Sentiment in this week’s poll runs high and wild against Washington’s efforts to collect taxes from anyone in Cayman affiliated with the U.S., describing the move as that of a “bully.”
The poll question asked if local government should accede to Internal Revenue Service efforts to identify everyone in Cayman – and the rest of the world – with any financial attachment to the U.S., assess their tax burden and bill them for the sum.
The Foreign Account Tax Compliance Act is a Treasury Department initiative to compel overseas governments to force their indigenous banks, investment and brokerage houses, fund managers, insurance companies pension providers and other foreign financial institutions to turn over lists of account holders with U.S. ties.
The Cayman government will provide those lists to Washington, which will initiate collection efforts, imposing fines on anyone failing to cooperate – including the banks and other foreign financial institutions.
The majority of voters, 194 and 57.9 percent of the 335-ballot total, adamantly opposed any cooperation with FATCA. Of 53 comments left by voters overall, 42 said “no.”
The obvious objections occurred frequently: “The USA has no claim on Cayman business. They are just being the usual bully they are,” was one remark, echoed by others: “Why should Cayman have to be tax collectors for the U.S. or any other country for that matter?” “I think that Cayman is constantly being bullied by the United States and it is time for it to stop.”
One voter said FATCA was a “violation of financial privacy,” underlining others’ fears that the intrusion into the local financial-services industry, the costs of compliance and the violation of confidentiality “will be the final nail in the coffin of the local finance industry. Who pays for compliance? We all do!”
The remark found resonance elsewhere: “If Cayman is going to allow this, then there would be no trust in banking services in Cayman and no reason for them to have accounts there.”
FATCA will jeopardize the privacy laws that make Cayman attractive to money managers – and the questions generated by the unilateral U.S. move start to mount: “What about our confidentiality laws? Will they no longer mean anything?” one voter asked.
Another comment read: “This law makes no provision for those who inherited citizenship via a decision made for them by their parents (born with it). If dual nationals have since done well for themselves, but not filed taxes (being unfamiliar with U.S. tax obligations), they are not only subjected to fines, but possibly jail time.”
In second position in the poll, drawing 55 votes and 16.42 percent of the total, was the sense that even if the complexities of FATCA remained murky, “if you have nothing to hide, you have nothing to fear.”
While a naïve sentiment, sadly, no one remarked on the proposition, defeating any hope of greater understanding.
In third place, with 50 votes, 14.93 percent of the total, was “yes,” the Cayman government should cooperate with FATCA, for reasons largely based on a grudging acceptance of reality – “Cayman has no choice but to comply or essentially quit doing business and turn away all U.S. funds. Good luck with that.”
In fourth place were the 28 votes, 8.36 percent of the total, who weren’t sure if Cayman should accede to FATCA, but observing the costs will be paid by customers as banks and other foreign financial institutions spend millions to create internal compliance systems.
The “other” category attracted only eight votes, 2.38 percent of the total.
Next week’s poll question:
- The National Conservation Bill:
- It’s good for business (explain)
- It’s bad for business (explain)
- If we don’t pass it, the local environment will slowly be destroyed
- We do not need it (explain)
- Other (explain)