Tax Havens prevent cartel between higher-tax states

The Institute of Directors' (IOD) paper examining the use of low-tax jurisdictions says many obvious responses to curbing the use of tax havens could have a negative effect on the economy. Global leaders spearheaded by Obama, Brown, Sarkozy and Merkel have attacked ‘tax havens' in a bid to claw back tax and have introduced a raft of new measures to clamp down on tax evasion. The IOD says national sovereignty must be accepted and therefore a state is entitled to set very low tax rates if it wants. However, it points out other states are permitted to respond with legislation which wo...