A global super-rich elite has exploited gaps in cross-border tax rules to hide an extraordinary £13 trillion ($21tn) of wealth offshore – as much as the American and Japanese GDPs put together – according to research commissioned by the campaign group Tax Justice Network.

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He shows that at least £13tn – perhaps up to £20tn – has leaked out of scores of countries into secretive jurisdictions such as Switzerland and the Cayman Islands with the help of private banks, which vie to attract the assets of so-called high net-worth individuals. Their wealth is, as Henry puts it, "protected by a highly paid, industrious bevy of professional enablers in the private banking, legal, accounting and investment industries taking advantage of the increasingly borderless, frictionless global economy". According to Henry's research, the top 10 private banks, which include UBS and Credit Suisse in Switzerland, as well as the US investment bank Goldman Sachs, managed more than £4tn in 2010, a sharp rise from £1.5tn five years earlier.

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http://www.guardian.co.uk/business/2012/jul/21/global-elite-tax-offshore-economy

It seems like, in a highly complex economy, with multinational corporations that can cause nations to bid against one another, it is easy for such corporations to become economies unto themselves, do untold evil, and leave a mess for the governments to clean up after them.  Make them "too big to fail" and have them hold economies at gunpoint.  After all, politician, you don't want large scale unemployment, do you?

And, in this, they will claim, "I just play by the rules", and they also work to lobby to write the rules also.

Mucho Dinero...

It's why taxes and investments should be levied in the countries they do business in. Not the countries they operate from.

Ah, the wonders of global economics and corporations. The way things are going one could argue the sort of future shown on Avatar or Deus Ex where multinationals effectively rule the planet aren't that far-fetched.

We need to get rid of the likes of finance capitalism, speculation, parasitic banking and all that causes economic bubbles and copious amounts of wealth concentration. Somehow.

Please clarify how you differentiate do business in from operate from.  I am not sure which one you are referring to as a legal context, vs where businesses buy and sell or produce.

If property can be moved so frictionlessly, global-reaching taxation should be equally frictionless.

It's because the rules let them. If a government seriously wanted to crack down on this it would be easy, but they fear all of the banks and companies headquartered there leaving.

My idea is taxation independent of where a company is headquartered (because that makes no sense, see also Cayman Islands) but instead on where they trade. If a company wants to operate in a country it has to pay tax there.

It would also force other countries to adopt the rule otherwise companies will HQ in the first adopting country unless they want to pay full tax in their HQ country and partial in the first adopting one.

Interesting to read people's raw opinions. Had I put mine in the OP, I'm sure the thread would have taken a turn of people arguing my view, rather than purely expressing theirs.

What I find interesting is that everybody immediately suggested fixes to this. I propose that it isn't even a problem.

This is just the Romney way of storing money. Perfectly legal.