The Murky World of Tax Havens
Took a crack at doing a video. I’ve been very curious about the workings of Tax Havens and how they came to be. One popular myth is that Switzerland provided a financial haven to Jews fleeing the Holocaust. Sadly, as I dug into the subject, the reality turned out to be less benign. By some estimates around 8% of Global Wealth resides in Offshore Havens. And this is actually not a surprise at all - virtually anyone of influence in today’s world would have an offshore account. So while the Panama Papers forced political resignations in many countries, it’s laughable to imagine their opponents weren’t doing the same.
Another observation that always baffled me was why we have so many of them in the first place. What differentiates say Switzerland from Liechtenstein, the Cayman Islands or Jersey? As it turns out a lot of them have their unique uses, which speaks to the massive scale of offshore activity. The Cayman Islands, for instance, markets itself to Hedge Funds and much of the Hedge Fund Industry incorporates there. If you’re a crook with stolen money - one of your best bets is the Cook Islands where court rulings can’t touch you. If you’re one of the last vestiges of Monarchy, and afraid your grand-nephew may be plotting against you….open a Liechtenstein Trust where you can control how much money they can access.
Editing may not be top notch but please do take a look - as I did quite a bit of research, and am happy to talk more.
If you're really interested in the topic, I can recommend the following books:
- The Hidden Wealth of Nations, Gabriel Zucman
- Treasure Islands, Nicholas Shaxson
- The Laundromat, Jake Bernstein
- Tax Havens: How Globalization really works - Ronen Palan, Richard Murphy, Christian Chavagneux