"This would never work in a country "

Why?

The basic notion of a (usual, industrial) country is that it is self-sufficient and provides mostly for its own. The Caymans is the antithesis of this. Wealth is imported, and the richness of the country is therefore artificial - i.e. not the result of any distinct value that it has produced through goods and services.

Of course you can create a near utopia without taxation for your own people if you are able to import fabulously rich residents by the boatload and taxing them instead. This is obviously not an option that is sustainable on a large scale , nor do most countries have the exotic climate to support it.

In short, you need to tax somebody. In the Caymans these happen to be rich foreigners on holiday (or in some sort of semi-permanent residence)... in other countries clearly the taxes have to come from somebody else.

I guess focusing on the comment above, “and has no direct tax”. I have been told there was no direct tax in US till 1913, so how did it work then? we seem to get along just fine to that point? Assuming what you say is true, that it will never work….

“This would never work in a country that isn't a tax shelter from other nations,” but isn’t Manhattan N.Y. U.S. also a tax haven to foreigners, other then U.S. citizens? And doesn’t the Cayman Islands support competition among, within and between taxing districts of the world, for which they attract wealth? Maybe it’s the competition among governments that makes it work in Cayman, giving money owners a better deal then they get else where.

“Somebody”, yes… if direct then apportioned. Tax somebody with competition, perhaps maybe best.

"I have been told there was no direct tax in US till 1913, so how did it work then? "

This is not entirely true. There was an income tax that was put into place for a number of years around the civil war, but was later abolished. Im not certain on the exact years, though.

Either way, taxes still abounded back then, they just werent compulsory. But they were if you were alive, eating, and tried to move around society. In other words, if you lived in BFE and had a farm, you probably didnt pay anything -- but if you lived in the city, you almost had to when buying tea, other food items, paying for stamps, other imported items.

The debate about whether we should have income tax or not is somewhat moot outside of armed rebellion. Its here to stay. The point that is more important is that it should be uniform, easy to follow, and LOW. I should not pay 50% of my efforts to the government. 5%, ok, 10% maybe, but 50%? no. The amount is what makes the income tax so unbearable, not that it exists at all.

Brian

“The debate about whether we should have income tax or not is somewhat moot outside of armed rebellion” I hope this is not true, I’d prefer a peaceful solution. I believe all things are possible, perhaps it is not possible because people think it is not. Even if you want it low, the best strategy may be to urge for abolishment, and the chances of getting low taxes go up. I was for low taxes, now I’m for abolishment. The more I learn about the system being rigged, the more I want it absolutely.

Manhattan is a tax shelter? You certainly don't know much about Manhattan.

There were taxes prior to the income tax, they were just different taxes. A flat rate sales tax and no income tax would still be tax - it would just be easier to avoid.

"It does not surprise anyone when I tell them that the most important tax haven in the world is an island," international tax expert Marshall Langer pointed out in a speech last November. "They are surprised, however, when I tell them that the name of the island is Manhattan."

By OECD standards, we are the largest tax haven in the world. The United States, for example, source: https://www.reason.com/news/show/34248.html

the power to avoid, adds to freedom, not suggest with 19,000 pages of tax code though....

Ah I wasn't thinking of non-citizens, for me it is hard to think of it as a shelter when I pay significantly more tax now that I work in Manhattan than when I worked in New Jersey.