In 1983 just 10 percent of America's corporate profits were funneled through places that charge little or no corporate income tax; today more than 25 percent of profits go through tax havens. The Obama administration could tell the Caymans-now fifth in the world in bank deposits-to repeal its bank secrecy laws or be invaded; since the island nation's total armed forces consists of about 300 police officers, it shouldn't be hard for technicians and auditors, accompanied by a few Marines, to fly in and seize all the records. Bermuda, which relies on the Royal Navy for its military, could be next, and so on. Long before we get to Switzerland and Luxembourg, their governments should have gotten the message.
Now even I don't go that far! Actually, nor does he:
Barring gunboat diplomacy (tempting as it is), there is no reason we cannot pass laws to block financial transactions with tax havens or even, Cuba-style, make it a crime for Americans to visit or do business with them without special permission. Congress could declare the hiding of funds a threat to national security and require that anyone with offshore assets disclose them to the IRS within 30 days and pay taxes, interest, and penalties within 180 days. For the holdouts, temporary special teams in the IRS and Justice Department could speedily pursue civil or criminal charges.
The analogy with Cuba is interesting: Cayman is now much more dangerous to the US.
He also ignores things like country by country reporting. And he ignores the fact that international cooperation is essential to close the threat of tax havens, the US cannot do this one alone, but his understanding of the significance of the issue is spot on.
If the OECD is on the ball it will be calling all affected (by which I mean harmed) parties together on this issue very soon. Progress is essential.
PS I see that in Tax Notes he expands the idea....take a read....as he notes, the Cayman's defence for what they do is pure hypocrisy