Avi-Yonah and Avi-Yonah and Guttenberg suggest a carrot and stick approach to tax havens.
They argue that little of the benefit of tax havens flows to their sometimes needy residents, but
rather to the professionals providing banking and legal services, who often live elsewhere. They
suggest transitional aid to move away from these offshore activities. For non-cooperating tax
havens, they suggest the Treasury use its existing authority to deny benefits of the interest exemption. They suggest that tax havens cannot continue to exist unless the wealthy countries
permit it, because funds are not productive in tax havens.