Abstract

http://ssrn.com/abstract=1718184
 
 

Footnotes (251)



 


 



Why are There Tax Havens?


Adam H. Rosenzweig


Washington University in Saint Louis - School of Law

November 30, 2010

William & Mary Law Review, Vol. 52, No. 3, 2010
Washington University in St. Louis Legal Studies Research Paper No. 10-11-03

Abstract:     
Recently, the issue of tax havens has risen to the fore of the fiscal policy debate, with tax havens being singled out as the root cause of many of the fiscal shortfalls plaguing the governments of the world. Surprisingly, however, although there has been a fair amount of literature on why tax havens are harmful to the modern international tax regime, which countries become tax havens, and what means are available to combat tax havens, there has been less written specifically on the underlying question of why, notwithstanding all these points, tax havens exist in the first place, or why they persist in the face of such overwhelming criticism.

To this end, this Article will propose for the first time that the focus of the international tax laws of wealthier countries, such as the United States, on capital neutrality – or making the flow of capital across borders easier and cheaper – can actually create or exacerbate the incentives necessary for poorer countries to act as tax havens. This can be thought of as a “capital neutrality paradox” in that it is the pursuit of capital neutrality – meant to increase worldwide efficiency – which leads to more countries acting as tax havens, effectively undermining worldwide efficiency. Consequently, punishing such countries in response would also prove counterproductive, because it would only exacerbate these incentives.

This “punishment paradox” in connection with the “capital neutrality paradox” can fundamentally alter the way in which the law should conceptualize and respond to the issue of tax havens, potentially even questioning the role of capital neutrality itself as the primary policy focus of the international tax regime.

Number of Pages in PDF File: 75

Keywords: Tax Havens, Tax Competition

JEL Classification: K34

Accepted Paper Series


Download This Paper

Date posted: December 2, 2010 ; Last revised: December 14, 2010

Suggested Citation

Rosenzweig, Adam H., Why are There Tax Havens? (November 30, 2010). William & Mary Law Review, Vol. 52, No. 3, 2010; Washington University in St. Louis Legal Studies Research Paper No. 10-11-03. Available at SSRN: http://ssrn.com/abstract=1718184

Contact Information

Adam H. Rosenzweig (Contact Author)
Washington University in Saint Louis - School of Law ( email )
Campus Box 1120
St. Louis, MO 63130
United States
Feedback to SSRN


Paper statistics
Abstract Views: 1,501
Downloads: 328
Download Rank: 51,400
Footnotes:  251

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo2 in 0.313 seconds