Cayman Islands Heads for Bankruptcy
September 8th, 2009How about if they just tax the money related to the drug trade? *wink*
Via: Guardian:
The white sands of Seven Mile Beach on Grand Cayman have long caressed the toes of the world’s wealthiest financiers, who flock to this balmy spit to avoid the taxman’s prying eyes.
But the world’s biggest hedge-fund venue and fifth-biggest bank centre is now threatened, as the government of the Cayman Islands heads for bankruptcy — unable to pay its own staff and facing the prospect of introducing taxes as income from the world’s shrunken financial system collapses.
But the situation is about to get worse after the British government, which has ultimate responsibility for the islands, last week refused to bail out the Caribbean idyll. It is not convinced the country will have the money to pay it back.
At the same time, hundreds of civil servants found that pension contributions and health insurance payments were missing from their pay slips. Contractors and government suppliers also had bills unpaid.
The leader of government business, William McKeeva Bush, begged the British government to borrow $310m (£190m) from banks. In a strongly worded response, Chris Bryant, a junior Foreign Office minister, has demanded the Caymans cut its borrowing and debt. And in a shockwave that will send tremors through the island’s financial elite, Bryant even suggested that the tax haven introduce taxes.
“I fear you will have no choice but to consider new taxes – perhaps payroll and property taxes,” Bryant wrote to Bush. “I understand, of course, that in so doing you will want to consider carefully the implications for Caymans’ economy, including the financial services industry.”
The wealth in the Caymans is staggering. Its hedge funds alone look after $2.3tn (£1.4tn), according to figures last year, and its GDP places it as the world’s 12th richest jurisdiction, despite a population of only 51,900.
First Switzerland, and now the Cayman Islands?
What’s a tax dodging, money launderer to do? I visited Grand Cayman Island many times since 1995, earned my scuba diving credentials there.
Every time I went back there, the land above the sea sucked more and more. Development everywhere. Wall to wall hotels, condominium develpments, and freaking rush hour traffic. So absurd.
The last time my former man-friend and I went there we went to Cayman Brac where the preferred form of transportation was a bicycle. An idyll compared to Grand Cayman.
God I hope they start a taxation system in the Caymans. Drive the blood sucking vermin that make money off of nothing gangsters out of there. Then demolish a few gazillion dollars worth of useless buildings that only exist to support efforts to dodge whatever it is people who invest in a tax free zone are there for.
Don’t get me wrong, if a country decides not to tax, well that’s fine by me. But its the people that abuse that system that are now ruining the Caymans, just like Iceland was destroyed by the carry trade.
There must be billions of Enron and assorted contractors of the military industrial complex in various currency denominations stashed in the Caymans.
Pity the natives.
Not the thieves.