Former US Federal Trade Commission Chairman James C. Miller III – who was also the budget director for former US President Ronald Reagan – will be taking a look at Cayman’s financial situation over the next several weeks.
Mr. Miller has been named as chairman of the commission that will be studying Cayman’s various revenue streams and determining whether additional fees and or taxes are needed to support government initiatives. Joining him on the commission will be former UK Member of Parliament David Shaw and Cayman’s Financial Secretary Kenneth Jefferson.
The former federal trade chief was instrumental in the 1980’s in setting up regulatory relief programmes for President Reagan’s administration. Mr. Reagan was a well-known anti-tax advocate who once stated: “government does not tax to get the money it needs, government always finds a need for the money it gets.”
Mr. Miller currently works as a senior advisor to the international commercial law firm Husch Blackwell Sanders. He also is a member of the board of the US Postal Service, where he served as chairman from 2005 to 2008.
Those familiar with US politics might also remember Mr. Miller from his US Senate campaign in 1994. He lost a bid for the Republican Party nomination in Virginia to Col. Oliver North in that race.
According to Premier McKeeva Bush, taxes will be a key focus area of the independent revenue study being done at the request of the UK Foreign and Commonwealth Office.
“The commission should consider the impact of any form of direct taxation on overall economic activity and examine, in particular, the impact on the attractiveness of the Cayman Islands as a financial centre,” Mr. Bush said last week.
Mr. Bush said he hopes the commission’s recommendations will provide government with longer term revenue projections, and compare those to expenses forecast over the next five years.
“(This should) include a discussion of the optimal size of government in relation to its gross domestic product,” Mr. Bush said.
The UK government has expressed repeated concerns about all its remaining overseas territories being able to support themselves during a prolonged global economic downturn. Foreign and Commonwealth Office Minister Chris Bryant has personally urged Caymanian politicians to consider direct taxation, either of property or income.
Premier Bush has previously resisted those overtures, although has admitted to considering a community service charge that is similar to a payroll tax.
The revenue study is to be completed no later than 31 December, Mr. Bush said.
The terms of reference for the study include:
*A comprehensive review of all government’s current revenue generating mechanisms, with an eye toward making those measures more efficient.
*Examining government revenue sources and expenditures in the current budget year, and recommending plans to balance the spending plan.
*Examining government’s current short-term and long-term debt obligations, and possible ways to save money using alternative financing methods.
*Recommending approaches to reduce government spending.
*Recommending new revenue sources, with particular regard to Cayman’s location, size, population base and cultural background.