Except when the residents of any community are not genuinely free to leave it (for whatever reason), logic tells us that members of the community have consented to be bound by all the community’s laws. That’s only common sense. They may not like all the laws; they may even hate and resent some of them, and agitate to have them changed. But whatever their feelings, they always have these three options. 1) They can stay and work to change the laws they hate; 2) they can stay and accept the laws they hate; or 3) they can leave. I can’t think of a fourth option.
Tax laws, gun laws, traffic laws, abortion laws, it doesn’t matter which laws. If your strata committee orders you to paint your front door purple, and you don’t like purple, the same three options exist. If your spouse snores all night and keeps you awake, same thing. “Community” is a broad concept.
If a community’s rulers are crooks or charlatans, liars or tax-dodgers; if they are sex-maniacs or half-wits or psychopaths; if they do things that are illegal, immoral or stupid: the options are always the same. The USA has been cursed with elected or appointed officers who are all of those things; so has Britain; so have most nations in history. In all cases, their subjects have been faced with the same three options. Some of their subjects have knuckled under, some have rebelled, some have fled.
As a longtime resident of an Offshore tax-haven (and a former resident of two others), I marvel at the criticism levelled at Cayman, Bahamas, Bermuda and all the other Offshore centres. Lately, there has been a lot of fuss in the USA over Mitt Romney’s use of Cayman to minimise his exposure to US taxes. I find little to like about Romney, and I know almost nothing about US tax laws: but I find it hard to believe that he has defied the laws. More likely, he is simply taking advantage of loopholes in them.
In technical terms: he would be avoiding taxes, not evading them. Avoidance is legal, evasion is illegal, and the practical difference is the price of a good tax-lawyer. Logic tells us that Americans who have the means to leave their country but don’t, have consented to accept their tax laws, or are working to change them. Hey, that’s life. Leave us out of it.
Offshore tax-haven sectors, generally speaking, exist to accommodate rich people with clever and high-priced lawyers. Poor people can’t afford to pay expensive lawyers to read every line of the wretched IRS code. Clever lawyers sniff out loopholes in the code, and recommend them to their rich clients in exchange for exorbitant fees.
Americans who resent Offshore tax-havens should ask themselves this: Who is it that composes the IRS code, and leaves the loopholes? The US Congress and its minions, that’s who. Second question: When each loophole is discovered by some clever and high-priced lawyer, whose responsibility is it to close the loopholes so that they can’t ever be used again? The US Congress again. Well, fancy that!
Who benefits from the existence of the loopholes, besides Mitt Romney? Answer: IRS employees, clever and high-priced lawyers and their employees, residents of Offshore tax-havens, Mitt Romney and colleagues, and – ta-dah! Members of the US Congress and their minions. Sigh. Who ya gonna call – taxbusters? Huh. Ain’t nobody here but us chickens, boss!
We in the tax-havens don’t feel guilty in the least. We pay plenty of taxes, down here: just no Income Tax. We believe Income Tax is theft. Well, isn’t it?
