Yesterday's editorial in the FT was a major statement of principle. It starts:

The German public's outrage that hundreds of their fellow citizens are suspected of tax evasion via Liechtenstein trusts is making life uncomfortable for the principality and for other havens that refuse to co-operate with foreign authorities. Action should be measured and proportionate, but the European Union and other large jurisdictions should act together to put pressure on havens.

I am absolutely sure this is right. But, that's the opener. I seriously hope that there is no one who could dissent from what follows:

Tax evasion is a crime, it is serious, and it has to be countered. It is theft from the evader's fellow citizens, who have to pay more to provide public services. Tax havens that help evaders, and enjoy high levels of per capita income for their own small populations as a result, are parasitic.

Funnily enough, parasitic is a word I have used for some time with regard to these places. If you want to name the places of concern, those with very high GDP per head include Jersey, Guernsey, the Isle of Man, Liechtenstein, Luxembourg, Switzerland, Cayman and their ilk. The usual tax haven culprits are the target of the FT's comments. As the FT then says:

Helping evasion is distinct from legitimate tax competition. Monaco or Bermuda or Switzerland are fully entitled to set low rates of personal and business tax to attract wealthy individuals and companies to their jurisdiction. What is not acceptable is helping those who live elsewhere to evade the taxes that they owe.

Quite right. As I have said in a number of interviews recently, any country that wants to offer a 'zero tax' option to its residents and those who invest there is welcome to do so, and no one should stop it, or has the right to stop it doing so if it has a democratic mandate for that action. In addition, if companies and individuals really want to relocate to these places so that their economic activity is actually located there then they can and should benefit from the taxed rates those places offer. That is tax compliant. There seems no doubt that in writing as they do the FT are accepting this argument of tax compliance.

What neither the FT or I accept is the argument that the creation of tax non-compliant entities is acceptable tax competition. Tax non-compliance occurs when something is claimed to take place in a location when that is not the case. So, for example, offering zero tax options behind a wall of banking secrecy and to ring fence that option from its local population (as for example the Isle of Man is doing, illegally) is tax non-compliant. The only way in which the zero tax option is available in this case is by registering an activity in a place and then stating it does not actually take place there. Of course, the haven (and those professionals who service them) do not then ask where the activity really takes place. It's simply 'somewhere else' as far as they are concerned.

Put simply, this crime of omission is their crime, and it is a crime. It is an economic crime of deception. That is fraud. It is money laundering because it involves the theft of taxation revenues. Those who facilitate this are effectively handling stolen goods: that is what many tax havens deliberately set out to do. Those professional people who work in these places know that as well. The structures that they create have no relevance at all within the jurisdictions in which they are supposedly created. The Liechtenstein foundation is an example of this. All those, governments, lawyers, accountants and bakers who participate in the supply of such arrangements are putting themselves at risk of participating in a crime against the tax laws of other countries, and against humanity at large.

The FT was clear about how this should be tackled:

Laws on banking secrecy that thwart this limited goal are not right. Nor are laws that achieve the same result through anonymous companies and foundations.

And it was right to point out that many countries, such as the UK and USA need to change in this area as well. That said though, it continued:

havens should provide information to foreign tax authorities that have reason to suspect evasion. Most countries already do this for money laundering and terrorist finance: the crime of tax evasion should be treated no differently.

Too true, and as it concluded:

if tax havens refuse to help, it would be reasonable to apply extra scrutiny or rules to bank transfers going across their borders, and to keep searching for the whistle blowers who make bank secrecy less safe for evaders.

It is hard for me to argue with anything quoted here. The times they are a-changing.