I’ve Got You, Babe – April 04, 2008
Quote from ABC’s Brian Ross: (emphasis mine)
“An examination of the records Clinton has filed reveals her husband is a partner in an investment fund, Yucaipa Global Partnership, registered in the Cayman Islands. The former president’s Cayman Island investment is part of his dealings with a close friend, Los Angeles billionaire Ron Burkle. Clinton is also expected to receive a payout of around $20 million for his role as an advisor to Burkle’s investment fund. Clinton also has been paid millions as a consultant for a company run by another close friend, Indian-American businessman Vinod Gupta. Clinton had earned $47 million in speaking fees since leaving the White House. A spokesman for the Clinton campaign says the former president and his wife paid full US taxes at the ordinary income tax rate, meaning they get no special tax breaks because the Cayman investment fund offshore doesn’t give them one, they say. But with taxes, the devil is in the details, and the proof of what they really pay will come when the Clintons finally make public their tax returns sometime, they say, before, April 15th.”
When people hear of business dealings in the Cayman Islands, especially “investment” business, they think of tax sheltering, tax evading and money laundering. Why? Some articles on the subject:
http://www.google.com/search?sourceid=navclient&aq=t&ie=UTF-8&rlz=1T4DKUS_enU… – PLEASE READ THE ENTIRE ARTICLE
According to representatives of Charles Adams, Ritchie & Duckworth, a Cayman Islands law firm that is involved in the hedge-fund business, the Cayman Islands offer prospective hedge funds:
- “No regulatory restriction on investment policies or strategies, commercial terms…, or choice of service providers….
- “Tax-neutral environment with no direct corporation, capital gains, income, profits or withholding taxes applicable to funds” (emphasis added).
In 1993, the decision was made to turn this tourist trap into a major financial power, through the adoption of a Mutual Funds Law, to enable the easy incorporation and/or registration of hedge funds in a deregulated system. (Technically, a hedge fund is a type of mutual fund, but not your grandfather’s type.[*]) According to a firm that incorporates hedge funds, “The Mutual Fund Law was established … to position the Cayman Islands as a hub in the financial industry.”
Senators Carl Levin (D-Mich.) and Norm Coleman (R-Minn.)—chairman and ranking member of the Senate Permanent Investigations Subcommittee of the Homeland Security Committee—have shown that the hedge funds are a center for circulating hundreds of billions of dollars in hot-money flows and tax shelters. They document a case of the brothers Sam and Charles Wyly of Texas, who used two Cayman Island hedge funds to store and shelter $300 million from taxes in the United States.”
“The transparency group WikiLeaks.org currently seems to be under heavy fire. The main WikiLeaks.org DNS entry is unavailable, reportedly due to a restraining order relating to a series of articles and documents released by WikiLeaks about off-shore trust structures in the Cayman Islands. The WikiLeaks whistle blower, allegedly former vice president of the Cayman Islands branch of Swiss bank Julius Baer, states in the WikiLeaks documents that the bank supported tax evasion and money laundering by its clients from around the world. WikiLeaks alternate names remained available until Saturday, when there seems to have been a heavy DDoS attack and a fire at the ISP. The documents in question are still available on other WikiLeaks sites, such as wikileaks.be, and are also mirrored on Cryptome. Details of the court documents have also been made available.”
IRS says American taxpayers using credit cards, foreign jurisdictions to evade taxes
The IRS reports widespread tax evasions by Americans, who secretly deposit money in tax havens such as the Cayman Islands and withdraw the funds using credit cards. The IRS estimates 1 to 2 million Americans may be using such accounts, although critics challenge the number as being too high.
On Jan. 12, 2003, the IRS offers a three-month amnesty to people who admit to using the offshore credit cards if those cardholders provide information about promoters who help set up the accounts. The IRS reports in February 2004 that almost 1,300 taxpayers come forward and that it recovers $170 million in lost tax revenue.
If America needs a new enemy, the Cayman Islands might be a refreshing choice. John Kerry singled them out during the 2004 campaign, complaining, “There are enough brass-plate companies down in Georgetown, the Cayman Islands, different places, to make anybody in America sick when they look at their own tax bill.” Tax-sheltering aside, there’s also a Caymanian coziness with companies that later go bust–according to one investigator looking into Enron, “We found 441 entities setup in the Cayman Islands,” most of which were “inactive shells.” Even the Islands’ essential selling poi
nts–tax-free banking, adventurous financial instruments (of the not-legal-in-some-states variety), sweeping secrecy laws–seem to carry the whiff of, well, prison.
Now, let’s get down to Hillary’s campaign promises and positions in the 2008 election.
Notice that this comes directly from Hillary’s own web site. There is a lot to point out here, but the subject at hand is tax-sheltering.
Achieving work family balance goals consistent with fiscal discipline: The total cost of Hillary Clinton’s work-family agenda is approximately $1.75 billion per year. Hillary will finance this cost without increasing the deficit by dedicating the revenue from enacting the anti-tax sheltering reform referred to as “codifying the economic substance doctrine.” By establishing a uniform definition of a tax shelter, this reform will help crack down on abusive tax transactions that have no economic purpose. It will raise $2 billion in 2012 and about $26 billion over ten years, according to the Joint Committee on Taxation.
Hillary plans to raise $2 billion in 2012 and $26 billion over ten years, simply by re-defining “tax shelter”. It depends on what “is” is, again. If Hillary is establishing a uniform definition of “tax sheltering”, you can bet the new definition will exempt her husband’s lucrative business dealings registered in the Cayman Islands.