December 22, 2008 1:34PM

Good Argument for Tax Havens, Part I

When people ask why I am such a strong defender of tax havens (see here, here, and here), I explain that we need low‐​tax jurisdictions and financial privacy so that productive people have protection from greedy and venal governments. A good example comes from Germany, where a politician wants the government to force people to “invest” in government bonds. Fortunately, this idea does not look like it will happen today, so hopefully more Germans will have time to put their money someplace hidden from the kleptocrat political class. The Spiegel reports:

Thomas Schäfer‐​Gümbel, a little‐​known Social Democrat candidate fighting to be governor of the western German state of Hesse in an election on January 18, has come up with an unconventional idea that is attracting the — presumably desired — attention of the media. He says wealthy people with cash and real estate assets exceeding €750,000 ($1.04 million) should be forced to lend the state two percent of their assets for a period of 15 years, and at an interest rate no higher than 2.5 percent. “A compulsory state bond would be a rapidly effective instrument to mobilize additional funds to overcome the economic crisis,” Schäfer‐​Gümbel, 39, told Bild newspaper on Monday. “That would be very fair because only the very wealthy would be drawn on.”