fiscal deficiencies by attempting to coerce low-tax jurisdictions into emulating them, and Clameur de Haro makes no apology for repeating them.
If through the populism of voter appeal or through some systematic ideology the means of wealth creation are overburdened, the incentive to create wealth is diminished, and governments consume a greater and greater proportion of the total economic value available. Eventually the economic engine becomes too dependent on an inverted pyramid of wealth creators. The creators become disincentivised and go elsewhere, or simply down tools.
Free markets, globalisation and tax competition have all combined to produce stellar growth in world GDP over the last thirty years pulling countless millions out of poverty.
An unlikely alliance of tax hobbyists, left wing newspapers, trades unions, and development agencies has catalysed around calls for greater concentration of the means of wealth creation in the hands of governments, and implicitly greater taxation of business and wealthy individuals through the outlawing of wealth structuring and planning, together with restrictions on cross border capital flows. They hope that their own constituencies will be beneficiaries of this new ‘contract’, with the authors, the tax hobbyists, gaining fame and funding, and their supporters feeling validated in their enduring distrust of the wealthy and their advisers.
Moves are in train to stigmatise wealth structuring and planning; to restrict capital movement through attacks on the use of international finance centre:, and to undermine transfer pricing arrangements. If successful the combined effects of these protectionist measures will be to trap capital within borders, significantly reducing overall economic activity.
Such measures will restrict wealth creating activity and encourage growth in central government expenditure. The net effect will be a constriction of wealth, a reduction in tax bases and a loss of global prosperity, driven by a short sighted grab for tax, all delivered through the Trojan horse of transparency.
To accuse banks, or companies, or individuals, of illicit or immoral behaviour because they plan their international affairs in perfectly legal ways simply raises the spectre of wrongdoing in a misleading and mischievous manner. Paid for ‘research’, produced by the tax hobbyists, supported by self interested union groups, and trumpeted by sympathetic bugles, claims that billions is being misappropriated through international finance centres. These claims have no credible evidence underpinning them, demonstrating an opacity which these same sources would find intolerable were it postulated by others.
Hopefully Mr Teather and Mr Cook will be both inclined, and able, to convince the Chief and Treasury Ministers of the need for a robust response to the EU and HMG – particularly as the current HMG has a future lifespan measurable in months at most.
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