New Left Project sits down with author Nicholas Shaxson to talk tax havens — a mammoth system of quasi-legal money-laundering which has a far wider impact than we realize, with a large role in the global drug trade and financial crisis. As it turns out, the biggest “treasure islands” are not the Caymans or Monaco, but places such as the City of London and the U.S. state of Delaware:
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There is no common definition of what a tax haven is. Everybody has a slightly different definition. Ultimately what a tax haven provides is escape from the rules and the laws of jurisdictions. Tax havens are also about ‘elsewhere’ – the laws of the Cayman Islands are not designed for the benefit of the 50,000-odd population of the Cayman Islands.
The traditional view is…palm-fringed tropical islands in the Caribbean, Monaco, Switzerland, Liechtenstein. Small states. But if you do the analysis of what a tax haven is and what they are selling, you will find that these small islands are generally sideshows to the big event.