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Tax Havens

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Tax Havens

How Globalization Really Works

Cornell UP,

15 min read
10 take-aways
Audio & text

What's inside?

Tax havens play an outsized but little-understood role in the global economy. Delve into their murky depths, if you dare.

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Editorial Rating

7

Qualities

  • Controversial
  • Overview
  • Background

Recommendation

Some aspects of offshore finance take place in a murky world of sham transactions in exotic locales, yet many economists say tax havens play an important role in greasing the machinery of global capitalism and keeping tax-raising bureaucrats at bay. Authors Ronen Palan, Richard Murphy and Christian Chavagneux beg to differ. They see tax havens as fundamentally dishonest; these “fiscal paradises” favor the haves at the expense of the have-nots. While their opinions on the subject are clear, the authors also provide a thorough overview of what’s going on in the world’s tax havens and what the future might hold for them. Their writing style is a bit dry and disorganized, but they offer plenty of juicy details about the places and institutions that enable tax evasion. getAbstract recommends this book to readers seeking an in-depth study of the rise of offshore financial centers and their place in global finance.

Summary

Going Offshore to Avoid the Tax Man’s Grabby Mitts

Tax havens are at the center of the murky world of offshore finance, where the wealthy, the paranoid and sometimes the downright shady can shelter their income and assets from the grabby hands of tax collectors. Taxpayers are drawn to tax havens for a variety of reasons. By setting up shop in the Cayman Islands, the Isle of Man, Liechtenstein or Dubai – to name just a few tax havens – rich individuals and corporations can lower their tax burdens. Because of their secrecy, tax havens tend to attract shadowy characters who hope to accomplish more than simply skirting the tax man. Tax havens also offer an escape from regulation; they can be hotbeds for laundering money and for stashing cash away from nosy spouses and prying partners. Countries that set up tax havens, for their part, use their sovereign status as a way to lure in the elite’s capital. Yet the existence of these centers exacerbates the uneven fiscal responsibilities globalization has magnified: When corporations and the affluent don’t pay their fair share of taxes, the rest of the world suffers the inequity.

Tax havens can create some surreal scenarios: ...

About the Authors

Ronen Palan teaches international political economy at the University of Birmingham, Richard Murphy is CEO of Tax Research LLC in Britain, and Christian Chavagneux is deputy editor in chief of Alternatives Economiques and editor of L’Economie politique.

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