Monday, July 19, 2010

Pirates feeding beasts

Monty Python may have suggested that it it best to "tax all foreigners living abroad," but James S. Henry has has actually come up with the details. Writing in the July 19, 2010, Forbes, he says: "There is at least $15 trillion in private wealth sitting offshore. Let's tax it." (not available at the Forbes site). Here is how Henry would get it done:

"The pile of offshore anonymous loot is now large enough so that even a very modest 0.5% wealth tax would yield at least $75 billion a year. ... The majority of offshore wealth is managed by 50 banks." All of them have known addresses in places like NYC, London, Amsterdam, Zurich, Geneva, Frankfurt, Paris. "These highly visible institutions should be required to withhold a modest 0.5% annual tax, collected quarterly, on the value of their clients' assets. ... Only anonymous wealth should be taxed. If the beneficial owners can show that they're paying taxes on their offshore assets back home, they can claim rebates. Most will just pay up."

Two problems. First, the new taxpayers will not remain sitting ducks for long. They will refine their money laundering. Second, new revenues may just "feed the beast." But that's an old story. I prefer Henry's plan to all the others that I see coming down the pike.