Even President Obama allowed his less than impressive Secretary of the Treasury to make some noise against tax havens.

The orchestrated battle of words hurled at offshore financial centers got so heated that British PM Gordon Brown felt obliged to demand for “the end of tax havens.”

This belated anti-tax haven baloney comes from Her Majesty’s first minister whose government is in charge (and has been for a decade) of the United Kingdom’s many tax havens in its overseas territories (Bermuda, the Cayman Islands, British Virgin Islands, the Turks & Caicos) and its Crown Dependencies (the Channel Islands of Jersey and Guernsey and the Isle of Man), plus Gibraltar.

Does the Rt. Hon. Gordon believe that the City of London really can absorb all the dispossessed refugee bankers and trust officer that will flood in from these British world-class financial centers if he and the G-20 high tax goons shut them down? (Some unprincipled candidates, desperate for re-election, will do just about anything for votes!)

Spend vs. Regulate

The proponents claimed the G-20 meeting was not only going to solve the international economic crisis, (either by more Obama stimulus spending, or forced global regulation), but for desert, the G-20 would serve the collective severed heads of all tax havens displayed on a platter.

This entire hypocritical anti-tax haven campaign, as I have oft noted, is but an extension of the phony blacklists that have streamed for years from the tax-exempt minions at the Paris headquarters of the Organization for Economic Cooperation and Development (OECD), a taxpayer financed, pro-tax mouthpiece for the G-20 major nations who pay their salaries.

The OECD invented the blacklist and has used it skillfully as a public relations ploy to smear tax havens.

But in a classic case of removing the wind from the sails, the OECD blacklist ploy deflated when Switzerland, Austria, Luxembourg, Belgium, Hong Kong, Singapore, Liechtenstein, Andorra and Monaco, among others, all announced their agreement to broader but limited tax information exchange.

Even German foreign minister Steinbrueck, one of the most caustic anti-tax haven critics, has said he does not think G-20 leaders would come up with a blacklist of tax havens now. “As far as I see, there will be no such list at the London meeting,” he said.

Despicable Communiqué

When I asked one the leading American tax experts, Dan Mitchell (left) of the Cato Institute, what he thought the G-20 outcome might be he said,: “To be honest, I’m not sure what to expect from the G-20 meeting, other than a despicable communiqué attacking tax competition. My guess is that the real enemy is still the OECD, and the G-20 is just engaging in public relations warfare.”

As The Telegraph’s James Kirkup writes,: “The transatlantic disagreement over stimulus vs. regulation isn’t a full-blown row yet, but it’s not far off, and the still-skeletal Obama administration has enough worries at home without looking for more abroad. Better for the president to play safe and sign something anodyne in London.”

List Grows Long

The Swiss daily Tages Anzeiger reported that in a letter dated March 5 to British Chancellor Alistair Darling, OECD chief Angel Gurria provided an anti-tax haven blacklist including Switzerland and Singapore, as well as territories such as the Cayman Islands, Andorra and Montserrat.

The OECD branded 46 countries and territories for “insufficient progress” in meeting standards on tax cooperation and banking secrecy. (To the OECD that means an end to all financial privacy and automatic exchange of tax information among nations, as well as uniform higher taxes in all jurisdictions).

The OECD list also included Costa Rica, Chile, Grenada, Guatemala, Hong Kong, Liberia, Panama, the Philippines, San Marino and Uruguay, as well as Gibraltar, Guernsey and Jersey and a host of Pacific and Caribbean islands.

How Many Legions?

But as the brutal Soviet dictator, Josef Stalin was reportedly to have said about the influence of his enemy, His Holiness, the Pope,: “How many legions does the Pope have?”

The Pope was said to have responded through Stalin’s Foreign Minister, Molotov,: “Tell your master he will meet my legions in Eternity.”

Well, the OECD is loud and demanding, but it has neither any enforcement legions norand certainly not any heavenly allies.

The Tax Haven Test

So remember that on April 2nd, if tax havens and offshore finance are anything more than a minor part of the “global new deal” struck in London, then the G-20 global economic meeting will have failed.

And no matter what the G-20 does, tax havens will still be with us, fortunately.

Source: How to Gauge the Coming Failure of the London G-20 Meeting

With its world-class opera, museums, and galleries, Austria is truly one of the world’s most civilized countries. Vienna, its capital, is a cultural treasure. Indeed, Mercer’s, a major human resources consultancy ranks Vienna as the second most desirable city to live in the world (behind Zurich)—and Vienna is much more affordable. And within an hour’s drive of Vienna, you can visit three different countries: the Czech Republic, Hungary, and Slovakia.

Austria is also a popular haven for English-speaking expatriates. While you won’t find the concentrations of U.S. expatriates that you would in places like Costa Rica, Panama, or London, you’ll find a high quality of life and reasonable living costs. And those costs have come down considerably in the last year, thanks to eroding real estate prices and a weakening euro.

What I appreciated about Austria more than anything else during the two years I lived there is that the cities are built for living. They’re not “urban shells” that fill up during the day, only to empty out at night as workers return to their suburban homes. And they’re built on a human scale that makes them easy to navigate without a car.

I left Austria because it was impossible to obtain a residence permit that permitted me to operate a small business without hiring numerous Austrian employees that I didn’t need. But if you can support yourself without working in Austria, it’s usually possible to obtain a residence permit. Even without one, you can stay in Austria for 90 days on a U.S. passport without any visa formalities.

If you’re interested in possibly living in Austria, I highly recommend a visit to the country. It’s more affordable than it’s been in years. While you’re there, consider opening an account at an Austrian bank—your dollars will purchase 20% more euros than they would have only a few short months ago.

