Taxes should be collected, paid and used, only as a result of a harmonious relation between citizens and governments.

If we are to develop for systems that “Protect and increase tax revenues by implementing multilateral automatic information exchange”, these should go hand in hand with equally automatic systems that make certain that the way government spends such tax revenues, is in agreement with what was promised to the tax-payers. Otherwise we might run into deadly efficient Sheriffs of Nottingham collecting taxes for obnoxious King Johns, without even having a Sherwood Forest where to hide.

I repeat nothing works better against tax havens than tax heavens. And if we do not get those heavens we better keep some havens.

Tax evasion is often described in terms of countries losing money. That is not entirely correct. It is the government of a country that loses the right to administer the evaded tax funds… and sometimes that is not all bad.

There are cases in which it would seem it should be a civic duty to escape the payment of taxes, so that those resources are not dilapidated and can be better used defending the country.

In Venezuela its government gives away in free gas more than all its health, education and social spending put together. Has not a government that does that forfeited its right to tax the citizens?

Irresponsible governments should not have guaranteed access to any type of information about their subjects.

Let us be careful with any Tax Collector's Unite call... they might all belong to a small mutual admiration club, with mutual interests and an overpowering group solidarity.

On a global scale, on an accumulated basis, there is certainly some need for tax-havens, meaning for some Sherwood Forests

Not everywhere, but truth is that in the majority of countries, the need of many citizens for a safe-haven, a Sherwood Forest, so as to escape from bad Prince Johns’ Sheriffs of Nottingham who, skimming them, just waste away fiscal income, surpasses by far the needs of all citizens for Robin Hoods able to skim some of the “filthy” rich. 

You have to make up your mind whether you are a Sheriff of Nottingham, or a Robin Hood, you can´t be both. 

Nothing as effective against tax-havens than tax-heavens

There is an underlying and never questioned premise that guides most discussions today, and that is… If all profits are taxed and all taxes are paid then the world is saved. 

I do not want to be a party pooper, and I definitely do not suggest, much less instigate, we should evade paying our taxes, but... are we really sure that a tax paid will be more productive than a tax withheld? 

What if we all have to go the route of an economia sommersa, and not pay taxes, in order for the world not to collapse? Do we not at least owe our children and grandchildren asking that question? So as to at least put some pressure on our governments?

There was a time when indeed a Robin Hood tax was contemplated but that has now only evolved into a questionable Sheriff of Nottingham-Prince John tax. 

My tax paradise (Nothing as powerful against tax havens as tax heavens)

My tax paradise is not, as some could think, a country where there are no taxes paid, but a country with a just, transparent and efficient tax system which, without weakening the citizen, allows for the fiscal revenue necessary for the government to undertake what the citizen considers it should undertake on their behalf… and nothing more. 

Currently such a fiscal paradise does not exist anywhere. In fact what dominates in the world is the existence of real Kafkaesque tax infernos. Countries capable of transforming themselves into tax paradises have all to gain. 

My tax paradise would be governed by the following two principles: 

1. Every person has the inalienable right to contribute to his country by the payment of taxes, no matter how poor he is. It is also unacceptable that citizens can be odiously divided by interested politicians and bureaucrats, in those paying and those not paying taxes.

2. The state must not receive any income other than those taxes paid directly by the citizens in their own name. It should be an inalienable right of citizens to have their governments work exclusively for them, without patrons or other interested parties, introducing confusion into such relation.

In this respect, in my tax paradise, any person who receives a single dollar in income, for any reason or from any source, pays taxes. The tax rate, progressive of course, could for example be between 10 and 49 percent. Never should the government be able to get hold of the largest portion of the income of any citizen, no matter how wealthy that citizen might be.

Companies would not be taxed at all, because their function is to create jobs and increase the taxable income of the citizens, something they can do much better without any distortions. Of course, companies would have to withhold and pay taxes on dividends paid to those who are not fiscally domiciled in the country.

All other revenue that may enter the state, such as the net oil revenues (Venezuela) and net import duties, should be distributed directly to citizens, in the extent that macroeconomic realities so permit, and will become part of their taxable income.

The tax revenues collected by the central state should be automatically distributed on a highly decentralized basis, which in our case (Venezuela) I visualize to be about 10 percent for the governorates and 40 percent to municipalities, 90 percent of these to be distributed based on population and 10 percent based on the territory. Municipalities may also collect their residential property taxes.

In cases of national emergency, and with the favorable vote of 80 percent of the Assembly, the National Assembly may also enact a tax on the value of financial assets up to a maximum of 1 percent per year, up to a maximum period of 3 years.

¿Could public services be privatized? Absolutely, but always allocated on the basis of minimizing user fees and not, as is usual, maximizing state revenues.

¿What about public debt? Not a penny more that 30 percent of GDP, and only long term debt.

I appreciate any suggestions you may have to help make even more paradisaical my tax paradise. 

Translated from Op-ed in El Universal

PS. Phrased in other words: Corporate taxes only dilute citizen's tax representation or... clearer yet... the corporations have hijacked the citizen's tax representation... to the delight of politicians.

PS. In order for the government to timely collect taxes on what derives from corporate profits, these profits, as shown on financial statements, should yearly be passed through to the shareholders, and the corporations, in order to assist the shareholders in the payment of those taxes, decree and pay some dividends.

PS. And of course, VAT and similar, beside being regressive do not give real representation, as there is not an identified citizen behind its payment.

PS. April 2016 "Panama Papers" Don't let redistribution agitation profiteers raise your expectations.

PS. Public borrowing capacity (or money printing seigniorage) is a valuable strategic asset that should not lightly be consumed or squandered.

Flashback: April 3, 1998 The taxes we have to pay! Daily Journal Please read it.

PS. Oh, how I dislike redistribution profiteers... let's diminish their franchise value with a Universal Basic Income