When people and businesses move from one tax jurisdiction to another, they do so because the jurisdiction they are moving to has a less confiscatory tax regime. The jurisdiction with the more onerous regime will suffer in the short run, but it should welcome the ability of people and businesses to vote with their feet when it comes to choosing tax jurisdictions. After all, how better to signal to the jurisdiction with an onerous tax structure that it may want to reconsider its tax policies and ease up the tax burden on its citizens? Allowing for the existence of tax havens means allowing for the free flow of information concerning the nature of various tax jurisdictions. That information can, in turn, be used to improve tax policy in a jurisdiction that is experiencing flight away from it.
But don’t tell that to President Obama. As far as he’s concerned, you’ll live under an onerous tax regime, and you’ll like it.
Here are some questions that can be asked at the next Presidential press conference: “Mr. President, just what is it that you have got against competition? And why are you trying to get rid of it when it comes to tax policy? Are you somehow afraid that competition might actually improve policy?”
Oh, and Dan Griswold piles on.