Tax Haven Starts Charging Taxes, Satan Skates to Work
Aaaaaaaaaaaaand a down we go...
What happens to a tax haven when it has to raise taxes? The Cayman Islands may soon find out.
Caught in a vise of shrinking revenue and stubbornly high public spending, the Caymans averted a fiscal crisis this week by securing a $60 million overseas loan.
But the Foreign and Commonwealth office in Britain, which oversees the Caymans and can veto foreign lending requests, has delivered an ultimatum: The rest of the $284 million the Cayman government says it needs will not be forthcoming until this offshore financial center imposes spending cuts and considers some form of direct taxation on businesses here and its 57,000 residents.
For a tropical paradise that has never taxed income, property, corporate earnings, retail sales or capital gains, such a suggestion borders on heresy.
Heresy? Yeah I'd say. Next you're going to tell me South Carolina is going to start levying a $3/pack cigarette tax.
So where will the hedgies and banks hide now?