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Tax Havens Boost World Economy - Report

Stephen Harris

14 June 2006

Tax competition between nations benefits the global economy and leads to better economic performance, according to new research from The Centre for Freedom and Prosperity Foundation. Tax havens provide a tax-efficient platform for cross-border investment, help boost capital formation, and also encourage pro-growth tax policies in non-tax haven countries, the research says. The research paper "Tax Havens, Tax Competition and Economic Performance," also points out that the US is the world's largest beneficiary of tax havens and tax competition, both because it is itself a tax haven for foreigners and because tax havens allow capital to flow into the American economy. Foreigners invest more than $11 trillion US economy, and almost $1.3 trillion of this is placed in the US financial system by Caribbean institutions.