The Norwegian government has appointed a one-sided commission to investigate the supposed damage caused by tax havens. A leftist news service reports on this development, and regurgitates a discredited estimate from Oxfam about how low-tax jurisdictions ostensibly deprive politicians in the developing world of tax revenue:
A new commission appointed by Norway will investigate ways of putting a stop to the huge flows of money into tax havens. Tax evasion and corruption are believed to cost poor countries at least 50 billion dollars a year. The commission, launched last week, includes Eva Joly, a special advisor on corruption for the Norwegian development agency Norad… Among the areas that have been labelled as tax havens are Andorra, Monaco, Gibraltar, Jersey, the Cayman Islands, Luxembourg, the Netherlands, as well as some parts of the financial system in London. “I am very proud of this commission and I think it is very important that it has been appointed, because there is quite a high level of confusion surrounding the damaging effects of tax havens,” Joly, who is also part of an anti-corruption working group at the World Bank, told IPS. …According to a 2000 estimate by Oxfam International, tax havens rob developing countries of at least 50 billion dollars a year in revenues.
An amusing aspect of this story is that Norway’s pension fund is a big investor in tax havens:
Finance Minister Kristin Halvorsen and the minister in charge of foreign aid, Erik Solheim, have harshly criticized companies, both Norwegian- and foreign-owned, that avoid taxes by registering themselves in countries with low or non-existent tax obligations. At the same time, however, the state’s massive pension fund that’s fueled by Norway’s oil revenues has been investing billions in companies that are registered in tax havens. This includes companies “based” in places like the Cayman Islands, Bermuda and Cyprus.
The moral of the story, of course, is that politicians are in favor of anything that gives them more money. That enables them to buy votes and provide unearned wealth to their supporters. But taxpayers (the ones who generate the wealth) should not be allowed to protect themselves and their families by utilizing jurisdictions with better tax law.