Tax Havens – Turning Tasmania into Another Zug
Tasmania today is a really awesome place to holiday, but an economic wasteland. Tasmania has the distinction of ranking the lowest of all Australian states in almost every economic, social and cultural measure. Its citizens have the lowest employment rates, lowest incomes, lowest literacy, lowest house prices, lowest education standards, and lowest health levels.
In contrast, Zug in Switzerland has one of the highest standards of living in the world. It has employment rates of 99%, high incomes, high literacy, high house prices, high education standards, and high health levels.
Seventy years ago Zug was a poor farming community, a little like Tasmania now, really. So what changed? In 1946 the Government of Zug made the courageous decision to reduce its tax rates to attract investment and employment. The free market forces delivered and today Zug boasts over 30,000 companies who have been attracted by company tax rates as low as 8.5%. Zug is home to many billion dollar companies such as Xstrata and BP Suisse who generate large taxes, employment and investment for the Zug community.
Tasmania could reinvent itself into Zug by introducing a flat company tax rate of 10%. The free market forces would see companies located in Singapore, Hong Kong, and other low taxing countries, relocating to Tasmania. The total company taxes raised at the 10% company tax rate would be many times the company taxes paid in Tasmania at the current 30% rate. In addition, Tasmania benefits from all the extra investment and employment opportunities the new foreign companies would bring.