To many people, a tax haven conjures a picture of business tycoons satisfied by the latest tax loopholes that their financial handlers have come up with. This image makes tax havens to be regarded suspiciously, given that so many people possess private bank accounts stashed with millions of dollars somewhere in Puerto Rico or Monaco. This leads to questions such as why rich people enjoy tax reprieves that are not enjoyed by ordinary people. However, every Puerto Rico tax haven has some benefits for every person.
For one, thanks to tax havens, the taxes of people living in developed countries are probably much less than they were thirty years ago. In 1980, the average tax rate for personal income was more than 67%, while corporate taxes was on average almost 50%. To compound this image, nations slapped extra tax rates on capital regularly including inheritance taxes, capital gain taxes, wealth taxes and dividend taxes. Such policies stifled economic growth by discouraging taxes and investments, resulting in significant economic hardships.
Since then, governments have however been racing to reform tax regimes and cut tax rates. Nowadays, top personal tax rates average only about 40%, while corporate rates have now decreased to about 27% on average. It is largely globalization that has triggered this change as opposed to ideology. Governments are reducing taxes as they fear investment and jobs will flee outside national borders.
Tax havens have contributed significantly to such positive developments by offering refuge to individuals wishing to avoid appropriately tax rates. Lawmakers have figured out that generating revenue by charging modest taxation rates is a better alternative to imposing high rates only to lose out.
Tax havens may even have a moral case. They protect individuals who are prone to political, racial, sexual or religious persecution. A majority of the population in the world lives in nations and regimes with unsatisfactory human rights protection, and citizens with assets are often a target of oppressive governments.
For such potential victims, depositing money in a tax haven offers vital protection. Even the UN, in a 1998 report that attacked tax havens, was compelled to admit that governments across the world spied on their people with the aim of maintaining political control for much of the 20th century. Political freedom can be boosted by the ability to hide from government purely personal information.
The OECD is attempting to boost its campaign against what it refers to as uncooperative tax havens. The truth is that these are the same haven assisting in getting better tax policies. The proposals are doomed to fail since tax havens are refusing to weaken their tax laws. They say it can only happen if all nations agree to it, something that is very unlikely.
Tax competition is directing tax policies in the right way, something that Puerto Rico tax haven is playing a significant role in this liberation process. One sure way of reducing evasion is lower rates and tax reforms. The reason why people evade taxes in the first place is because of the high rates, hence a reduction will do wonders.
For one, thanks to tax havens, the taxes of people living in developed countries are probably much less than they were thirty years ago. In 1980, the average tax rate for personal income was more than 67%, while corporate taxes was on average almost 50%. To compound this image, nations slapped extra tax rates on capital regularly including inheritance taxes, capital gain taxes, wealth taxes and dividend taxes. Such policies stifled economic growth by discouraging taxes and investments, resulting in significant economic hardships.
Since then, governments have however been racing to reform tax regimes and cut tax rates. Nowadays, top personal tax rates average only about 40%, while corporate rates have now decreased to about 27% on average. It is largely globalization that has triggered this change as opposed to ideology. Governments are reducing taxes as they fear investment and jobs will flee outside national borders.
Tax havens have contributed significantly to such positive developments by offering refuge to individuals wishing to avoid appropriately tax rates. Lawmakers have figured out that generating revenue by charging modest taxation rates is a better alternative to imposing high rates only to lose out.
Tax havens may even have a moral case. They protect individuals who are prone to political, racial, sexual or religious persecution. A majority of the population in the world lives in nations and regimes with unsatisfactory human rights protection, and citizens with assets are often a target of oppressive governments.
For such potential victims, depositing money in a tax haven offers vital protection. Even the UN, in a 1998 report that attacked tax havens, was compelled to admit that governments across the world spied on their people with the aim of maintaining political control for much of the 20th century. Political freedom can be boosted by the ability to hide from government purely personal information.
The OECD is attempting to boost its campaign against what it refers to as uncooperative tax havens. The truth is that these are the same haven assisting in getting better tax policies. The proposals are doomed to fail since tax havens are refusing to weaken their tax laws. They say it can only happen if all nations agree to it, something that is very unlikely.
Tax competition is directing tax policies in the right way, something that Puerto Rico tax haven is playing a significant role in this liberation process. One sure way of reducing evasion is lower rates and tax reforms. The reason why people evade taxes in the first place is because of the high rates, hence a reduction will do wonders.
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