Billions of dollars are yearly withheld from national taxation via a handful of tax havens. How does that affect the tax system and people's willingness to pay tax in developing countries with weak governmental institutions?
This is the point of departure for being[sic] a three-year research project carried out under the auspices of the Chr. Michelsen Institute (CMI) in Bergen. The project Taxation, Institutions and Participation (TIP) started in spring 2014. It is funded by the Research Council of Norway in the amount of NOK 15 million.
Little research has been done on how tax havens affect domestic taxation, political institutions and public participation in developing countries. There is therefore little documented knowledge about how the use of tax havens affects tax compliance and lobbying. The researchers want to find out how access to tax havens gives elites and other players incentives to block or promote institutional reforms.
The research team is working on the basis of a hypothesis that individual player's access to tax havens affects everything from the development of tax policy and national legislation to public debate and participation. The goal is to map these effects in developing countries, focusing on Zambia, Angola and Tanzania in particular.
(Score: 5, Interesting) by anyanka on Friday August 15 2014, @02:24PM
Norwegians are, for the most part, reasonably happy to be paying taxes (at least compared to the incessantly complaining Americans). This is usually attributed to the level of services provided by the state (which people are of course also complaining about, because that's what people do), but I wouldn't be too surprised that the relatively high level of economic equality and relatively low level of tax dodging has something to do with it.
(Fanciful tax avoidance schemes are of course also a problem in Norway, and people complain and think it's unfair, but it's at least considered morally dubious and publicly frowned upon (no "Good for them, they have a responsibility to the shareholders, etc").
(Score: 3, Interesting) by Anonymous Coward on Friday August 15 2014, @03:10PM
Norway is also one of only 2 countries in "Europe + North America" that doesn't have a documented history of 40+ years of financial irresponsibility by the Government
In most countries giving more money government is like serving alcohol to an alcoholic, it's a bad idea
(Score: 5, Interesting) by mrider on Friday August 15 2014, @03:23PM
Came here to say this, A.C. beat me to it. The fact is that I would have no problems whatsoever paying more taxes than I pay now, if the idiots in charge actually used the money for worthwhile things.
Doctor: "Do you hear voices?"
Me: "Only when my bluetooth is charged."
(Score: 3, Informative) by frojack on Friday August 15 2014, @05:38PM
Except the study did't say a thing about paying taxes. In fact the study hasn't even been completed and yet TFA and TFS (and you) are jumping to conclusions about affects on individual tax payers.
Quoting TFA:
So they arent even examining the issues at all, they are examining the effects of education and information (or lack there of). They've already concluded the systems are unfair, based on their socialist world view.
Sponsored by a pretty much cradle to grave socialist country, the conclusions jumped to are probably on the mark as to what the final published results will find. Still, its customary to let the experiment run its course prior to publishing and lauding the results.
No, you are mistaken. I've always had this sig.
(Score: 2) by mrider on Friday August 15 2014, @05:56PM
I wasn't replying to the article, I was replying to the O.P.'s point "Norwegians are, for the most part, reasonably happy to be paying taxes (at least compared to the incessantly complaining Americans)."
That would have no doubt been more clear if I had of block quoted that text before replying. I apologize for leading you down the wrong path...
Doctor: "Do you hear voices?"
Me: "Only when my bluetooth is charged."
(Score: 4, Informative) by bob_super on Friday August 15 2014, @03:43PM
Most countries do not prioritize their military-industrial-intelligence complex over 70000 structurally deficient bridges.
In most developped countries, people acknowledge a level of waste, but still trust their government (not the same thing as the approval rating, which is trusting _this_ government). And they massively take to the streets to remind the politicians not to stray too far.
(Score: 1) by Buck Feta on Friday August 15 2014, @04:00PM
Not to diminish their excellent job of managing, but they are also starting with a tremendous amount of natural resources (energy) on a per capita basis.
