The Cayman Islands is scheduled to host Republican presidential candidate Mike Huckabee next month when he will be the keynote speaker at the Young Caymanian Leadership Awards banquet.
The former Arkansas governor and winner of the recent Iowa caucus has been here before, speaking previously at a Young Caymanian Leadership Award event. This time, however, he is a far more prominent figure and his recent comments about the Cayman Islands and offshore tax havens as a burden on the American economy promise to make his visit very interesting.
During a recent appearance on NBC’s Today Show, Mr. Huckabee made a point to stress that he is ‘not the guy hiding money in the Cayman Islands’.
This was interpreted by media analysts to be a swipe at his Republican rival Mitt Romney. Romney, who has a personal fortune estimated at more than $200 million, reportedly has substantial investments registered in the Cayman Islands.
Of more direct concern to us, however, is Mr. Huckabee’s stated desire to see the literal end of the flow of US money coming to the Cayman Islands and other offshore financial centers. He says he wants to see that money returned to America and invested there.
On CNN he speculated that it would be a significant boost to the American economy, saying ‘that $10 trillion of capital that’s now sitting offshore, American money that has been moved offshore to protect it from our tax system, comes back. What would happen if $10 trillion of capital poured back into the economy?’
Mr. Huckabee may like the Cayman Islands but he clearly doesn’t like us having so much American money here and wants to change the rules to bring it home.
To be clear, this is not about tax evasion or money laundering. The issue Mr. Huckabee is raising is about legal tax avoidance, a phenomenon that has been successfully exploited by wealthy American individuals and corporations. He wants the rules changed because it will help Americans, he says.
The problem for us, however, is that such a change is likely to hurt Caymanians. The offshore business is a vital component of our country’s economy. The overnight disappearance of ‘trillions of dollars’ from offshore accounts during a possible Mr. Huckabee presidency would mean rough seas for the Cayman Islands financial industry.
Let’s hope that Mr. Huckabee offers more details about his views on offshore banking while visiting next month.