The German invasion of Liechtenstein
I’ve seen little about this.
The German government is annoyed that some of its citizens avoid the high taxes it imposes by putting money in banks in Liechtenstein. So annoyed is the German government that they illegally paid for account details stolen by a Liechtenstein bank employee.
As Crown Prince Alois declared:
Germany will not solve its problems with its taxpayers by attacking Liechtenstein.
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March 25th, 2008 at 12:09 pm
Germany has every right to be angry and take action against Leichenstein. It is unacceptable the way rich citizens have been getting out of paying taxes through Leichenstein.
March 25th, 2008 at 1:58 pm
They can be angry all they like, but there’s nothing they can legally do to Liechtenstein.
All these people are doing is voting with their feet - they believe they are paying too much tax, so they seek to avoid paying some - in a perfectly legal manner.
The state does not have a right to act illegally to prevent that, or to attack another country over it.
If you want the rich to pay their taxes, lower them, make the cost of avoidance higher than the cost of paying taxes - you may well get more income anyway (not that any western government needs more money - they just need to spend less).
I suggest you read the whole article too - the suggestion is that land and rent be taxed - that cannot be avoided (in this way at least), it doesn’t tax the risk of investment or labour.
Your fundamental error is the assumption that taxation is a moral thing and that paying taxes is a moral duty. That is simply not true. Tax is the theft of money from individuals by the state. Perhaps some is necessary to address imbalances in wealth (income tax does not do that, it entrenches them) or to internalise externalities, but in itself, tax is not a good thing.
March 26th, 2008 at 11:27 am
We bought the same details; it seems it is legal for the revenue to do so. I think that is more than a little dubious.
However, they are seeking to prosecute people who have not acted in a perfectly legal manner. They expect to charge a number of people with tax evasion. They haven’t avoided taxes by moving income to liechtenstein, but rather by hiding income there- having it off the books.
So, they evade taxes and then put the money gained from this in secret account in liechtenstein. This is very creative accounting, not voting with ones feet, and even if the revenues illegal actions are to be condemned, so are those of the tax evaders.
If you want to vote with your feet, then they are free to move to liechtenstein. Opening a few accounts does not somehow free you from paying tax.
March 26th, 2008 at 12:25 pm
So, let me get this straight - it is legal for us to acquire information which is illegally obtained in another country?
Imagine if a British person broke the law in the UK on behalf of a foreign government - that would be scandalous - we’d be kicking up a massive international stink, but because it suits us and its a small country?
If the people have broken German laws then prosecute them for that, but do so without breaking the laws of another country or seeking to bully that country into submission. This is part of a general trend of trying to bully other countries with lower taxes into submission to prevent tax competition.
Thankfully, such countries, like Switzerland and Liechtenstein are having none of it. If only it would be easier for the poor to avoid taxation.
I also find it hard to condemn tax avoidance. It is a moral act to reclaim sovereignty over your labour. I condemn the fact that the poor cannot take advantage of this and that the rich can. But what do you expect of income taxes which drive the poor into the ground and subsidise the rich. The aim seems to be serfdom.
March 26th, 2008 at 1:34 pm
Well, I don’t support the strange law of the revenue being allowed to break the law to find tax evaders, I just noted that its the case.
The real issue here isn’t them having money in countries with lower tax rates. The accounts were confidential. It was the secrecy that made them useful for tax evasion, not just the tax rates. If they want to vote with their feet, they are free to move, which they are clearly wealthy enough to do.
I have no special commitment to income taxes, but I fail to see how they crush the poor. The poor pay lower rates, and recieve the most in income and service use from state provision. It primarily targets the middle classes.
While it is true they do not tax the rich in the way they should, if they really subsidised the rich then the rich wouldn’t be tax evading, or at the very least you wouldn’t claim it was a “moral act”.
Furthermore, since we can envision a system with, say, negative income tax, it is clear the income taxes do not necessarily disadvantage the poor.
LVT and other comparable taxes would not raise enough to fund the current state. I assume your solution is to slash state spending?