When some people think of a tax haven, what comes to mind is a picture of rich businessmen laughing at the tax loopholes that their accountants have figured out. This popular image together with the fact that some individuals have private bank accounts with millions of dollars somewhere in Puerto Rico or Monaco makes it easy to be suspicious of tax havens. Some may wonder why the wealthy get tax reprieves while ordinary people pay their fair share. However, such conventional wisdom can never be more wrong, as everyone is a beneficially of a Puerto Rico tax haven in one way or another.
For one, people who live in developed countries pay lesser taxes than they did a few decades ago, thanks to a tax haven. In the early 1980s, average tax rates for personal incomes exceeded 67%, with the average figures for corporate taxes nearing 50%. Nations routinely imposed extra taxes on capital in order to compound such images, inclusive of capital gain, inheritance, dividend and wealth taxes. Such policies not only discouraged taxes and investment, but also stagnated economic growth and triggered economic difficulties.
Governments have since then put some effort to reduce tax rates and reform tax regimes. Today, the average top personal tax rates is only about 40%, with corporate rates having now reduced to an average of about 27%. Rather than ideology, it is mainly globalization that has led to this change. Governments are decreasing taxes since they feel that jobs and investments might flee from their national borders.
Tax havens have contributed significantly to such positive developments by offering refuge to individuals wishing to avoid appropriately tax rates. Lawmakers have figured out that generating revenue by charging modest taxation rates is a better alternative to imposing high rates only to lose out.
There might even be a moral case in favor of tax havens. They play a crucial role in the protection of individuals subjected to ethnic, religious, racial, political or sexual persecution. A majority of the worlds population lives in countries and regimes having inadequate protection of human rights, and individuals with assets are often targeted by oppressive governments.
Such likely victims can get important protection by stashing their money in tax havens. Even the United Nations has admitted that many governments across the globe spy on their citizens for much of the twentieth century with the aim of getting political control.
The OECD is attempting to boost its campaign against what it refers to as uncooperative tax havens. The truth is that these are the same haven assisting in getting better tax policies. The proposals are doomed to fail since tax havens are refusing to weaken their tax laws. They say it can only happen if all nations agree to it, something that is very unlikely.
Tax competition is directing tax policies in the right way, something that Puerto Rico tax haven is playing a significant role in this liberation process. One sure way of reducing evasion is lower rates and tax reforms. The reason why people evade taxes in the first place is because of the high rates, hence a reduction will do wonders.
For one, people who live in developed countries pay lesser taxes than they did a few decades ago, thanks to a tax haven. In the early 1980s, average tax rates for personal incomes exceeded 67%, with the average figures for corporate taxes nearing 50%. Nations routinely imposed extra taxes on capital in order to compound such images, inclusive of capital gain, inheritance, dividend and wealth taxes. Such policies not only discouraged taxes and investment, but also stagnated economic growth and triggered economic difficulties.
Governments have since then put some effort to reduce tax rates and reform tax regimes. Today, the average top personal tax rates is only about 40%, with corporate rates having now reduced to an average of about 27%. Rather than ideology, it is mainly globalization that has led to this change. Governments are decreasing taxes since they feel that jobs and investments might flee from their national borders.
Tax havens have contributed significantly to such positive developments by offering refuge to individuals wishing to avoid appropriately tax rates. Lawmakers have figured out that generating revenue by charging modest taxation rates is a better alternative to imposing high rates only to lose out.
There might even be a moral case in favor of tax havens. They play a crucial role in the protection of individuals subjected to ethnic, religious, racial, political or sexual persecution. A majority of the worlds population lives in countries and regimes having inadequate protection of human rights, and individuals with assets are often targeted by oppressive governments.
Such likely victims can get important protection by stashing their money in tax havens. Even the United Nations has admitted that many governments across the globe spy on their citizens for much of the twentieth century with the aim of getting political control.
The OECD is attempting to boost its campaign against what it refers to as uncooperative tax havens. The truth is that these are the same haven assisting in getting better tax policies. The proposals are doomed to fail since tax havens are refusing to weaken their tax laws. They say it can only happen if all nations agree to it, something that is very unlikely.
Tax competition is directing tax policies in the right way, something that Puerto Rico tax haven is playing a significant role in this liberation process. One sure way of reducing evasion is lower rates and tax reforms. The reason why people evade taxes in the first place is because of the high rates, hence a reduction will do wonders.
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