Did you know that trillions of dollars are hidden each year by the super-rich and multi-billion dollar corporations? They are able to do this by putting their money into tax havens, which levy very low rates on certain taxes. Unfortunately, when billionaires and businesses use tax havens to hide their assets, they cost governments billions of dollars in taxes that can be used for infrastructure, health services, police forces, and other much needed public programs.
The Tax Justice Network recently released its latest list of the world’s friendliest tax havens. These are territories, states, and nations that are particularly generous with the tax rates to foreign interests or have some level of secrecy that facilitates tax evasion. Some countries on the list may surprise you. Others may not. Here are the top ten from highest to lowest:
- Dubai / UAE
- Hong Kong
Some of the names on the list make a lot of sense. We’ve all heard of the Swiss Bank, and how individuals and businesses have used Switzerland as a tax haven to hide their assets. The Cayman Islands are another well-known example. However, the United States may not seem like a tax haven, but this couldn’t be further from the truth. Although the United States has the US Foreign Account Tax Compliance Act, or FATCA, this hasn’t improved secrecy. In fact, unlike other countries on the list who have shown improvement, the United States has gotten worse.
According to a 2012 New York Times article, Delaware is actually the worst tax haven in the world, providing the greatest “single source of anonymous corporations in the world.” Wyoming and Nevada also have been notoriously friendly to businesses and the super-rich as well with regard to taxes.
As someone who has dealt with tax evasion questions in the past, David Stewart of Bowling Green, KY understands the ramifications of tax havens and tax evasion. Tax avoidance is one thing. However, there are way too many instances where individuals and businesses are outright hiding their assets on purpose. More than thirty trillion dollars are hidden across the world. A lot of that money is located in the ten countries listed above. As the United States looks to harden its stance against tax evasion, it must first look within its own shores as this is becoming a growing problem.