The newest slant in the American media and blogosphere is to claim to be a “fact checker,” while inserting a partisan view of reality in the news. Rating political candidates’ statements for truthfulness is worthwhile, but if bias and misinformation creeps in, the facts get lost.
It’s no surprise that at both political conventions, Mitt Romney has been a main topic of discussion for the fact checkers. Whether it was the flag on a yacht he boarded, or his international investments, journalists have been investigating him. But they bring their own bias to their work.
ABC News condemns Romney for investing in “tax shelters” in a “tax haven,” but doesn’t slow down long enough to find out or explain what that means. Liberal blogs spread their work across the world. Even the Wall Street Journal, in a thorough analysis of Senator Harry Reid’s speech, succumbed to the “conventional wisdom” and said Mitt Romney invested in “Cayman Island Tax Shelters.”
So it’s time for Cayman Finance blog to fact check the fact checkers. They are wrong in saying Cayman is a tax haven. What Cayman does is allow international investors to come together to invest in the US without adding another layer of tax. Each investor is responsible for paying tax in their home country, a process that the Cayman Islands Government assists with by cooperating with tax authorities from other nations and promoting transparent banking.
Implying that by investing via Cayman, Mitt Romney engaged in tax fraud is wrong. This fails to distinguish between the compliance levels of different nations. Cayman is not a bank secrecy jurisdiction and has long since established co-operation arrangements with tax authorities and regulators in many countries. Our banks will welcome your business, but you will have to prove your identity, and you can’t hide your assets here to avoid taxation back home.
For example, Cayman has Tax Information Exchange Agreements with 27 countries including the US, and according to the GAO, a strong record of cooperating with the US Departments of Treasury and Justice in aiding tax compliance. Implying that Cayman enables tax evasion based on bank secrecy, or on the amount of money on deposit here, is completely incorrect. Mitt Romney is right, investing here didn’t excuse him from paying taxes in the United States. Nor could he hide his money. Journalists should learn these facts before criticizing our nation.
Rather than mistakenly vilify Cayman as a tax haven, an informed fact checker would note that with its network of regulator to regulator cooperation agreements and tax information agreements and its long standing record of cooperating with US authorities. There is no better place than Cayman for structuring inward investments to the US.
In addition Cayman is regarded as a well-respected jurisdiction by financial institutions, investors, development banks and government and regulatory agencies. Global institutional investors, including pension funds and US government agencies which invest in emerging market countries, take comfort that Cayman investment funds in which they invest are established under internationally recognised legal principles which protect their rights.
In Cayman, investors from Asia, the Middle-East, Europe, and the US can form new ventures that invest worldwide. This allows money to flow through the international financial system to the US without a toll charge being added along the way. Billions of dollars of foreign investment passes through Cayman each year, on its way to the US and other nations, where it is used to help businesses grow.