Freudian slip - I mean tax haven. It seems that the G20, as part as their plan to save the world from total financial meltdown, is cracking down on tax havens, as the tax revenues are needed in this time of hardships and some claim that "culture of banking secrecy had worsened problems in the global economy". Is this a slippery slope which will reduce freedom? Unlikely, for to paraphrase the UK stance "tax avoidance may comply with the letter of the law but not with its spirit." No wait, never mind.
Is the stationary bandit learning to walk?
But I must agree with this crackdown, for several reasons I will list below. Before reading further: take a minute or so to consider - is this crackdown good or bad? Why?
An informal poll taken on this blog indicates good idea (1 vote) is overwhelmed by bad (3) and evil (2), with nobody saying "who cares?" (0). Small sample size, and not a random sample either, but interesting. My first reaction was between "evil" and "bad", but I further considered and arrived at "good" - here is why.
If someone is a citizen of nation X they are bound by the rules of nation X. Most free countries (all of OECD nations?) allow you to give up your citizenship - if you don't want to pay for the benefits of citizenship, and you are ultrarich, then perhaps you should give up your passport and rights and get citizenship in whatever country you are parking your cash in. They will likely be happy to take you in. Most nations like people with money, and people with lots of cash are the only ones who really do have the freedom to walk away. They also have some power to change things - if they are forced to feel the pain that others feel they may take more of an interest in changing their nations for good. This "walk" argument is somewhat weak and overused, but here both the consequences (positive change in laws) and the current situation (often active law breaking) suggests it is legitimate to make.
Also on the pro side, we will perhaps see hypocrites like Bono and many other "left wing" proponents get their just deserts and have to pay taxes for the programs they petition governments for - instead of their current situation of tax avoidance and simultaneous pleading for people and governments to help the needy. Shake some of your pocket change out Bono. This is a small, but entertaining, benefit.
In the narrow sense this, the tax haven crackdown, will reduce freedom - but of (mostly) the most free people in the world. In addition, the "loss of freedom" comes from a process of anarchy (international relationships is one of anarchy) and one of voluntary behaviour that does not use force (tax havens are "merely" excluded from benificial trade if they do not conform - standard free market stuff), and, to repeat, if the ultrarich people and companies are forced (by their nations) to pay outrageous taxes in their countries they will either (1) start pushing to change them, or (2) walk, both of which will tend to improve tax structures and freedom.
I do not (sadly) know any strong libertarians, but I suspect they will find it hard to argue against this crackdown - they may think that taxes are a moral evil, but anarchy and noncoericive methods are behind the crackdown, and if they are consequentualists they will have to consider the force for positive reform that will occur - unintentionally this move could reduce tax rates.
So start cracking away G20!