There seems to be a slowly developing realization on the part of the leaders of the world's offshore financial centers (a.k.a tax havens) that the potential election of Senator Barack Obama (D-ILL) as president of the United States could do serious economic and political harm to their jurisdictions and their peoples.
Example: This week the Prime Minister of Barbados, David Thompson, and other Caribbean Community (CARICOM) leaders plan to use a pending Caribbean summit meeting in New York to send a clear message of protest to Senator Obama.
Barbados, The Bahamas, the Cayman Islands, Antigua, Grenada and others in the region have complained about Obama's radical ideas because they fear he will undermine their offshore financial sectors that annually contributes hundreds of millions of dollars to their treasuries. The offshore sector also provides employment for thousands of professionals – bankers, attorneys, accountants and managers – plus support staff.
In The Bahamas an open anonymous letter is circulating that highlights what the sender describes as Obama legislation that is "...basically designed to kill the offshore financial services business of The Bahamas." The letter charges: "If Senators Levin and Obama get their way with this legislation it will also be an historical day of mourning for the financial services sector and all the professionals working therein."
Education of a Freshman Senator
This tax haven concern is not limited to the Caribbean area.
Across the Atlantic Ocean, Isle of Man Treasury Minister, Allan Bell, this week warned the Manx Chamber of Commerce that offshore financial centers would face renewed pressures if Obama became president.
Referring to anti-tax haven legislation sponsored in the U.S. Senate by Senator Obama, Dr. Denzil Douglas, Prime Minister of St Kitts-Nevis said: "Blanket statements and blanket laws passed in the United States Congress can have serious, very serious effects on the continued growth and development of Caribbean economies." Douglas will be among other heads of government in a session on trade with Susan Schwab, the American Special Trade representative, to be held in New York.
"He needs to be told, he needs to be educated. His advisers need to be engaged in a dialogue so they can appreciate what our interest is and how his policies and programs are going to affect us in the Caribbean," Dr. Douglas added.
What Obama also needs to be told is that in recent years all of these jurisdictions have cleaned up their acts, passed strong anti-money laundering laws, and now have better financial law enforcement than do the world's two leading tax havens/dirty money centers -- the United States and the United Kingdom.
Inane Legislation
At issue is the S.681, the "Stop Tax Haven Abuse Act" introduced by U.S. Senator Carl Levin (D-MI) and co-sponsored by Obama. This inane bill would disrupt U.S. trade and business by blacklisting thirty or so foreign jurisdictions, (including such horribly suspect places as Switzerland), for these supposed sins: 1) of imposing little or no taxes on foreign persons and corporations that freely choose to do business there; 2) guaranteeing by law financial privacy and bank secrecy.
Under the provisions of the Levin-Obama bill a host of Caribbean countries could become virtually off-limits to American corporations because the measure lists these countries by name as "tax havens" and makes them ineligible to serve as centers for American corporations.
Tax Haven Fixation
Not content with his tax proposals that would drastically redistribute wealth in America, it appears that the freshman Senator has fastened on tax havens as a favorite bogeyman used to tar offshore financial activity as somehow wrong.
Yesterday in a Wall Street Journal interview Obama again criticized tax havens, saying: "One of the things I've asked my folks to look at is: Are there ways we can close existing loopholes in tax havens."
Well, Senator, if your bill ever becomes law it will do as lot more than just close loopholes.
The junior Senator from Illinois doesn't seem to realize that neither he nor the United States government has the power to order other nations around, regardless of their diminutive size. Instead, which is the worst part of his scheme, Obama plans to tax and shackle the financial freedoms of Americans and U.S. corporations who, until now, have had the legal right to go offshore.
This anti-tax haven gimmick has been a repeated theme during Obama's short Senate career and his recent presidential primary campaign.
In a Dec. 13th Iowa debate with Senator Hillary Clinton he promised that as president he would crack down on corporate loopholes and tax savings, particularly those involving "offshore transactions." Indeed, his radical legislation wrongfully paints offshore tax havens as little more then sinister places where Americans only go to evade taxes.
There's a delightful lyric from the 1950s Broadway musical, Fiorello, in which a chorus of politicians lament, in a song entitled "The Bum Won," the outcome of the New York City election that sent LaGuardia to Congress: "People can do what they wanna, but I gotta feeling it aint democratic."
If Barack Obama has his way, you may not be able to do what you want to offshore much longer. Better act now.
* If you’re looking for offshore venues (while you still can), click here for some solid ideas.
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