As long there is finance there will be havens.

The revelation that a law firm in Panama was helping to set up shell companies to conceal wealth, known as the Panama Papers, has put many politicians in trouble. David Cameron was forced to publish his finances and the Prime Minister of Iceland was forced to resign. In the US Bernie Sanders is campaigning on increasing taxes on the rich to help the poor. In India tax avoidance is a hot topic. The government is actively seeking money hidden abroad. But the government has a double tax avoidance treaty with Mauritius which allows companies and non-residents to avoid paying taxes in India. No one knows how much Indians are hiding abroad but it is estimated to be around $181 billion. The tax department admits that it cannot collect Rs 7 trillion worth of taxes because some are under litigation, in some there are not enough assets and in some the payee has disappeared. There is great rage at how the rich are able to game the system to avoid paying taxes at home by hiding money overseas. They employ an army of accountants and lawyers to hide their money through complex financial instruments, which are very difficult to trace, and can pay off corrupt politicians to protect them. But is it all corrupt? Everyone wants to be rich without having to take risks or having to work hard. This is what Charlie Munger, Warren Buffet's deputy thinks," Of course the public market, which operates every day with transactions, is an ideal casino. There is a whole bunch of people who want to own a casino and make a lot of money without losing on inventories or credit..." And again," Even if you do that very honestly, I don't consider it much of a life. Just being shrewd about little pieces of paper, shrewder than other people, is not and adequate life." We are being constantly harangued not to buy gold but to invest in stocks or mutual funds because a deep financial market provides the money for new investments, which create new jobs. Trouble is if you tax too heavily it will just move to another part of the world where taxes are lower and we lose out. Recently the US government stopped a $160 billion merger between Pfizer and Allergan because that would have allowed Pfizer to become domiciled in Ireland where the corporate tax rate is 12.5%. Bernie Sanders is campaigning on higher taxes on the rich. US laws demand that Americans living abroad have to pay tax in the US even though they have paid tax where they live, forcing some to renounce US citizenship. Sanders receives $174,000 salary as a Senator and gets $46,213 from Social Security. In India we get nothing in return for the taxes we pay. The only solution is to have uniform tax rates and benefits in every country in the world. There will be no need for tax havens. But then how will politicians throw handouts to win elections? Therein lies the nub of the problem.