If individuals and companies don’t have to pay any tax how does the government make money for general upkeep of the national infrastructure and to pay government salaries?
In: Economics
If a corporation officially moves (for financial purposes only) to a tax haven, even if they pay a low percentage of their income as taxes into the tax haven compared to what they would pay in other countries, the tax haven is essentially getting free money. Even if the tax haven takes no taxes at all, it can make money just on associated fees for what is essentially no burden to their economy. The corporation isn’t bringing employees to the tax haven, so the tax haven doesn’t have to build roads or housing for them, doesn’t have to build schools for their kids, doesn’t have to provide pensions for their retired workers. The tax haven just takes fees and shuffles paperwork.
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