The Great Debate: Tax Havens -- Good or Bad

In the wake of the German government's criminal bribe paid for stolen bank data from Liechtenstein, tax collectors in several countries, including the U.S., are looking into assets allegedly hidden in the principality.

As I predicted, the political Left is doing its best to distort the facts into yet another phase in their long-running anti-tax haven campaign. As usual, the Paris-based Organization for Economic Cooperation and Development (OECD), which listed Liechtenstein, along with Andorra and Monaco, on a list of "uncooperative tax havens" has joined the cry.

Radical critics accuse tax havens of worsening poverty and inequality by allowing the rich to avoid obligations to the societies where they built their wealth. Conservatives argue that tax havens play a positive role in the global economy by forcing governments to stay competitive on tax policy.

The Wall Street Journal asked Dan Mitchell, a senior fellow specializing in tax policy at the libertarian Cato Institute, to discuss the issue with Raymond Baker, a guest scholar at the left-leaning Brookings Institution, where he researches cross-border money flows.

Baker researches and writes about the what he claims are linkages between corruption, money laundering, poverty and inequality. His book, Capitalism's Achilles Heel: Dirty Money and How to Renew the Free-Market System, was recognized by the Financial Times as one of the best business books of 2005. Having read it, I would call it an anti-capitalist, prejudiced screed.

Our friend and associate Dan Mitchell is one of the nation's experts on the flat tax and has been the leading international voice in the fight to preserve tax competition, financial privacy, and fiscal sovereignty. In addition to his Cato Institute responsibilities, Dan co-founded the Center for Freedom and Prosperity, an organization formed to protect international tax competition. Prior to joining The Cato Institute in 2007, Dan served as a senior fellow at the Heritage Foundation. Dan Mitchell earned a Ph.D. in economics from George Mason University and undergraduate and Masters degrees from the University of Georgia.

Their debate is well worth reading and you can find it at: http://online.wsj.com/article/SB120593814650448571.html%20?mod=WSJBlog