- fractious political commentary goes here -
(Score: 3, Informative) by cafebabe on Friday August 15 2014, @04:46PM
Unlike most countries, Norway is putting the surplus wealth from natural resources into a sovereign wealth fund. If I was Norwegian and concerned about health in old age, I wouldn't be worrying where the money would come from.
1702845791×2
(Score: 2) by frojack on Friday August 15 2014, @05:49PM
Really? All that money in the hands of politicians and you wouldn't worry?
Canada tried the same tactic in a couple of provinces with oil wealth and it was an utter and resounding fiasco. All the money was pissed away and the funds were broke.
Alaska did the same thing, and everyone in the lower 48 was up in arms because Alaskans get cash dividends from oil revenue and don't pay state taxes. And every year in the legislature one group or another makes yet another attempt to raid the funds and squander it on their pet boondoggle. (I lived there for 30 years and watched this happen every! single! year!).
The only thing preventing the politicians from spending it all or lining their pockets with oil revenue money is the dividend paid to each citizen. Its the third rail of Alaskan politics. It was the brain child of the best Governor Alaska ever had, Jay Hammond.
Alaska looked at Canada when they set up this scheme. Norway looked at Alaska when they set up theirs.
No, you are mistaken. I've always had this sig.
(Score: 0) by Anonymous Coward on Friday August 15 2014, @06:08PM
So in other words, its not specifically politicians that are the problem, but greedy, selfish fucks that want everything for themselves. Not all countries are obsessed with and worship selfishness and greed like Americans.
(Score: 2) by khallow on Friday August 15 2014, @09:48PM
Yea, but unlike those other countries, the US actually exists. What matters here is not whether people are greedy, selfish fucks - they all are. Norway is not different from the US because its people are different. It's different because the game is different. If you reward virtue, you get more virtue. If you penalize vice, you get less vice. Their society does that better than the US's society does. Do it the other way around (penalizing virtue and rewarding vice), and you'll get bad results as should be expected.
(Score: 4, Insightful) by bzipitidoo on Friday August 15 2014, @04:38PM
"(at least compared to the incessantly complaining Americans)"
Hey now, we have abundant reason to complain. The richest are total cheats. They cheat on taxes, cheat on paying their employees, cheat their companies by taking outrageous pay packages with very golden parachutes, cheat in the stock market, cheat the public with economic blackmail if we don't bail their sorry asses out when their cheating causes a recession, even try to cheat each other (it's sort of a game to them), and corrupt our government so it doesn't do anything about any of it. It's all close enough to legal that a competent lawyer can usually get them off any time they actually are called to account. And it's still not enough for those chiselers. You ought to see those guys in action in matters of petty change. Won't tip the waitress enough. Then they add insult by saying we're a bunch of sniveling whining moochers and slackers!
We ought to do more than complain. The super rich are lucky that so far, we haven't.
(Score: 1, Insightful) by Anonymous Coward on Friday August 15 2014, @06:01PM
And yet half the country wants to reduce their tax burden even further, even though they're already paying significantly less in taxes than everyone else. From what I can tell, at least the Bush Tax Cuts finally ended in 2012, but the 60 years before Reagan had them paying significantly higher rates, which didn't destroy the country. We need to raise their taxes back to historic rates, if for no other reason than to account for all the different ways they cheat the system.
(Score: 2) by Blackmoore on Friday August 15 2014, @09:50PM
i'm with you, we ought to roll back tax rates to Reagan era.
at least.
(Score: 2, Informative) by Anonymous Coward on Saturday August 16 2014, @02:48AM
Let's go back to the '60s and '70s when billionaires[1] paid a marginal tax of 70 percent (and things were very good).
...or to the '50s when billionaires[1] paid a marginal tax of 91 percent (and things were very good).
...or to the early '40s when billionaires[1] paid a marginal tax of 94 percent (and things were getting better after Wall Street wrecked the economy in the late '20s--when the billionaires'[1] tax rates was 25 PERCENT).
