Tax havens

Instead of worrying about keeping their own taxes low and competitive, some big countries like Germany are pressuring smaller ones into cooperating in their tax-evasion investigations. Matt Lynn explains. He begins:

There has been little mistaking the fury of German Chancellor Angela Merkel. Over the past few weeks, she has been leading an all-out assault on her tiny neighbor Liechtenstein.

Its crime? Not cooperating in Germany’s investigation of alleged tax evaders.

The tussle between Germany and Liechtenstein is just the overture to a wider battle between the big European nations and the tiny low-tax principalities. Next up: Monaco and Andorra.

And yet, the attacks are completely unfair.

Places such as Monaco and Liechtenstein have a right to keep banking secrecy and shouldn’t be forced to act as tax enforcers for other countries. Germany should spend more time worrying about why so much wealth is fleeing its borders — and less time picking on places a mere fraction of their size.

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