It’s high taxes, stupid, that drive out good businesses and destroy jobs.As regular readers know, we libertarian free spirits at The Sovereign Society love tax competition among nations. Taxes are a just another cost of doing business, personally or commercially.

Therefore, we believe you should have the inherent right to choose to your business activities in a country that imposes no, or lower taxes. It’s insane to do business in socialist Germany, where taxes confiscate 50% of your income, when you could relocate to Liechtenstein or some other tax haven where taxes are minimal.

But tax hungry politicians in greedy welfare states around the world just don’t get the message: It’s high taxes, stupid, that drive out good businesses and destroy jobs. In this age of globalization and instant electronic financial activity, modern communications and transport links administrative bases can be located almost anywhere.

Thus, last week the news broke from London that Gordon Brown’s Labour Party has driven Internet search giant Yahoo to move its European headquarters from London to Zurich. The reason? Yahoo was chased away by ever higher British taxes. The news came a few days after Labour announced a new annual tax levy of £30,000 (US$62,000) on non-domiciled foreigners who have lived in Britain for at least seven years.

Yahoo becomes the latest of many multinational businesses being lured away from the U.K. by rival countries with lower corporate taxes. Google, despite employing several hundred staff in London, opted to base its European headquarters in Zurich.

Videogame maker Electronic Arts moved its engineering staff from London to Zurich. EA’s rival SCI last month announced it was moving dozens of jobs from Wimbledon to Canada.

Ireland, Switzerland, the Netherlands, Bermuda and Singapore have been the winners with the U.K.’s former EU-leading position as an attractive tax regime at risk, especially since other EU nations introduced lower tax regimes.

Even at a new 28% corporate tax rate, Britain is still well above other countries including Switzerland, where the national average rate is nearer 20%. The Swiss have succeeded in luring a host of big companies in recent years.

More are expected to follow in the wake of the U.K.’s new tax on non-doms. (Meanwhile, the United States government stupidly imposes one of the highest corporate taxes in the world, 35% plus – then wonders why American companies move offshore.)

Swiss councils have been directly approaching wealthy London non-doms running hedge funds and other investment businesses to highlight the benefits of moving to the Alpine haven.

Procter & Gamble and Colgate-Palmolive, the giant U.S. companies, both elected to site their European HQs in Switzerland. Kraft Foods recently left the U.K. for Switzerland. Switzerland is low in tax because its regions, known as cantons, compete against each other.

BOB BAUMAN, Legal Counsel

P.S. The same strategy could work for you and your small business. Discover how you can benefit from low taxes in Switzerland in my new book, Swiss Money Secrets, click here.