Since the Great Recession of 2008 (To Present) is still afoot, many national governments have tried to plug perceived loopholes in tax policy at the level where trans-national corporations and super-earners can re-domicile (think Bahamas, Isle of Man, etc.) and avoid tax, while other revenues have faded.
So far, bills introduced to stop the practice of using tax havens have been rolled out in the US, with little progress. The recent sale of troubled bank Northern Rock in the U.K. to entrepreneur Richard Branson has raised similar questions of where the revenues will end up when the tax bill comes.
The Guardian, a left-leaning UK newspaper has suggested - as many classical economists would - that instead of trying to hunt down the virtual pounds and pence, government try to raise needed revenue from immobile sources. The Guardian suggests Value Added Tax and Land Value Tax as the alternative, more reliable sources. The stated rationale is these are true "wealth taxes."
Well, to a degree, but since VAT is a consumption tax in the end, it ends up as a regressive tax on those struggling in this continuing global slowdown. We'd recommend a sensible program of land value tax that would reduce demonstrably harmful taxes both in Britain, the US and elsewhere.