Two reasons to oppose tax havens

Richard Murphy in Tax Research UK:

The opening question sought to discover why I opposed tax havens. I gave two reasons (one has to be brief when doing these things). The first was that tax havens are deliberately designed to increase inequality in the world, and do so. That’s because they permit those with wealth to opt out of taxation.

My second reason is that tax havens are deliberately designed to undermine the world’s markets, whether they be for capital or trade. This is because market theory (and practice) requires that information be available to all participants if they are to make the best possible decisions that will reduce risk, keep the cost of capital to the minimum possible, allocate capital efficiently, and so maximise productive investment and the consequent opportunities that can be created for people to enjoy. By creating opacity, deliberately, tax havens seek to undermine this process.

In this twofold attack, one on the democratic right of governments to tax as they will in accordance with the mandate that they have, and the other on the right of markets to operate in the best interests of society tax havens pose a threat to the two pillars on which western society has been built. The charge sheet cannot be more serious than that.

My emphasis.

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