I'm curious to note that the mere idea of having an income tax is causing mayhem in Cayman.
Wonderful phrases are being used such as:
Opponents argue that a social contract may have been broken
That's a typical offshore inversion of the normal use, of course.
In the meantime:
Anthony Travers, chairman of the Cayman Islands Stock Exchange, described the tax plan as "probably the single greatest existential threat to the Cayman Islands in over 200 years."
Hyperbole Tony. And so untrue.
But amusing that Cayman has realised like most of the rest of the world that firstly government spending is essential and secondly it has to be paid for.
Finally, as if confirmation were ever needed, all this is happening because the UK is refusing to agree the Cayman budget. So much for home rule and independence. That charade is also shot to be bits.
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Richard
I believe the sole reason why the Budget needs to be approved by the UK is because the Cayman government has already got external borrowings, and when they took on that debt it was only possible to do so with the UK standing behind it as effective guarantor. As a result, they need to approve the Cayman Budget. My sources in Cayman tell me that this requirement would disappear if Cayman was to repay its external borrowings, which seems perfectly reasonable if its correct.
Can anybody confirm this?
You may be right
But that doesn’t change my argument – they cannot act without consent because we’re the back stop
Because they’re still under our control when all is said and done
So we’re responsible or them being a tax haven
I’m not sure that’s 100% correct. I think they are effectively under budgetary control of the UK only to the extent that they have borrowings from third parties which the UK is on the hook for. If and when they have no such borrowings then the shackles are off.
Could be decades before that happens though!
The reality is that their economic situation means they are under our control