Tax Havens

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A tax haven is a country that offers foreign corporations and individuals relatively low corporate and income tax rates, with a politically and economically stable environment. Some tax havens are Switzerland, Hong Kong, Bermuda, Ireland, and the Cayman Islands. The United States government has been fighting against the movement of corporations because it is not collecting taxes from these corporations that it could have used to reduce government debt. However, corporations have found loopholes that exempt them from United States tax laws. Companies are moving their headquarters across seas for tax benefits to keep their shareholders content. The United States government needs to reduce its corporate tax system so the country does not lose more companies, jobs, and money to foreign entities. Corporations have been moving to foreign countries for decades. Bermuda claims to be the first tax haven due to legislation passed in 1935 permitting offshore companies, however this claim to fame is debatable due to the similar legislation passed by Lichtenstein in 1926 to attract offshore capital. Switzerland also became a prominent tax haven after World War One. While other European countries had to raise their taxes to help pay off war debt, Switzerland, having been neutral in the war, had an influx of business. Originally tax havens were used to avoid personal taxation, but starting in the 1950’s companies have been moving to them because of new jurisdiction. The United States corporate tax rate is one of the highest tax rates in the world, at around 35 percent. Countries such as Switzerland and Ireland have become the new tax havens. Zug, Switzerland, a small, medieval mountain city, has a tax rate of fifteen to sixteen percent, whi... ... middle of paper ... ...bsnews.com/stories/2011/08/14/60minutes/main20091720.shtml>. Crump, Richard. "A Tempestuous History." Reactions (2008): 4-9. Business Source Premier. EBSCO. Web. 1 Oct. 2011. "Ireland top location for US Multinational Profits." Finfacts Ireland. Finfacts, n.d. Web. 9 Oct 2011. . Gurría, Angel. "Improve tax fairness and help the developing world." OCED. Organisation for Economic Co-operation and Development, 24/04/2009. Web. 9 Oct 2011. . Rahn, Richard W. "In Defense of Tax Havens." Wall Street Journal - Eastern Edition 18 Mar. 2009: A15. Academic Search Premier. EBSCO. Web. 1 Oct. 2011. Ruggeri, Amanda. "Obama Takes Aim at Offshore Tax Havens." U.S News And World Reports. 04/05/2009: n. page. Web. 9 Oct. 2011

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