Friday, December 02, 2005

The Two Major Island Tax Havens

World wide tax breaks.

I normally prefer to use links to an article rather than print the whole thing. This was in an email though, just a small part of the informative A-Letter put out by former congressman Bob Bauman. This excessive tax protection information is well worth the read:



Two Major Island Tax Havens

Dear A-Letter Reader:

I often get either knowing or incredulous reactions when I mention in my public talks that the two leading tax havens in the world in total assets are islands, not the Caymans or Bermuda, but Manhattan and the City of London.

The truth is that, for anyone in the world except their own citizens, the U.S. and the U.K. are major tax havens, allowing foreigners to invest, own real estate, and make all sorts of profits, while avoiding almost all of the domestic taxes each nation imposes on their own. In the case of the United States, this contradictory tax policy allows billions of dollars, euros, and other currencies to be invested in US government bonds that keep the deficit ridden Bush administration afloat. And this US tax policy also contradicts its own tax grabbing which seeks to impose taxes on every penny Americans earn anywhere in the world. So the US lets foreigners escape nearly tax free, but chases its own citizens for taxes, no matter where they live or where they earn their income.

London is, for the very wealthy, the tax-free capital of the western world. If you're planning to come to the UK, whether short-term or permanently, you'll discover a tax regime that can be as welcoming as any tax haven anywhere in the world, so long as you plan ahead carefully.

UK tax liability is dependent on whether you are UK resident, UK ordinarily resident or UK domiciled, all legal terms that make the difference in whether you, as a foreigner, can live free of the taxes Her Majesty's Labour Government impose in copious amounts. A major and very attractive loophole in British tax law allows foreigners with "substantial ties" to another nation to live in the UK free of taxes on their offshore earnings. Nearly two million foreigners live there and an estimated 60,000 of the wealthiest escape the terribly high income and other taxes that Tony Blair's Labour government imposes on most of its regimented citizens.

Even though the UK is one of the loudest screamers against what the OECD calls the "unfair tax competition" from admitted tax havens, one never hears the UK government admit that it is one of the leading tax havens of the world - at least for rich resident foreigners. The US, the other leading tax haven, although quiet on the issue of tax havens, is where non-US foreigners invest in America and finance the US trillions in national debt and trade deficits.

For years the Labour Party has run on a vague promise to abolish this rich foreigner loophole. Chancellor of the Exchequer Gordon Brown, the would-be next Prime Minister, has threatened to close the loophole, after several time wasting studies on the subject. And every year in his budget, Brown has left the loophole wide open -- and kept on studying. That may be because many of these wealthy foreigners who live in the UK contribute large sums to Labour Party campaigns.

The point of this review is to show that some of the major nations of the world, who loudly attack smaller jurisdictions like Panama or Hong Kong, are in fact themselves tax havens. And there is nothing wrong with low or no taxes anywhere in the world, be they large or small.

That's the way that it looks from here.

BOB BAUMAN, Editor




I had a post a week or two ago on PT the perpetual travelers, this fits in just fine.


I would suggest that you visit the site that provides the free A-Letter emails. They are always informative, and you can cancel anytime. These are honest and honorable people, a nice change from the wackos and weenies that assault our ears every night.

Read the smart stuff.

Allan

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