Income Tax Havens

Are Income Tax Havens a Good Thing
The real negative effects of tax havens are not that paying taxes in the US are avoided. The real issue is that US policy is driving US $$$ away from the US. When money is put in a tax haven to avoid taxes, that money stays offshore. It no longer creates jobs or industry in the US. Instead it creates jobs in other parts of the world.

After a tax haven receives the money, it then searches the world for a place to invest, except that place  will not be the USA.

The question is, should the US radically change the way it taxes its citizens to avoid so many high income earners taking their money away from the US?

There is a potential of an even worse effect. Since no one knows where this money goes, and no one knows what it is used for, it could be used for any purpose, including affecting US policy, or activities that would be frowned upon, or arrangements with legal or illegal activities, or given to charity in a most generous manner. No one knows.

How Much Wealth is the Right Amount of Wealth
Now I know that in the American belief system, a measurement of wealth is inappropriate. I agree. Yet I also know that a person can only buy so many cars; a person can only buy so many houses; a person can only buy so much food – no matter how fancy or expensive; and a person, no matter how hard he tries, can only spend so much.

So why use a tax haven? Why deprive the greatest country in the world of a bit of what it has given you? If a person has enough, is it his duty to not deprive others to make a bit more by not paying income tax, and by reducing money that would otherwise be available in the USA.

What Happens to the Money When a Tax Haven is Used
People think that the user is avoiding income tax. That is true, but the far larger harm, is that US dollars are permanently taken out of America.  These dollars are now being invested around the world, everywhere except in America.

A Belief System

I believe in democracy.
I believe in restricted government interaction. Although government is necessary, it is also wasteful and destructive to the economy in many instances.
I believe in letting every individual strive to accomplish his/her goal and accomplishments.
I believe that social assistance is absolutely necessary and that government should protect the poor and disadvantage. I also believe that this assistance should be in total for any person, far less than that person could earn as an employed worker.
I believe in every freedom of the individual, save when that freedom hurts another citizen.
I believe that health care is a basic human right and is not a political football and is not a way to make money. Making money off of the suffering of others is immoral.
I believe that wealth has responsibilities to the place that gave the opportunity to gain that wealth.

An Alternative Tax System Perhaps
If the American tax system encourages American citizens to avoid keeping their money in America, maybe that is a wake up call to change the income tax system in a radical enough way to stop giving incentives to the rich to take their money out of America.

The views expressed in this blog are opinions only and are not investment advice. Persons investing should seek the advice of a licensed professional to guide them and should not rely on the opinions expressed herein. This blog is not a solicitation for investment and we do not accept unsolicited investment funds.

By Larry Cyna

Mr. Cyna is an accomplished investor in the Canadian public markets for over 20 years, and has managed significant portfolios. He is a financing specialist for private and public companies, and has expertise in real estate and debt obligations. He has assisted private companies accessing the public markets, has been a founding director of public companies and continues as a strategic consultant to selected clientele. He is and has been a director, a senior officer and on the Advisory Board of a number of TSX and TSXV public companies in the mining, resource, technology and telecommunications sectors, and the Founding Director of two CPC’s with qualifying transactions in mining and minerals. He was an honorary director of the Rotman School of Management MBA IMC program, has completed the Canadian Securities Institute Canadian Securities Course & Institute Conduct and Practices Handbook Course, was a former Manager under contract to an Investment Manager at BMO Nesbitt Burns, a roster mediator under the Ontario Mandatory Mediation Program, Toronto, a member of the Institute of Corporate Directors of Ontario, a member of the Upper Canada Dispute Resolution Group, and the Ontario Bar Association, Alternate Dispute Resolution section. He obtained his designation as a Chartered Accountant in Ontario in 1971 and was the recipient of the Founder’s Prize for academic achievement together with a cash reward. He became a CPA in the State of Illinois, USA in 1999 under IQEX with a grade of 92%. He is a Member of the Institute of Chartered Accountants of Ontario and the Canadian Institute of Chartered Accountants. He holds certificates in Advanced ADR & in Civil Justice in Ontario, Faculty of Law, University of Windsor, certificate in Dispute Resolution from the Ontario Institute of Chartered Accountants. Previous accomplishments are Manager of Cymor Risk Consultants LP specializing in Risk Management Assessment; CEO of Cyna & Associates specializing in mediation and ADR; Founder & Senior Partner of Cyna & Co, Chartered Accountants, a fully licensed and accredited public accountancy firm with international affiliations; and was a partner in a large public accountancy firm. Mr. Cyna is well known in the Canadian Investing community. He is invited to, and attends presentations given by public companies usually 3 or 4 times each week. These presentations are intended by the various hosting companies to present their inside story to sophisticated parties and Investment Managers for the purpose of attracting funding, or of making parties more interested in acquiring shares of those companies. Being a part of this keeps Mr. Cyna deeply involved in the current market and leads to numerous investment opportunities.

Leave a comment

Your email address will not be published. Required fields are marked *