High Tax Countries want more Tax Revenues Offshore.

High tax countries want more tax revenues and they won't get it from low tax nations offshore.
December 3, 2012.

To be more specific, they won't get it from their citizens that are currently using offshore services to minimize their tax liability. The high tax countries seem to think that the playing field offshore is static and if they just make a change here or there that will solve their tax revenue shortage.

Close this "loophole" and the problem is solved. You see this kind of thinking from various government officers all the time. Governments have been saying and doing precisely this for years and years and somehow the money seems to find a way to avoid the new taxation laws after a while.

They see the un-captured tax revenue offshore and assume they can capture it. And that is the root of the misunderstanding. They believe that people will continue to do business in the same way under different tax rules and pay their taxes. Most governments cannot control what their citizens do and they are not going to act the same way if there are different tax rules.

In the long run people adjust and the tax revenue the government thought they were going to get never fully materialize. So the revenue dries up after a while and they go looking for the next tax loophole to close.