Friday, August 23, 2013

Feldkirch, Austria to Walenstadt, Switzerland: Canadian foreign aid



 

60 km
Gordon
We tripled our country count today, starting in Austria, passing through most of the length of Liechtenstein, and finishing at the end of a lake, Walensee, in Switzerland.
By virtue of its novelty and a whiff of the exotic, Liechtenstein was the highlight of the day.  It has only 36,000 citizens, but according to Wikipedia they enjoy the highest per capita purchasing power in the world.  It shows, in the numerous luxury autos, the meticulously maintained landscape, and general sense of material well-being.  Some of this affluence no doubt flows from the production of false teeth and sausage casings (Liechtenstein leads the world in the manufacturing of both of these) but the real money spinner is financial services.
While it tries to pass itself off as providing legitimate financial services, Liechtenstein's selling feature is its low personal and corporate tax rates (only Andorra has a lower corporate rate in Europe) and its banking secrecy, and the result has been pure gold.  For example, the Prince of Liechtenstein, the head of state, has an estimated net worth of $5B.  This is like the mayor of Esquimalt being richer than Jim Pattison.  Of course, the downtown of Vaduz, the capital, bears little resemblance to Esquimalt, as there are a shocking number of banks, investment firms and accountants.  More than 70,000 corporations, or about 2 for every citizen, are registered in Liechtenstein.
I like to think that Canada's wealthy have done their bit to ensure that the residents of Liechtenstein are not subject to the vagaries of the false teeth market.  While it is of course impossible to get solid figures regarding the lost tax revenue, I would be willing to bet a Swiss franc, the currency in Liechtenstein, that Canada spends less on foreign aid than it loses through foregone tax revenue in the various foreign tax shelters.  Canada's rich: helping to ensure there is a Lexus in every driveway in Liechtenstein.





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