Baucus proposal ‘better for Jersey’

Tuesday 24th March 2009, 3:00PM GMT.

Stephen Platt's pic A SECOND draft anti-tax haven bill filed in the United States Senate could be more favourable to Jersey’s offshore finance sector, says a senior lawyer.

As reported briefly on Friday, Senator Max Baucus, chairman of the Senate Finance Committee, last week filed an alternative to the Stop Tax Haven Abuse Bill filed by Senator Carl Levin last year. The Levin bill, which has been backed publicly by US President Barack Obama, would include a blacklist of ‘offshore secrecy jurisdictions’, including Jersey, Guernsey and the Isle of Man.

This blacklisting does not take into account the Tax Information Exchange Agreement signed by the Jersey and US authorities in 2003 or the number of TIEAs signed since then with various other OECD member countries, most recently the United Kingdom.

The Baucus proposal does not include a black list, although it puts forward some strong measures and additional powers to the American tax authorities.

Jersey-based barrister Stephen Platt (pictured) said that the Washington administration intended to act against offshore tax havens but there was no consensus among policy makers at the moment.

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1
Bean abroad

March 25, 2009 at 3:31 pm

In addition, it is worth noting that the recent attempts to slap retrobutive taxes on the bonus payments made to AIG executives has largely been considered to be an abuse of the US tax system to surgically penalize, retrospectively, a very small minority of people and such abuse of the tax system has been considered “unconstitutional”. I suspect future US legislation regarding their tax system is likely to come under considerable more scrutiny than before, which is also likely to be to our benefit.

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2
David Stephens

March 25, 2009 at 6:46 pm

The senior lawyer is as deluded as the politicians if he believes anything other than the decimation of our finance industry is on its way.
The ‘logic’ of our arguement is lost against the power of political will -hence Gordon Brown extending the wording of the G20 attack from tax havens to offshore centres.

Business whose interests are predominantly in the offshore jurisdictions (aforementioned lawyer included) will of course say anything to remain upbeat, but it is simply playing the fiddle on the deck of the titanic; play as long as you like but you are still going to drown.

What we need are finance sector business to be creative: eg diversify to mainland jurisdictions (fronting the operation) whilst the expertise and work can remain here -exactly the opposite of the original ‘offshore nameplate’ model. But to make this shift to a new model takes insight and courage -something too many organisations are sadly short of.

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