Are tax havens an enraging but tangential subject? Or do they have a powerful effect on how the U.S. economy functions and should therefore be a part of every political debate?
The startling findings of a new academic study indicate that it’s the latter. Titled “The Exorbitant Tax Privilege,” the paper is co-written by Thomas Wright and University of California, Berkeley economist Gabriel Zucman, one of the world’s top authorities on tax havens and author of the best layperson’s introduction to the subject, “The Hidden Wealth of Nations.”
Tax havens — the most significant include Ireland, Singapore, Switzerland, the Netherlands, Luxembourg, Hong Kong, and Bermuda — serve two purposes.
The first is tax evasion by individuals, which is illegal. Think of Russian or Nigerian plutocrats transferring their assets to small Caribbean nations with strict banking secrecy laws, freeing them from the dreary necessity of paying taxes in their home countries.
The second is tax