Marginal tax rate for billionaires[1] 1920 - 2010 [firedoglake.com]
Reaganomics (e.g. lower marginal tax rates for billionaires[1], lower capital gains taxes, deferred taxes) was the beginning of the sharp downturn for working class people.
The USA economy was strongest when the uber-rich paid a tax of at least 50 percent on excessive income and has gone to shit shortly after those fell below that mark.
[1] Modern equivalent
-- gewg_
(Score: 0) by Anonymous Coward on Friday August 15 2014, @08:53PM
I am intrigued by your ideas [19thcenturyart-facos.com] and would like to subscribe to your newsletter.
-- gewg_
(Score: 0) by Anonymous Coward on Saturday August 16 2014, @05:52AM
And they will implode and go away due to lack of money.
Decentralization and cooperation at the local level
among the 'masses' on the bottom of the socioeconomic
ladder appear to be the only peacful and nonviolent
solution to what is essentially a resource
redistrbution problem. The alternative could likely
be something like this:
http://en.wikipedia.org/wiki/French_Revolution [wikipedia.org]
The result was a pardigm shift that transformed
the world at large after a time of great violence
and bloodshed.
(Score: 0) by Anonymous Coward on Friday August 15 2014, @02:30PM
"Tax resistance is the refusal to pay tax because of opposition to the government that is imposing the tax or to government policy or as opposition to the concept of taxation in itself."
For example, refusal to pay some or all taxes that pay for war.
http://en.wikipedia.org/wiki/Tax_resistance [wikipedia.org]
How does this relate?
Don't play their game and it won't matter who is seeking tax shelter.
(Score: 1) by spiritfiend on Friday August 15 2014, @03:02PM
Do you know what the difference between the tax resistors cited in your report and modern tax dodgers? The former did not engage in activities that were subject to the taxes. For example, if you don't want your tax money going to support wars, don't get a job that earns enough money to pay taxes. You don't want your tax money to subsidize employee healthcare? Don't own shares in such a corporation.
(Score: 0) by Anonymous Coward on Monday August 18 2014, @08:14AM
not engaging in activities that are subject to taxes is impossible these days, you get taxed on pretty much everything
(Score: 5, Interesting) by Snow on Friday August 15 2014, @04:08PM
I live in Canada, and I make enough money that I almost certainly pay more in taxes than I recieve in benifits... For the most part, I'm okay with paying taxes. There is certainly wasteful spending in Canada, but not to the extent of the USA (mostly because we don't have the same amount of tax dollars to spend probably).
I love Canada, and know how lucky I am to live in such a great country. I like having roads to drive on, and a health care system where I can get medical care with no cost out-of-pocket. I'm not a huge fan of Steven Harper though. I think that he wants Canada to be more like the USA, wheere I would like to see Canada more like Europe.
I don't know what my point is... Maybe that I'm okay with paying taxes, even though I almost certanily pay more than my share.
(Score: -1, Troll) by Anonymous Coward on Friday August 15 2014, @04:15PM
Good, then you won't mind when we increase it.
Good boy!
Here is your biscuit. Now go play over in the corner.
(Score: 2, Informative) by Anonymous Coward on Friday August 15 2014, @04:45PM
I also live in Canada, and having lived in Europe for 10 years, it make cringe when I hear Canadians say that. So you want to us to be more like Europe. Let's see:
You want unemployment at 12 percent?
You want gasoline prices 1.5 to 2 times what they are now?
You want to live in tiny apartments in a polluted city?
You want your salary to be the same as here but your living expenses increased?
You want to deal with bureaucracy and red tape from overbearing governments?
If you answered yes, I have the solution for you: move to Europe. I moved to Canada for the values and opportunities it has to offer, not to see it made into a second Europe. We already have Europe, and it's not paradise. Go live there for a while and you will see how much people struggle.
(Score: 2) by Dunbal on Friday August 15 2014, @05:04PM
12 percent? Some parts of Europe would kill to have only 12% unemployment.
