Invade the Caymans!
I have a fundraising suggestion based on David Cay Johnston’s insightful “Lax Little Islands” [June 1]. Johnson’s idea that we should invade the Cayman Islands is a good one, and the timing is right. So I suggest that The Nation, with Johnston, embark on a project to print and sell banners that can be hung on homes throughout America proclaiming Invade the Caymans! This could create viral pressure on Congress to set aside its umbilical connections to Big Finance and Big Corporate and perhaps, for a change, do something for big citizen.
George Town, Grand Cayman, B.W.I.
There is so much misinformation in David Cay Johnston’s “Lax Little Islands,” it’s hard to know where to start. His most egregious claim is that the Caymans are a haven for criminals and others who want to escape taxes and launder money. This is patently false. Unlike Switzerland, Liechtenstein, Andorra and Monaco, the financial sector in the Caymans operates under full transparency to access monies for the benefit of the US economy. For the past twenty years, the Caymans have worked cooperatively on every international initiative from the United States, the IMF, the OECD and the FATF to create a robust, accountable, transparent and fair financial regulatory structure, frequently inspected by the IMF. More specifically to Johnston’s claim, in 1990 Cayman entered into a fully transparent, all-crimes Mutual Legal Assistance Treaty with the United States and, in 2001, a comprehensive US Tax Information Exchange Agreement.
The GAO report corroborates and is highly supportive of the Cayman position. We agree that those who break the law should be punished, so it is irresponsible to suggest that the Caymans are aiding and abetting such activity. The Justice Department will confirm that. Offshore centers enable US companies–which pay tax twice, in the States and where they earn profits–to compete internationally and reinvest their profits, expand their operations and create jobs. Last time I checked, this was a good thing.
Cayman Islands Financial Services Association
There is so much misinformation in Anthony Travers’s letter, it’s hard to know where to start. There is no double taxation, since Congress gives companies a dollar-for-dollar credit for taxes paid in foreign regions. Further, transfer pricing abuses let companies take profits in the Caymans while paying little or no tax to any government. The GAO report, read in context, hardly supports the claims made above; cooperation is conditioned on the US government having first identified a cheat or crook and then asking for assistance, at which point cooperation begins. By the most generous measure, the Caymans government budget devotes less than a penny on the dollar to financial crimes law enforcement, which the GAO report states the Caymans see as mostly a domestic American problem. Cheating the United States tax system is not a crime in the Caymans, which despite their denials profit by fostering evasion.