In Defense of Tax Havens
Over at Samizdata, Johnathan notes:
Another issue, of course, is this: democracy and liberty are not the same thing, a point that has been remarked at this blog many times before. For sure, democracy may - may - be the least-worst way to kick out a government and replace it with a hopefully better one, but the idea that freedom comes from letting 51% of the electorate steal from 49% of the electorate has precious little to do with liberty. The right to own property and enjoy its fruits unmolested is as important as freedom of speech or the right to self defence. Tax havens rile communitarians precisely because they are a standing reproach to the looters who use democratic mandates to justify their depredations. They act as a brake on the power of governments with a temporary majority in a democratic assembly every bit as powerful as other checks and balances such as independent courts and upper chambers. And as traditional checks and balances are eroded - as they have been in Britain recently - we need all the constraints on national and supranational power we can get.
Any back door you can build in to socialistic policy is a good a back door in my eyes.
March 6th, 2008 at 2:46 pm
“They act as a brake on the power of governments with a temporary majority in a democratic assembly”
Is he implying that eventually the richest 1% will be in the majority? Sounds like a contradiction in terms…
Tax havens are a way for people to enjoy the benefits of living in this country without having to pay for it. If they don’t like our system they’re free to leave the country; instead they’re basically pirating government services (including the law-and-order services that allow free markets to exist in the first place).
Saying that tax havens are a way of subverting a defunct capitalist agenda is about as legitamate as saying that music piracy is a way of subverting defunct music distribution systems. If you’re for tax havens, you should be for piracy.
BTW, do you favor a despotic government which rigidly enforces complete personal and economic freedom? What’s your democracy alternative (since you acknowledge that someone will always fill a power vacuum, and whoever that is will be called ‘the government’)?
March 6th, 2008 at 7:24 pm
Darwin, who do you think is doing the thieving here?
March 7th, 2008 at 5:20 am
“Is he implying that eventually the richest 1% will be in the majority?”
No, he isn’t. He is saying that a democratic plurality does not make theft any less immoral.
“Tax havens are a way for people to enjoy the benefits of living in this country without having to pay for it”
Actually it is for people who do not see why other people should be allowed to vote themselves the money of others to do things the state has no business doing in the first place. To have almost half you money taken by the state in return for things you do not want or need is only a ‘benefit’ in the sense that a mafia protection racket is a ‘benefit’.
“What’s your democracy alternative (since you acknowledge that someone will always fill a power vacuum, and whoever that is will be called ‘the government’)?”
LIMITED government. Take the USA for example. For most of its history, the state was really quite small and took a small fraction of what it does today. This was because both constitutionally limited government trumped democratic politics (or at least that was the idea and to a fair extent also the imperfect reality) and also the idea of un-enumerated rights was well established. Now that is almost untenable as as political regulation of almost every aspect of life seem to strike a lot of people of perfectly reasonable.
March 7th, 2008 at 11:27 am
“Darwin, who do you think is doing the thieving here?”
- To call taxation ‘theft’ is to render the word meaningless, since by definition ‘theft’ has to be taking something ilegally, and of course taxation is built right into the legal system (and indeed, is how the legal system is paid for). I don’t know if you’d want to call tax evasion theft or simply free-loading, but listen: People are taking the (many, mnay) benefits of being a US citizen, then not paying for them like everyone else. I don’t know how you can possibly be a capitalist and think this is ok. You may think that massive reform to the system is needed (I certainly do), but not that just free-loading is a noble solution.
“No, he isn’t. He is saying that a democratic plurality does not make theft any less immoral.”
That’s the smarter argument to make, but then I don’t know why he keeps bringing up the point of a ‘temporary’ majority. It seems irrelevant to his argument.
“Actually it is for people who do not see why other people should be allowed to vote themselves the money of others to do things the state has no business doing in the first place”
Hey I agree, personally I think that companies have no business trying to restrict the distribution of movies and music which, after all, can be digitally copied infinitelly for free. So I pirate it all because I disagree with the existing system. Me and those tax evaders sure are a noble breed huh?
If you don’t like paying taxes, you have two options: change the system or move. If you honestly think you’re being noble, tell everyone what you’re doing; as Ghandi could tell you, it’s not civil disobedience if you do it in secret and try to never get caught.
“LIMITED government.”
I agree that the government should be a lot more limited (especially in terms of civil rights) but notice that this does absolutely NOTHING to address the author’s argument. He’s saying that democracy is inherently tyranical, because the majoirt decides what happens to everyone.
So, in your limited government, how do those very limits get decided on? Are they decided democratically? If so, you haven;t addressed his problems with democracy, and the majoirty can come in and change those limits later (which is precisely the story of the US). If you want to make sure that the majority doesn’t suddenly decide to remove some of those limits, do you forcefully impose those limits in a totalitarian manner? If so you might well be able to keep those limits in place even against popular opinion (until the smal number of people in control become corrupt and start using their power however they want), but then you’re making an argument for liberty through totalitarians fiat, and I personally would take a democratic government I don’t like very much over a totalitarian government I like a lot… for now.
March 7th, 2008 at 6:03 pm
The Federal and State governments of America provide a relatively safe and secure place for one to live, make a living, and do business. There are important contractual and anti conflict of interest laws that allow the market more or less to operate efficiently. There is a great deal of infrastructure supporting the people of this great land, allowing them to be comfortable and do their duty as consumers. But why would a business want to support the state that maintains an environment conducive to making loads of money? Oh, I didn’t realize that was socialism, my bad.
Look, I’ll be the first person to admit our government frequently oversteps its bounds, but if you have that much of a problem with it, why do you choose to live here, to do business here? You still have the freedom to move to another country and try to be as happy and successful there.
Rather than simply hiding your money from tax collectors, it would send a much stronger message our government if you closed up shop and moved to a different nation. Darwin is right, tax havens are tantamount to piracy. Businesses extract value (wealth) from Americans without paying for the system that allows them to do so. And that ain’t right.