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steven !

Minister Wary Of Obama

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"[Obama] classes them all as tax-havens (and) doesn't seem to be able to differentiate between well run, well regulated cooperative states, and those rogue states he sees are draining tax dollars out of the United States.


"He has called for action and may well, especially if he has a full Democratically controlled Congress, try to drive through legislation against us at an early stage, so we need to be very conscious of that."

Yes it sounds very naiive and too passive given that Obama was one of the main sponsors of the Stop Tax Haven Abuse Act and his co-sponsor Senator Carl Levin used his floor speech to identify the Isle of Man specifically as one of the offenders:

Our Subcommittee’s most recent investigation into offshore abuses highlighted the extent to which offshore secrecy rules make it possible for taxpayers to participate in illicit activity with little fear of getting caught. Through a series of case studies, the Subcommittee showed how U.S. taxpayers, with the help of offshore service providers, financial institutions, and sometimes highly credentialed tax professionals, set up entities in such secrecy jurisdictions as the Isle of Man, the Cayman Islands, and the island of Nevis, claimed these offshore entities were independent but, in fact, controlled them through compliant offshore trustees, officers, directors, and corporate administrators. Because of the offshore secrecy laws and practices, these offshore service providers could and did go to extraordinary lengths to protect their U.S. clients’ identities and financial information from U.S. tax and regulatory authorities

Not a time to behave like a rabbit in a spotlight.

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This article in LegalWeek.com is worth a read (by Stephen Platt, chairman of BakerPlatt Group - quite an interesting law firm in this area).


In light of some of Senator Levin’s findings, few would disagree that the existing laws on tax evasion need to be strengthened. And this Bill, if enacted, may well help to reduce the incidence of what is clearly a problem. Unfortunately, it goes too far. It is anti-competitive and will prevent legitimate individuals from utilising the services of legitimate financial services. It combines the creation of an incredibly draconian regime with the almost arbitrary blacklisting of countries. The automatic listing of 34 jurisdictions, made with no clear justification or reasoning, highlights the whimsical nature of some of the thinking behind the Bill.


There are dangers in this approach. Many reputable centres, including Jersey, Guernsey and the Isle of Man, have made big strides over the past decade to meet international standards and dispel toxic business. They have been praised for doing so by numerous international standard setting bodies. Sadly, there is nothing in the Bill that recognises their efforts. Indeed, it does quite the opposite. A far better approach would be to give well-regulated centres the recognition they deserve, holding them up as role models to inspire others.




Also note that Guernsey sent a delegation to the US about this in July last year (what has IoM done?)


The last paragraph - about Delaware is also worth taking note of:

One thing that particularly stands out is the absence of any mention within the Bill, or in the Senate Subcommittee report that preceded it, of the criminal abuse of the Delaware system of limited liability company incorporation — which is governed by rules on disclosure of beneficial ownership that were outlawed in the Crown Dependencies 10 years ago. This deepens suspicion that the Bill is not in fact motivated by a desire to stamp out the abuse of offshore financial services, but instead by America’s need to exercise more control over large pools of foreign development capital. Is it mere coincidence that the Bill has gathered momentum as the US economy has bombed?

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Interesting that so many of the countries listed are British, or ex-British. Also, the list includes Switzerland, as well as four EU countries.


I can't see that list surviving into legislation without a few changes.



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And now the second front opens: Obama's economic team takes shape


Lawrence Summers


"The US should take the lead in promoting global co-operation in the international tax arena. There has been a race to the bottom in the taxation of corporate income as nations lower their rates to entice business to issue more debt and invest in their jurisdictions. Closely related is the problem of tax havens that seek to lure wealthy citizens with promises that they can avoid paying taxes altogether on large parts of their fortunes. It might be inevitable that globalisation leads to some increases in inequality; it is not necessary that it also compromise the possibility of progressive taxation. Second, an increased focus of international economic diplomacy should be to prevent harmful regulatory competition."


Timothy F. Geithner (Summers was his mentor)


Peter R. Orszag


Christina Romer


Woohoo! Independence here we come!

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