To many people, a tax haven conjures a picture of business tycoons satisfied by the latest tax loopholes that their financial handlers have come up with. This image makes tax havens to be regarded suspiciously, given that so many people possess private bank accounts stashed with millions of dollars somewhere in Puerto Rico or Monaco. This leads to questions such as why rich people enjoy tax reprieves that are not enjoyed by ordinary people. However, every Puerto Rico tax haven has some benefits for every person.
For one, if a person lives in a developed country, then today his or her taxes are probably lower than they were three decades ago thanks to tax havens. The top tax rates of personal income in 1980 averaged over 67%, with corporate taxes averaging almost 50%. Countries imposed extra rates of tax on capital routinely to compound the image, including capital gain taxes, dividend taxes, wealth taxes and inheritance taxes. Such policies discouraged investment and taxes, stifling growth of the economy and leading to significant economic hardship.
Since then, governments have however been racing to reform tax regimes and cut tax rates. Nowadays, top personal tax rates average only about 40%, while corporate rates have now decreased to about 27% on average. It is largely globalization that has triggered this change as opposed to ideology. Governments are reducing taxes as they fear investment and jobs will flee outside national borders.
Tax havens have made a major contribution to these positive developments, through the provision of a safe refuge for people who want to dodge confiscatory taxes. Lawmakers have decided that generating revenue through modest tax rates is better than imposing high rates and then risking losing out.
Tax havens do have a moral role to play. They play a significant part in protecting people subjected to sexual, political, religious or racial persecution. So many people in the world live in regimes and nations that have little respect to human rights, and rich people are mainly targeted by dictatorial governments.
For such potential victims, depositing money in a tax haven offers vital protection. Even the UN, in a 1998 report that attacked tax havens, was compelled to admit that governments across the world spied on their people with the aim of maintaining political control for much of the 20th century. Political freedom can be boosted by the ability to hide from government purely personal information.
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 taking tax policy in the correct direction, and a Puerto Rico tax haven play a major role in this process of liberation. Tax reforms and lower rates are a sure way of combating evasion.
For one, if a person lives in a developed country, then today his or her taxes are probably lower than they were three decades ago thanks to tax havens. The top tax rates of personal income in 1980 averaged over 67%, with corporate taxes averaging almost 50%. Countries imposed extra rates of tax on capital routinely to compound the image, including capital gain taxes, dividend taxes, wealth taxes and inheritance taxes. Such policies discouraged investment and taxes, stifling growth of the economy and leading to significant economic hardship.
Since then, governments have however been racing to reform tax regimes and cut tax rates. Nowadays, top personal tax rates average only about 40%, while corporate rates have now decreased to about 27% on average. It is largely globalization that has triggered this change as opposed to ideology. Governments are reducing taxes as they fear investment and jobs will flee outside national borders.
Tax havens have made a major contribution to these positive developments, through the provision of a safe refuge for people who want to dodge confiscatory taxes. Lawmakers have decided that generating revenue through modest tax rates is better than imposing high rates and then risking losing out.
Tax havens do have a moral role to play. They play a significant part in protecting people subjected to sexual, political, religious or racial persecution. So many people in the world live in regimes and nations that have little respect to human rights, and rich people are mainly targeted by dictatorial governments.
For such potential victims, depositing money in a tax haven offers vital protection. Even the UN, in a 1998 report that attacked tax havens, was compelled to admit that governments across the world spied on their people with the aim of maintaining political control for much of the 20th century. Political freedom can be boosted by the ability to hide from government purely personal information.
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 taking tax policy in the correct direction, and a Puerto Rico tax haven play a major role in this process of liberation. Tax reforms and lower rates are a sure way of combating evasion.
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