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CAYMAN ISLANDS OFFSHORE TAX EVASION AGREEMENT

Bush Administration Continues to Protect Super-rich Tax Evaders

December 10, 2001

A few months ago I discussed how the Bush administration is ignoring massive tax evasion by the super-wealthy in offshore tax havens.  Continuing its willful blindness in this area, Bush's Treasury Secretary, Paul O'Neill (an unabashed proponent of abolishing corporate taxes and slashing social security and Medicare) just signed an agreement with the Cayman Islands that seems to have just three small things wrong with it:

  • it covers only federal income taxes, ignoring cheating on federal estate, federal gift and state-level taxes
  • it doesn't require the Cayman Islands to start cooperating with American tax investigators until 2004
  • information about tax evasions currently taking place in the Cayman Islands will be sealed and can never be made available to the Internal Revenue Service or the Justice Department (!)

Yes, you read those last two ones correctly:

The 25-month delay gives tax cheats ample time to move their money to another tax haven, said Jack Blum, a Washington lawyer who specializes in financial frauds.

"They have written this in a way so that the people who have been violating the law can get themselves out from under the mess by moving to another jurisdiction where there is no agreement," Mr. Blum said. "This is simply astonishing."

"Astonishing" is one word for it.  Robert Morgenthau, the Manhattan district attorney who has been critical in the past about the lack of serious enforcement efforts by the Bush administration against offshore tax cheats, has another word: "a sham."

"What's bad is people are going to think the government is doing something when this is just a fig leaf," said Mr. Morgenthau, who disclosed last summer that Federal Reserve data show that $800 billion is being held in Cayman Islands accounts for Americans, an amount equal to roughly one-third of all domestic bank deposits.

Mr. Morgenthau called... for the Bush administration to cut off the Cayman Islands' access to the United States banking system immediately, saying that was the only effective way to end decades of tax evasion and other felonies by Americans using Cayman Islands accounts.

Fat chance of that happening!

The Bush administration leaves no stone unturned in its efforts to transfer wealth to the rich.  It either does so overtly -- as in its recent "stimulus package" proposal to repeal the corporate alternative minimum tax and retroactively refund to corporations the billions of dollars they have paid in that tax over the last 15 years.

Or, Bush officials will do so covertly, by signing Cayman Island-type agreements which pretend to catch wealthy tax evaders, but which in reality allow the cheats to escape with their untaxed billions -- while the rest of us, without the luxury of offshore tax havens, dutifully pay our taxes and support the country.

Oh, would that the American public would see through a Bush sham at least once!

This was a selection from The Daily Diatribe

More on Tax Evasion & other Economic Injustice

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