Moving Money: International Financial Flows, Taxes, & Money Laundering

123 Pages Posted: 4 Nov 2013 Last revised: 6 Jun 2014

See all articles by Richard K. Gordon

Richard K. Gordon

Case Western Reserve University School of Law

Andrew P. Morriss

Texas A&M School of Innovation; PERC - Property and Environment Research Center

Date Written: October 20, 2013

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 $21-$32 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 anti-money 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.

Keywords: tax justice, money laundering, anti-money laundering, capital flows, tax evasion, offshore financial centers

Suggested Citation

Gordon, Richard K. and Morriss, Andrew P., Moving Money: International Financial Flows, Taxes, & Money Laundering (October 20, 2013). Hastings International and Comparative Law Review, Vol. 37, No. 1 - Winter 2014; U of Alabama Legal Studies Research Paper No. 2348144; Case Legal Studies Research Paper No. 2013-21. Available at SSRN: https://ssrn.com/abstract=2348144

Richard K. Gordon

Case Western Reserve University School of Law ( email )

11075 East Boulevard
Cleveland, OH 44106-7148
United States

Andrew P. Morriss (Contact Author)

Texas A&M School of Innovation ( email )

1249 TAMU / 645 Lamar St.
College Station, TX 77843
United States

PERC - Property and Environment Research Center ( email )

2048 Analysis Drive
Suite A
Bozeman, MT 59718
United States

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