Jared, a Tax Novice, Has Recently Learned of Several Foreign

question 10

Essay

Jared, a tax novice, has recently learned of several foreign tax havens (i.e., countries with low tax rates). He is considering locating his manufacturing operations in one of these countries solely based on their low tax rates. What types of taxes is Jared ignoring? Explain how these other taxes may affect the viability of Jared's choice to locate in a foreign tax haven.

---

Definitions:

Exposure and Response Prevention

A treatment for obsessive-compulsive disorder that exposes a client to anxiety-arousing thoughts or situations and then prevents the client from performing his or her compulsive acts. Also called exposure and ritual prevention.

Obsessive-compulsive

Pertaining to a disorder characterized by intrusive thoughts that produce uneasiness (obsessions) and behaviors (compulsions) aimed at reducing anxiety.

Vacuum

A space entirely devoid of matter, or a situation characterized by the absence of something that would normally be present.

Compulsive Behaviors

Actions performed repeatedly and excessively as a result of an irresistible urge, often related to obsessive-compulsive disorder.