If an investor from country A buys stock from country B, accounts of country B would record the sale as a liability. If the investor from A record this as an asset in country A, he would be taxed on income of this stock. If the investor in country A were to park it in a Swiss account, he wouldn't be taxed.
Since the financial crisis began in 2008, economic growth has dwindled dramatically, leading to increasing debt. In 2014 alone, income hidden away in tax havens removed $78 billion in tax revenue for European countries.
As we speak, the rich get richer by escaping tax. We need forceful solutions. Tax havens should face economic sanctions and trade levies.We need international compliance.
We can create an international wealth database to help tax authorities to verify when banks are withholding client information.
Multinational corporations also avoid paying taxes. They earn profits from around the world and apply transfer prices to minimize tax. These practices harm society and add to increasing economic inequality. We need to shut down tax havens.