If you want to live full-time in Austria, I’ve recently set up an affiliation with a firm that can help you obtain legal residence there. They can assist with the application forms (in German, naturally), help negotiate the quota system under which most categories of Austrian residence are awarded, and provide introductions to English-speaking real estate agents to find suitable accommodation. Since they’re affiliated with an international tax consulting company, they can even help file your U.S. tax returns.

Source: Austria: Not Just a Financial Haven

This from The Sovereign Society:

Last week, tax-hungry officials from the increasingly socialist countries of Germany and France declared another round in their long running war on Switzerland.

Their aim once again was against traditional Swiss bank secrecy, which the Franco-German politicians claim is little more than a cover for massive tax evasion. As usual, they didn’t offer any proof for this claim.

Over several centuries and during two World Wars, peaceful Switzerland always has maintained its traditional neutrality. It’s kept out of numerous wars involving both France and Germany, usually with the latter attacking the former.

The last time a war of sorts was declared against Switzerland was in George and Ira Geshwin’s 1930 Broadway musical hit, Strike Up the Band. In the musical, the plot centered on a Babbitt-like American cheese tycoon who tries to maintain his monopoly on the U.S. market by convincing the United States government to declare war on Switzerland.

I suspect that the current effort by France and Germany will be just about as successful, (but much less entertaining), as Gershwin’s spirited musical militarism.

Another Skirmish – Another Show!

Reacting to these renewed pressure from European Union officials, the Swiss government vehemently defended its tax system and its financial privacy.

This may look just like another episode in the decade-old, anti-Swiss political road show, but there’s one new tactic. This time, EU cronies are using the current world economic disruptions as bogus proof that tax havens cause recessions! Please.

Tax-hungry politicians have repeatedly criticized Switzerland for its low taxation and banking secrecy laws. Biased critics claim that these laws provide European citizens with loopholes for evading taxes in their own countries.

Naturally, these anti-Swiss demagogues ignore the fact that Switzerland participates fully in the EU tax directive program. This means Swiss officials already collect taxes from foreign account holders and pay it to their home EU governments.

The most recent criticism coincides with a rapidly spreading global financial crisis that has prompted governments worldwide to spend billions of dollars to bailout ailing banks. With a recession looming in the U.S. and Europe, governments are grasping at any straw to stop a sharp fall in tax income.

Swiss Banks Don’t Know the Meaning of the Word “Surrender”

Economists doubt, however, Switzerland will give up its banking secrecy or radically adjust its tax laws. They’re saying the country is strong enough to defend itself against the EU’s complaints. They note that Switzerland, as a member of the Organization for Economic Cooperation and Development (OECD), can effectively veto any decision by the OECD to blacklist it.

According to EU estimates, the world’s tax havens, not including Switzerland, have attracted around US$5 trillion to US$7 trillion in assets because of low or nonexistent taxation. Swiss banks manage around US$4 trillion in assets, about 50% from foreign individuals and institutions.

At present, only three European countries (God bless them!) – Liechtenstein, Monaco and Andorra – are on the OECD’s tax haven blacklist.

Source: Life Imitates Art: War Declared on Switzerland

I studied the soldier’s crisp brown uniform. It looked like something you’d wear to a dress party. His black patent leather shoes matched his belt and the peak of his hat. The gold buttons on his sleeve were so shiny they could decorate a Christmas tree.

The politician turned to the soldier. He took a whispered message. Then he dismissed him with a flick of the wrist…

Tito Saguier is a senior member of Paraguay’s government. Last week, Tito invited me to the senate for a cup of coffee and a discussion about Paraguay’s future.

Soldiers escorted us everywhere we went. Other soldiers opened doors and saluted as we walked past. A female soldier stood at attention at the door to Tito’s office. She wore the same pressed uniform as the male soldiers, except, instead of trousers, she wore a mini skirt with knee-high Nancy Sinatra boots.

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Paraguay has a new government. It just won power. The old government held power for 61 years. I wanted to know how this new government would behave. Would those in power continue to steal? Would they decrease the size of government? Would they decrease regulation and taxes?

An investor has several reasons to take a close look at Paraguay… Itaipu is the world’s largest hydroelectric dam. Thanks to Itaipu, Paraguay generates 10 times more electricity than it needs. Per person, Paraguay has access to more free energy than any other country on Earth. This energy will never run out… and it’s clean.

There are few taxes in Paraguay… and a small government. It has no external debt and no currency restrictions. The Paraguayan currency – the guarani – has risen almost 50% against the dollar in the last couple of years… and is the best performing currency in the world this year.

Paraguay has this interesting geographical location right between Brazil and Argentina. Both of these countries have huge populations compared to tiny Paraguay. Paraguay can make a fortune trading with both. Plus, Paraguay is a member of the Mercosur, the free trade agreement that also includes Brazil, Argentina, and Uruguay. Goods produced in Paraguay are not subject to Brazilian and Argentine tariffs.

Paraguay is very cheap and unknown. There is no industry, and the stock market is tiny. And there’s a potential trigger for a rally: The Argentine government has raised export duties on soybeans to 40% and banned the export of beef. I found evidence Argentine farmers are about to rush into Paraguay, where ranchland is cheap and the politicians don’t steal their profits.

Unfortunately, I didn’t get the answers I was looking for from Tito Saguier. At one point, I asked him for details on Argentine and Brazilian import duties. He didn’t have an answer. He wasn’t familiar with the trade terms of his neighbors.

And he was full of bland generalizations. “We want to increase economic production… and encourage foreign investment,” he would say without any further explanation.

I think Paraguay is ripe for investment. Let’s hope the government doesn’t get in the way…

Good investing,

Tom

Source: What I Heard from a Government Official in a Small Tax Haven