Markets rally after news of crackdown on tax havens ?

If low taxes are supposed to be the market's best friend, what about NO TAXES?

According to supply-side economics and Andrew Laffer, the market is OK with low taxes.

But judging by the market's positive reaction to the G20 summit,
they are NOT OK with no taxes.

After the conclusion of yesterday's G20 Summit, it will be much harder to horde your money away from Uncle Sam, Onkel Hanz, Oncle Pierre, or even 华伯父 .

One of the conclusions from the G20 summit yesterday was that the member countries agreed to enforce sanctions on "tax haven" countries noncompliant with Article 26 of the Organization for Economic Cooperation and Development's (OECD) model tax convention for income and capital, which deals with tax information sharing agreements between countries. Also from the summit, they asked the OECD to publish a list of tax havens and their compliance with the information sharing regulations.

In anticipation to the recent G20 decision, Switzerland and Lichtenstein have agreed to comply with Article 26,

Which looks like the famous tradition of confidentiality between banks and customers in Switzerland going back to the 1934 Swiss Banking Act has now come to an end.

EU Members and the US have long been critical of these "tax havens" for robbing them of taxes they otherwise feel were rightly theirs to collect. Their cries of "theft" have largely fallen on deaf ears, until September 11, when they used the argument that the same information protection that guards tax evaders from governing authorities, may also shelter funds used for money laundering and terrorism activities. This anti-terrorism twist, along with a renewed thirst for tax funds to finance economic stimulus programs appeared to have finally won over some of the more conservative G20 members, such as China, on the matter.

There is still some hope for those who love offshore bank accounts. As of now, the information sharing is limited, and has little jurisdiction over civil disputes. So those funds in the Cayman Islands may still be safe from pesky child support settlements .

G20 declares door shut on tax havens
http://www.guardian.co.uk/world/2009/apr/02/g20-summit-tax-havens

OECD Article 26
http://www.oecd.org/document/53/0,3343,en_2649_33767_33614197_1_1_1_1,00.html

OECD "harmful tax practices"
http://www.oecd.org/document/53/0,3343,en_2649_33767_33614197_1_1_1_1,00.html

Example of Germany's battle with Lichtenstein for account information
http://news.bbc.co.uk/2/hi/business/7253191.stm

Switzerland agrees to comply with G20 on "case-by-case" basis
- G20 wants full compliance "or else"
http://uk.reuters.com/article/bankingfinancial-SP/idUKL296678920090402

Swiss Banking Act of 1934
http://en.wikipedia.org/wiki/Swiss_bank