(Score: 3, Informative) by bob_super on Friday August 15 2014, @06:39PM
Do we really need to have another discussion on how the unemployment figures are not calculated the same?
Europe does have higher structural unemployment than the US/Canada. But outside of some specific crisis (your point), it's nowhere near twice as bad.
(Score: 2) by Grishnakh on Saturday August 16 2014, @02:27AM
What part of Europe are you talking about?
I've done a little research on relocating to Europe, and I've found that cost of living, among other things, differs dramatically from country to country and region to region. Denmark (Copenhagen) is very expensive, for instance, while eastern Germany (Berlin) is much cheaper than the NYC area where I currently live. The apartments there are much bigger than NYC apartments BTW. And the salaries are higher. In fact, the only thing that's more expensive is gasoline, and likely various consumer products and cars.
Are you talking about France, by chance?
(Score: 0) by Anonymous Coward on Friday August 15 2014, @05:21PM
"I make enough money that I almost certainly pay more in taxes than I recieve in benifits"
Certainly it seems like the Canadian school system let you down for one. Benefits.
(Score: -1, Flamebait) by Anonymous Coward on Friday August 15 2014, @10:28PM
Good Boy!
We have a gold star for you.
(Score: 2, Insightful) by Anonymous Coward on Friday August 15 2014, @04:58PM
America does logical absurdity like no other.
Everyone simultaneously wants everything but also believes it should be free while abhorring socialism.
Everyone acknowledges that their elected representatives are crooks, bought and paid for by special interests. They will defend the right of those interests to stay very monied even as those same interests work diligently to impoverish them.
(Score: 4, Insightful) by Dunbal on Friday August 15 2014, @05:15PM
You know it's one thing to make plans and draw conclusions about someone else's money because admittedly, none of us are rich. Certainly not THAT rich. Oh there may be a few multimillionaires among us, but Bill Gates, Warren Buffet, Carlos Slim or Zuckerberg rich? I doubt it.
I see it this way - if you pay a modest amount of tax, then a modest amount gets wasted by the government and the remaining portion actually goes to something useful.
If you pay hundreds of millions of dollars or even billions to the government then the amount that gets wasted is a huge mind boggling amount that makes the actual amount going towards something useful pale in comparison. Just because you earn lots of dollars doesn't mean you value the worth of a single dollar any less. If you do then I promise you that you will not be rich for very long.
Anyway back to my point: Convince him that there will be an ROI on his increased taxes and the rich guy will be in too. After all he already has much more than he'll ever need. This is where government fails. The politician tries to weasel his way into his pocket through political pressure, and the bureaucrat tries to do it through force via creation of new laws. Because the government feels it is owed this money and doesn't have to be accountable to anyone for what it does with it. Well I'm sorry, but it does. And thus you get flight of capital (usually legal), tax avoidance (100% legal although the government wishes it wasn't and even tries to allude nowadays that it's not), and moreover money laundering (a gray area - what exactly IS money laundering? It's whatever the government says it is) and outright law breaking tax evasion.
The government should have to work for its money like everyone else. Handing out free money to people in the form of salaries for make work jobs or worse still plain old hand outs - that's a useless lost cause. The US used to be successful because it invested in infrastructure which made and kept America competitive. Now it invests in cronyism, hand outs, oh and let's not forget a foreign policy that consists of setting the whole world on fire one country at a time.
Yeah well, I'll keep my money thanks.
(Score: 2) by frojack on Friday August 15 2014, @06:10PM
You are pretty much spot on.
But as Econ 101 will teach you, employing people doing things that are marginally useful is better than paying people to let them sit at home doing nothing and feeling useless. Misunderstanding that one fact makes for a lot of discontent with the level of "waste" in government.
"Waste" would be taking the tax dollars and burning them in a bonfire. At least the boondoggle yields the first derivative of taxation in the form of some (questionable) value being derived by providing a (somewhat pointless) job.
