Calif. lawmaker takes aim at Cayman

A California state assemblyman has drafted legislation
aimed at closing corporate tax loopholes he claims are operated out of offshore
financial jurisdictions like the Cayman Islands.

“With a grim
economy and no-win budget choices, it’s clear that making big business pay
their fair share of state tax is more important than ever,” said California
Assembly Member Marty Block (D-San Diego) on the California Progress report
website.  

Mr. Block
has dubbed his legislation the ‘Cayman Islands Tax Loophole Bill’.

“You
might have heard about a single building in the Cayman
Islands that houses almost 19,000 shell corporations,” he said.  “Corporations transfer their profits to these
fake companies so they don’t have to pay taxes.”

The bill,
which would have effect only in the US
state of California,
would take money from multinational corporations who Mr. Block said are taking
advantage of the state’s corporate tax loopholes, and use that money to pay for
a tax cut on college textbooks and supplies.

The
proposal would only tax those corporations if the money subject to the
corporate tax was made in California.
 

The bill
has been approved by the California
assembly by the bare minimum of votes required. It would also have to be passed
by the state senate before going to Governor Arnold Schwarzenegger for
approval.

Economic
analysts have stated the bill is part of California’s
attempt to balance its budget deficit without actually raising taxes on state
residents.

State
Republican Party leaders in California have
said Mr. Block’s proposal would discourage businesses from operating and
investing in California.

1 COMMENT

  1. This is all Kabuki Theater. The law has no teeth and is meant to defer attention to the bigger problem of progressive state reps spending like sailors on leave.

    Besides, it is nearly impossible, and a federal crime, to take money made IN THE UNITED STATES and move it to Cayman without declaring it. US banks legally report these transfers to the IRS. What most companies do, rightfully, is make money overseas and send it back to the US if needed. Otherwise it is used to sustain and grow overseas operations. Once it is consumed by the US owner it is taxed. This is fair and correct. Everything else is pure Thespian folly.

    Ignore California!

  2. Just came on here to say that I had to sign up with Cay-Compass because “Cayman News Service’ was getting a little too ghetto for me lol. Anyway USA need to mind their own business and stop acting like little kids on Capital House.

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