Title

Moving Money: International Financial Flows, Taxes, & Money Laundering

Abstract

Allegations by political leaders and others that offshore financial centers enable multinational enterprise to avoid paying a “fair” amount of tax — and that they enable wealthy individuals to evade paying any tax, much of it on ill gotten gains — are once again garnering headlines and inspiring government action. One of the most prominent commentators on these topics, The Tax Justice Network, has recently claimed that thanks to the services of tax havens $21-$32 trillion of wealth of questionable origin remains hidden and untaxed, and that such abuse must be stopped through greater regulation. In this paper we argue that such claims rest on poor data and analysis, and on mistakes about how financial transactions, international taxation, and anti-money laundering rules actually work. We further argue that demands for more regulation without considering cost and effectiveness rely on a belief that international financial transactions are assumed illegitimate unless tightly controlled, rather than primarily reflecting the normal, legitimate workings of an efficient market.

Keywords

tax justice, money laundering, anti-money laundering, capital flows, tax evasion, offshore financial centers

Publication Date

2014

Document Type

Article

Place of Original Publication

Hastings International and Comparative Law Review

Publication Information

37 Hastings International and Comparative Law Review 1 (2014)

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COinS Richard K. Gordon Faculty Bio