Demagogues such as Senator Carl Levin, as well as many other politicians and journalists, often assert that low-tax jurisdictions are havens for dirty money and terrorist financing. From a theoretical perspective, this does not make sense. So-called tax havens have a big incentive to avoid scandal since they are much more vulnerable to reputational risk. Just imagine what would happened, after all, if the 9-11 terrorists had used a bank in the Bahamas instead of a bank in Florida. Critics of low-tax jurisdictions automatically would have assumed that the bank was complicit and the entire financial services industry in the Bahamas would have been crippled – or even destroyed. But because the terrorists used American banks (as well as banks in high-tax European nations and the Middle East), there was not a knee-jerk reaction. People understood that the bank tellers and managers had no way of knowing that the flight school students were actually lunatics.
But this does not stop the anti-tax haven smear campaign. Low-tax jurisdictions are viewed as a threat by politicians since it is much harder to impose bad tax policy in a world where tax competition is allowed to flourish. This is why tax havens are attacked whenever something bad happens. If there is a terrorist attack, blame tax havens. If there is a financial crisis, blame tax havens.
With this in mind, a new report from the University of Basel’s Institute of Governance did some real research and came up with a list of nations where there actually is a high risk of money laundering and terrorist financing. As the map below indicates, only one so-called tax haven is among the 28 countries listed, and that nation was in the lowest-risk category.
[…] against so-called tax havens for supposedly being hotbeds of dirty money, but take a look at this map put together by the Institute of Governance and you’ll find only one low-tax jurisdiction among the 28 nations […]
[…] against money laundering are designed to fight crime. Don’t believe them. Money laundering is mostly a problem in “onshore” nations. The real motive is to undermine financial privacy so governments […]
[…] Leftist politicians frequently accuse so-called tax havens of being sanctuaries for dirty money, but those low-tax jurisdictions have much better track records than onshore […]
[…] against so-called tax havens for supposedly being hotbeds of dirty money, but take a look at this map put together by the Institute of Governance and you’ll find only one low-tax jurisdiction among the 28 nations […]
[…] against so-called tax havens for supposedly being hotbeds of dirty money, but take a look at this map put together a few years ago by the Institute of Governance and you’ll find only one supposed haven among the 28 nations […]
[…] against so-called tax havens for supposedly being hotbeds of dirty money, but take a look at this map put together a few years ago by the Institute of Governance and you’ll find only one supposed haven among the 28 nations […]
[…] El Institute of Governance de la Universidad de Basilea hizo un análisis muy detallado de países con alto riesgo de financiación de actividades terroristas y de blanqueo, y de los veintiocho países que identificó solo uno puede considerarse “refugio […]
[…] against so-called tax havens for supposedly being hotbeds of dirty money, but take a look at this map put together a few years ago by the Institute of Governance and you’ll find only one low-tax jurisdiction among the 28 nations […]
[…] of Governance de la Universidad de Basilea, hizo un análisis muy detallado de los países con alto riesgo de permitir la financiación de actividades terroristas y blanqueo de activos. En 2014 analizó 152 países, y de acuerdo al peligro que cada uno de ellos […]
[…] El Institute of Governance de la Universidad de Basilea hizo un análisis muy detallado de países con alto riesgo de financiación de actividades terroristas y de blanqueo, y de los veintiocho países que identificó solo uno puede considerarse “refugio […]
[…] Which nations are money laundering centers (hint, not tax havens). […]
[…] nations are money laundering centers (hint, not tax […]
[…] El Institute of Governance de la Universidad de Basilea hizo un análisis muy detallado de países con alto riesgo de financiación de actividades terroristas y de blanqueo, y de los veintiocho países que identificó solo uno puede considerarse “refugio […]
[…] P.S. This map shows you the countries considered most at risk of dirty money, which should make you wonder why anyone is foolish enough to think that higher costs on American banks will make a difference. […]
[…] The Institute of Governance at the University of Basel made a very detailed analysis of countries with a high risk of terrorist financing and money laundering, and out of twenty-eight countries identified only one can be considered […]
[…] Which nations are money laundering centers (hint, not tax havens). […]
[…] Which nations are money laundering centers (hint, not tax havens). […]
[…] real-world evidence – as opposed to ideologically motivated assertions – shows that tax havens are not money-laundering centers. Indeed, they generally have stronger laws against dirty money than “onshore” […]
[…] Which nations are money laundering centers (hint, not tax havens). […]
[…] nations are money laundering centers (hint, not tax […]
[…] El Institute of Governance de la Universidad de Basilea hizo un análisis muy detallado de países con alto riesgo de financiación de actividades terroristas y de blanqueo, y de los veintiocho países que identificó solo uno puede considerarse “refugio […]
You know, you forgot at least two huge issues when you touched upon FATCA.
Senator Levin’s FATCA can also be considered directly responsible for the loss of thousands of US citizens choosing to throw off the burden of remaining a US citizen! The loss of potential tax revenue from just two prominent citizens–Tina Turner and Edwardo Saverin–is likely to cost a considerable amount of money over the course of the rest of their lives.
But the biggest loss of all cannot be measured in tax revenue but instead is measured in terms of future potential technological advances. Due to FATCA some of the best and brightest of those among us are seeking to leave the US permanently for places that treat them better. And the saddest irony of all is, in many cases it’s not about the money they pay but the overwhelming monstrosity of the paperwork jungle that compliance has now become for those who live overseas! Don’t even get me started on the monstrous penalties of making a single mistake on tax forms that do not exist in TurboTax or other software, or the added expense of most overseas Americans to comply who often end up paying no tax to the US because of paying even more to their country of residence than they would have paid to the US due to tax treaties.
All we have to do to see this brain drain is to look at what Eduardo Saverin is working on post-Facebook . . .
[…] P.S. You probably won’t be surprised to learn that “onshore” nations are much more susceptible to dirty money than “offshore” jurisdictions. Which is why you have a hard time finding any tax havens on this map showing the nations with the most money laundering. […]
[…] nations are money laundering centers (hint, not tax […]
The DPRK has banks?!?
i am amazed that Somalia is not in there – where do the pirates fund their armaments and launder the ransoms ?
[…] against so-called tax havens for supposedly being hotbeds of dirty money, but take a look at this map put together by the Institute of Governance and you’ll find only one low-tax jurisdiction among the 28 nations […]
[…] This map shows you the countries considered most at risk of dirty money, which should make you wonder why anyone is foolish enough to think that higher costs on American […]
[…] be surprised to learn that the real-world evidence directly contradicts what he wrote. The most comprehensive analysis of dirty money finds 28 problem jurisdictions, and only one could be considered a tax […]
[…] University of Basel’s Institute of Governance recently published a map showing the nations most linked to dirty money. What made the map interesting is that only one of the 28 […]
[…] University of Basel’s Institute of Governance recently published a map showing the nations most linked to dirty money. What made the map interesting is that only one of the 28 […]
[…] Mon 22 Feb 2010 The Republican Heretic Leave a comment Go to comments Arguing that “tax havens” are not focused centers of dirty money and money laundering, the Cato Institute’s Daniel Mitchell asks whether expensive and […]