We'd all be better off if huge segments of government spending were refocused on infrastructure, bridges, roads, and fast railways, hell, even sports arenas, anything where there is a lasting product.
But in the absence of that, I'm perfectly happy to allow Elon Musk build space ships, and Bill Gates fight aids, because that ex-welfare queen and her surely attitude *cough* sweeping the lobby at the DMV really only provides a minuscule return on investment.
No, you are mistaken. I've always had this sig.
(Score: 0) by Anonymous Coward on Friday August 15 2014, @07:59PM
Give this a shot.
http://steshaw.org/economics-in-one-lesson/ [steshaw.org]
Basically look at the way our gov spends taxes thru the broken window fallacy.
anything where there is a lasting product.
Thats the trick. Make products that last. Make something people want to use. Create something or even fix something. Just handing out cash for cronyism or the welfare queen does not build new product. It destroys value as for either of those last two you need to take away from someone else to give to someone else. Who may or may not use it to create something. I really wish that book had a section on the circulation of money fib people like to use. It looks like they are creating value when the opposite is true.
(Score: 2) by khallow on Friday August 15 2014, @09:27PM
We'd all be better off if huge segments of government spending were refocused on infrastructure, bridges, roads, and fast railways, hell, even sports arenas, anything where there is a lasting product.
The thing is, that's not so great either. Japan has been doing that for the past twenty years after their own nasty recession in 1990. They've built plenty of infrastructure - for example, rebuilding Kobe after that destructive earthquake. The problem though is that the infrastructure they've built just isn't that valuable. The main outcome is to create one of the highest publicly owned debt per GDP of the developed world. They've impaired their future and just didn't get that much out of it.
(Score: 3, Interesting) by bob_super on Friday August 15 2014, @10:32PM
All that infrastructure came in really handy when the price of oil quadrupled during the Bush years. Japan imports almost all its energy, and would have quickly turned into Detroit if they had had the same per-capita energy usage as the US.
Same applies to their electricity. Their 54 nuclear reactors provided 31% of the electricity on March 10th 2011. They shut them down overnight (on a nuke scale), and still didn't cause the economy to go belly up (the earthquake, tsunami, and Fukushima did more damage).
Their infrastructure hadn't really bought growth, but it turned out pretty good as an insurance policy.
(Score: 2) by khallow on Friday August 15 2014, @10:50PM
Such as bridges to nowhere and rebuilding Kobe in concrete? That's a pretty ambitious claim to make.
(Score: 2) by bob_super on Friday August 15 2014, @11:19PM
Compared to my current overcrowded highway with no public transport alternative, a bridge to nowhere might actually make my commute faster, and save me gas! :)
*Most of the infrastructure came... [better?]
(Score: 2) by khallow on Saturday August 16 2014, @01:52AM
I'm willing to grant "some". Not "most". But that misses the point. It's rare to find some action that doesn't have any benefit at all. And this is a lot of money to burn over several decades for a rather poor insurance policy. They kept the lights on in this case at considerable cost, but are apparently in the process of scrapping a significant part of the infrastructure that was part of the insurance policy! What's going to provide the insurance policy the next time they have trouble?
(Score: 0) by Anonymous Coward on Saturday August 16 2014, @04:53AM
Even a "bridge to nowhere" is an investment and improvement - providing access means allowing growth. I really don't get why people are so up in arms about building a bridge; how else is anybody supposed to get to the area? Not everybody can afford to buy or charter a helicopter or plane. But fuck the poor, right?
(Score: 2) by khallow on Saturday August 16 2014, @01:51PM
Bridges aren't free. The "bridge to nowhere" is something that provides at best a weak benefit for considerable cost. Your use of the terms "investment" and "improvement" imply that the infrastructure has a positive return on investment and is better than not having the infrastructure and not spending the money on that. That need not be the case. I think Japan and its two decade old economic stagnancy illustrates the perils of ignoring the costs of building massive amounts of infrastructure.
The poor aren't helped by squandering public funds and resources on low utility infrastructure.