In case you’ve missed it, the Cayman Islands have been in the news lately, and not just because it’s swimsuit season. Much of it has to do with a certain presidential candidate’s personal finances, and this, in turn, has provoked some journalistic spade work into the schematics of the “offshore economy.” In fact, just as American factories and jobs have increasingly emigrated to other countries, so have the piggy banks where some of our super-rich and/or presidential candidates place their money. Adam Davidson, of NPR’s Planet Money fame, ran a suitably scary piece in last Sunday’s New York Times Magazine in which he sketched how easy it is for just about anyone with a telephone and photo ID to set up an offshore account.
It’s a great read that begins with Davidson Googling the names of a few firms that are well versed in parking your earnings in tax-free, impossible-to-track bank accounts somewhere beyond America’s 12-mile territorial limit. After some parsing, he settles on A&P Intertrust because, he says, “I liked its Web site the best. (The other two companies’ sites appeared stuck in a late-’90s style with lots of flashing boxes.)”
Davidson reveals the enormity of those fugitive piggy banks: between $21 and $31 trillion, by one guess – out of a world economy estimated to be $200 trillion. Perhaps worse, if that’s possible, this adds up to about $200 billion in revenue if it were ever taxed. Davidson doesn’t call for any form of swift justice to remedy what is, after all, perfectly legal activity. Instead, he argues for simplifying the country’s financial regulations to the point where the rich cannot find any loopholes.
Perhaps Davidson is going easy on the offshore set. It would seem that in the current economic downturn, anyone who spends lots of money to get out of paying taxes is, well, a little unpatriotic. Almost, you might say, like a draft-dodger. Davidson’s simplify-the-laws proposal is sound, but here’s another one: If a millionaire’s money doesn’t like it here, why not grant it the wish that the unpatriotic Philip Nolan got in Edward Everett Hale’s short story, “The Man Without a Country”? That is, keep it at sea for the owner’s lifetime, or at least never let him spend his money in America, if this country isn’t good enough for it. That’s one offshore solution we’d like to see.
Tags: Offshore Bank Accounts