How do countries such as Monaco where there are no taxes work? And why do wealthy people generally live there? Is it expensive to live in a no-tax country or something?
Other - Taxes - 4 Answers
Random Answers, Critics, Comments, Opinions :
1 :
It's not that they have no tax..it's that they have no INCOME tax. This requires places like Monaco to get their income elsewhere. In Monaco's case, they have established themselves as a gambling mecca and so they tax gambling for their income. Obviously wealthy people live there to avoid income taxes. All else being equal, it should be no more expensive living in a no-income tax country - they just find other sources of revenue which should not affect the cost of living.
2 :
I can't imagine that there is absolutely no tax. Is there a sales tax of some sort? Or a property tax? Road tolls? Very high fees for government services (driver's licenses, etc.)?
3 :
Steve D is mostly correct. In many places, there may be no personal income tax, but other taxes are levied. These can be corporate taxes, property taxes, etc. There do indeed exist a few places that are "tax free" for citizens. These governments (kingdoms/monarchies, more typically) raise money for government though the sale and export of national asset (read: OIL). In the case of places like Monaco, they're also bolstered by huge foreign travel dollars. Wealthy individuals are attacted to these places as "Tax Havens" for the simple reason that they save huge amounts of money by avoing the payment of personal income tax.
4 :
Every country has some kind of tax.
