Clameur de Haro, in a post called "Tax Avoidance, International Financial Centres, and Jersey – Neither Illegitimate Nor Immoral" makes a good case for tax competition as a legitimate and legal mark of protest against profligate governments (as Richard Teather - author the Benefits of Tax Competition - also argues. Clameur is also clear that he does not approve of illegal tax evasion.
Of course, that is why the Tax Information Exchange Agreements are so important for stamping out illegitimate money (which should have been declared by the owner in his/her country of domicile). Also why the money laundering laws are so tight over here. We have to be whiter than white.
But the case of Northern Rock using a Jersey Trust for hiding UK balance sheet items with a beneficiary who had not even been informed about this while legal certainly leaves a bad taste in the mouth. Likewise Tesco's aggressive use of JPUTs (Jersey Property Units Trusts) was a legal loophole - until closed - but again gives the impression to outsiders that Jersey is involved in Arthur Daly kind of finance, i.e. dodgy but just the right side of the law.
That's the impression Private Eye gives to its readers when it exposes this kind of practice, as it gives the impression that rick corporations (and individuals) can restructure their finances in ways that ordinary mortals cannot - so as to pay less tax. Money can buy loopholes. The rich can buy their way out of the obligations that fall on the rest of us - that is the general picture that critics give. And locally, Jersey's millionaire residents, paying less than the full 20% tax that everyone else pays, may give the Island welcome funds from their agreed tax (much as the super bonuses of city "fat cats" was welcomed by Gordon Brown because of the extra tax revenue it gave him), but that certainly is not a fair and equitable tax system. None of this may be illegitimate - but immoral? I'm not convinced.
Links:
Of course, that is why the Tax Information Exchange Agreements are so important for stamping out illegitimate money (which should have been declared by the owner in his/her country of domicile). Also why the money laundering laws are so tight over here. We have to be whiter than white.
But the case of Northern Rock using a Jersey Trust for hiding UK balance sheet items with a beneficiary who had not even been informed about this while legal certainly leaves a bad taste in the mouth. Likewise Tesco's aggressive use of JPUTs (Jersey Property Units Trusts) was a legal loophole - until closed - but again gives the impression to outsiders that Jersey is involved in Arthur Daly kind of finance, i.e. dodgy but just the right side of the law.
That's the impression Private Eye gives to its readers when it exposes this kind of practice, as it gives the impression that rick corporations (and individuals) can restructure their finances in ways that ordinary mortals cannot - so as to pay less tax. Money can buy loopholes. The rich can buy their way out of the obligations that fall on the rest of us - that is the general picture that critics give. And locally, Jersey's millionaire residents, paying less than the full 20% tax that everyone else pays, may give the Island welcome funds from their agreed tax (much as the super bonuses of city "fat cats" was welcomed by Gordon Brown because of the extra tax revenue it gave him), but that certainly is not a fair and equitable tax system. None of this may be illegitimate - but immoral? I'm not convinced.
Links:
Book of the post:
The Benefits of Tax Competition, Richard Teather, 2005
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