I don’t know what they are or what they are for. People seem to think they are some nefarious countries designed to help deadbeat companies avoid paying their tax bills in the countries where they really do business. People say they intentionally create the ability for corporations and individuals to hide their money and avoid paying taxes. I don’t know anything about that.
The OECD made a list of Tax Havens in 2000. The Cayman Islands, Barbados, Luxembourg, Switzerland all made the list, as did Belize, Ireland and the Seychelles among others.
Just because a company has a subsidiary in a Tax Haven does not mean they do not have legitimate business being there. With a population of 50,000 there is certainly legitimate business to be doing in the Cayman Islands. For instance Berkshire Hathaway has 27 foreign subsidiaries, one in the Tax Haven of Ireland. Costco has 3 foreign subsidiaries, one in the Tax Haven of Bermuda. PepsiCo spreads 70 subsidiaries among the Tax Havens but to be fair it is hot in Bermuda and they may need thirteen distributors there. Marathon oil has 115 foreign subsidiaries, 76 in Tax Havens and 65 in the Cayman Islands. Exxon Mobil has 122 foreign subsidiaries, 32 in Tax Havens, and 18 in the Bahamas.
Other examples would be Bank of America with 311 foreign subsidiaries, 115 in countries considered Tax Havens, 59 of which are in the Cayman Islands. Goldman Sachs has 55 foreign subsidiaries, 29 in Tax Haven countries and 15 in the Cayman Islands. Hartford Financial Services has 32 foreign subsidiaries and 7 in Bermuda. JPM has 163 foreign subsidiaries and spreads 38 between 11 Tax Havens. Lehman Bros had 141 foreign subs, 57 in Tax Havens, 31 in the Cayman Islands. Morgan Stanley has 568 foreign subs, 273 in Tax havens, 29 of which are in Luxembourg, 14 in the Marshall Islands and 158 in the Cayman Islands. Citigroup has 1240 foreign subsidiaries, 427 in Tax Havens, including 17 in Panama, 18 in Singapore, 19 in Cost Rica, 21 in Jersey, 40 in Hong Kong, 90 in the Cayman Islands and 91 more in Luxembourg.
My grandfather used to hide cash in the basement for emergencies, and every once in while he would forget where and lose it.
Before we replaced the money the banks lost, maybe we should have looked in the hiding places.
Michael Mundaca, The Deputy Assistant Secretary of International Tax Affairs and the Fox watching this Henhouse, questions the value of this GAO report because of the quality of the lists and the suspicion that some of the Tax Havens might not be actually Tax Havens.
I would like to thank Mr Mundaca for his diligent service to his Country, and would like to share it with the Citizens of the United States of America.
You can read the report here;