There they go again. Another group (this time Oxfam) produces another list of “world’s worst tax havens,” and they slap the Cayman Islands near the top — not because our jurisdiction lacks transparency, or offers anything less than full cooperation with enforcement agencies all over the world, but simply because Cayman itself has no direct taxation.
Never mind that it would be devastating to Cayman’s population and economy to attempt to introduce local income taxes at this stage, or that it would be highly inefficient, extremely expensive and practically impossible to enforce such coercive collection mechanisms in our diminutive islands.
None of that matters to the certain faction of like-minded individuals and organizations (including the Organisation for Economic Co-operation and Development, Financial Action Task Force, Oxfam, the Tax Justice Network, etc. ad nauseam) who continue to use little lists to threaten jurisdictions that have low taxes, or no taxes. What this faction wants is high taxes and, more importantly, tax harmonization (i.e. for the planet’s governments to come together and set similar tax rates across the board, across the globe).
What they are against is tax competition, where small territories and large nations are free to chooses their own methods (and magnitudes) of government revenue collection, and adjust rates to suit their individual needs and political desires.
While Oxfam and their cohorts continue to crank out cranky blacklists, graylists and whitelists in the name of globalism, countries are breaking out of this mindset and pursuing their own strategies to fund their governmental operations and energize their economies.
For example, U.S. President-elect Donald Trump is currently proposing to decrease the confiscatory U.S. corporate tax rate from 35 percent to 15 percent.
That’s antithetical to the “Big Brussels” attitude prevailing in Europe and among the “usual suspects” such as Oxfam and the Tax Justice Network, despite all the evidence pointing toward the success and resilience of efficient, low-tax and limited-government jurisdictions.
Taking a quick look at the others identified as the “world’s worst tax havens,” we recognize some of the “world’s best places to live and do business,” including Bermuda, the Netherlands, Switzerland, Ireland, Luxembourg, Curacao and Hong Kong. We couldn’t think of better company to keep.
In fact, Cayman has plenty to tell — and teach — the rest of the world about rational tax policy. Perhaps it’s time for Cayman to put together its own “blacklist” of the “world’s worst,” based on oppressive taxation and poor returns on massive investment in the public sector.
If that’s too “undiplomatic” or “politically incorrect” for government to pursue, well, the Compass has no such qualms.
We applaud Cayman’s Financial Services Minister Wayne Panton for speaking up and condemning the latest Oxfam hit list, and his observations were precisely on point.
“Once you’ve read the report, and particularly the methodology, government believes that the public will understand that certain organizations’ continued efforts to exploit misinformed public opinion, as part of an agenda to influence the public policy of G-20 countries, is unhelpful at best,” Mr. Panton said. “Indeed, it may be detrimental to the overall shared goal of combating criminal behavior and addressing income inequality.”
The only thing Mr. Panton needs added to his statement is more voices in his choir. We’ll contribute ours: Hear, hear!