An end to tax havens and banking secrecy?

If there’s action behind the G-20’s words, that would be astoundingly good news.

I have no idea whether there’s any meaning behind the pronouncement from the G-20 summit that the era of banking secrecy and tax havens is over. But if there is, that’s extraordinarily big, and extraordinarily good, news. The ease with which the wealthy can evade taxes on unearned income as long as Switzerland and the Caymans and Macao are there to help puts a limit on the extent to which redistribution via taxation is feasible. And of all the forms of distributional intervention, taxation is the least likely to carry large deadweight losses. So if we want to address rising inequality &#8212 which the current crisis has temporarily interrupted, but which may still be the long-term trend &#8212 then addressing the tax-and-banking-haven issue is a necessary pre-requisite.

I find it surprising that two center-right politicians, Sarkozy and Merkel, were the ones pounding the drum for this, but credit where it’s due.

Author: Mark Kleiman

Professor of Public Policy at the NYU Marron Institute for Urban Management and editor of the Journal of Drug Policy Analysis. Teaches about the methods of policy analysis about drug abuse control and crime control policy, working out the implications of two principles: that swift and certain sanctions don't have to be severe to be effective, and that well-designed threats usually don't have to be carried out. Books: Drugs and Drug Policy: What Everyone Needs to Know (with Jonathan Caulkins and Angela Hawken) When Brute Force Fails: How to Have Less Crime and Less Punishment (Princeton, 2009; named one of the "books of the year" by The Economist Against Excess: Drug Policy for Results (Basic, 1993) Marijuana: Costs of Abuse, Costs of Control (Greenwood, 1989) UCLA Homepage Curriculum Vitae Contact: Markarkleiman-at-gmail.com