Document Type

Working Paper

Publication Date

11-4-2013

SSRN Discipline

PSN Subject Matter eJournals; LSN Subject Matter eJournals; Tax Law & Policy eJournals; Financial Economics Network; Sustainability Research & Policy Network; CGN Subject Matter eJournals; European Private & Public Law eJournals; Management Research Network; Legal Scholarship Network; Corporate, Securities & Finance Law eJournals; Criminal Law & Procedure eJournals; Political Economy - International eJournals; Law School Research Papers - Legal Studies; Corporate Governance Network; Law & Society eJournals; Law & Society: Public Law eJournals; International Law & Trade eJournals; SRPN Subject Matter eJournals; Political Science Network; Social Responsibility of Business eJournals; Political Economy - Development eJournals

Abstract

Allegations by political leaders and others that offshore financial centers enable multinational enterprise to avoid paying a "fair" amount of tax "” and that they enable wealthy individuals to evade paying any tax much of it on ill gotten gains "” are once again garnering headlines and inspiring government action One of the most prominent commentators on these topics The Tax Justice Network has recently claimed that thanks to the services of tax havens 2132 trillion of wealth of questionable origin remains hidden and untaxed and that such abuse must be stopped through greater regulation In this paper we argue that such claims rest on poor data and analysis and on mistakes about how financial transactions international taxation and antimoney laundering rules actually work We further argue that demands for more regulation without considering cost and effectiveness rely on a belief that international financial transactions are assumed illegitimate unless tightly controlled rather than primarily reflecting the normal legitimate workings of an efficient market

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