The True Story About the World’s Biggest Tax Haven…One that’s Unavailable to Americans…

Our guest columnist today is our friend Daniel J. Mitchell of the Cato Institute, (below) who also will be the keynote speaker later this week at the Sovereign Society's Third Annual Offshore Advantage Seminar, at the Westin, Los Cabos, Mexico. Dan writes:

Tax competition is an issue that arouses passion on both sides of the debate.

Libertarians and other free-market advocates welcome tax competition as a way of restraining the greed of politicians and guaranteeing an efficient and prosperous state – unlike the bloated failed states littered throughout history.

For example, a renewed surge of tax competition lead to a lowering of tax rates in the Reagan-Thatcher era. As rates started to drop, politicians were forced to be more competitive...since their "golden goose" could essentially fly across the border and find better accommodations abroad.

But collectivists despise tax competition — for exactly the same reason. They want investors, entrepreneurs, and companies to passively serve as free vending machines, dispensing never-ending piles of money for politicians…

Internal Sponsorship

TIRED OF HIGH TAXES, GOVERNMENT CONTROL, and INVASIONS OF YOUR PRIVACY?

Whether you like it or not, your life is affected by all three from “cradle to grave.”

But it doesn’t have to be that way…not anymore as our legal counsel Robert Bauman reveals in his best-selling book...

Click Here To Learn More…

So when a left-wing group puts together a ranking of the world’s “top secrecy jurisdictions” in hopes of undermining tax competition, proponents of individual freedom can use that list as a guide to world’s most investor-friendly nations.

The good news is that an American state, Delaware, is number one on the list.

And since being a tax haven is a magnet for investment, this is good news for U.S. competitiveness. The bad news is that American taxpayers are not allowed to benefit from many of Delaware’s “tax haven” policies. Here’s what a left-wing columnist in the United Kingdom wrote about the issue:

You’re a billionaire but you don’t want anyone, least of all the taxman, to know. What do you do? Head for a palm-fringed island paradise or a snow-covered Alpine micro-state? Wrong.

The world’s most opaque jurisdictions – the ones that will best shield you and your cash from the light – are mostly in the heart of the most sophisticated and powerful global financial centres. London, Luxembourg and Zurich are in the top five most secretive jurisdictions, according the first comprehensive index of financial transparency ever compiled.

Yet top of the pile, beating the British Virgin Islands, Belize or Liechtenstein as the best place to hide wealth, is Delaware. One of the smallest states in the US, it offers the best protection for anyone who does not want to disclose their identity as a beneficial owner of a company. That is one very good reason why the East Coast state hosts 50% of the US’s quoted firms and 650,000 companies – almost equivalent to one company per Delaware resident. …

Delaware – the political power-base of the US vice-president, Joe Biden – offers high levels of banking secrecy and does not make details of trusts, company accounts and beneficial ownership a matter of public record. Delaware also allows companies to re-domicile within its borders with minimal disclosure, and allows the existence of privacy-enhancing “protected cell” or “segregated portfolio” companies, among many other stratagems useful for protecting the identity of those who do business there.

We’ll see you in Los Cabos!

Sincerely,

P.S. If you’re not joining us in Mexico this week, then you can still tune in for Patrick Bove’s “on-the-ground” reporting starting in tomorrow’s A-Letter…