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submitted 9 months ago by return2ozma@lemmy.world to c/news@lemmy.world
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[-] n2burns@lemmy.ca 0 points 9 months ago

Those are two very different things, which I think you're failing to see. At least where I am in Canada, donating to charity doesn't eliminate the tax on that income but only reduces it. Retirement contributions are deducted now but will be taxed when they're withdrawn. This encourages people to support themselves in retirement instead of being seniors on welfare.

The big difference is tax havens are generally encouraging people to move their wealth after earning it elsewhere. The only benefit they gain is increasing their tax base by undercutting other jurisdictions.

Charity & Retirement contributions are assumed to be on income earned in the jurisdiction and encourage good behaviour. Some other tax mechanisms (like preferring dividend income over employment income) are harder to defend but are still trying to an encourage behaviour (like investment of wealth to grow the economy instead of simply hording it/spending it frivolously). While there might be cons to these mechanisms, both the pros and the cons stay within the jurisdiction. Tax havens internalize the benefits while externalizing the harms.

this post was submitted on 12 Feb 2024
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