The Tax Haven
Until there is a legal framework for an international corporation, the best alternative would be for Consensus to set up its corporate status in one of the many “tax havens” around the world. Tax havens are countries that allow wealthy people and big businesses from outside the country to set up a legal company within that country. In exchange for giving that country's lawyers, accountants, bankers, and bureaucrats some employment, the corporation in the tax haven pays very little corporate taxes. Thus wealthy people and big business can shuffle their assets around the world, pay very little taxes, and avoid their responsibility to help finance a strong civil society.
Associating with the negative reputation of tax havens is indeed a controversial move for Consensus to make. However there are several good reasons for CC to incorporate itself in this way:
- A tax haven incorporation would best showcase that Consensus is indeed an international business, not an American, or Turkish, or Spanish business.
- CC is also an out-of-the-box alternative in corporative and cooperative governance that has not yet been tried. While this governance is a worthy social experiment, corporate and non-profit law in western countries may not allow such governance. But a tax haven should give a lot more flexibility for CC to design its own system of governance.
- In most western nations, there are regulations and restrictions about capital financing with preferred shares. There are good reasons for such restrictions. But because Consensus is on a different path than maximizing profit for common shareholders, these reasons will not apply. If CC wants to proceed with capital financing mostly by preferred shares, it needs to go where the laws allow such financing.
Using a tax haven does not mean CC should be free from paying taxes. Rather the corporate articles of CC should stipulate that if CC comes into a profitable situation, it should pay a fair share of tax as its responsibility for being able to conduct business in a civil society. I recommend this voluntary tax be set at about 20% of stated profits, payable to the United Nations.
