Treasure Islands - Nicholas Shaxson [153]
13.Some countries have limited defenses against deferral; so-called “Subpart F” legislation in the United States (disallowing deferral on passive income) is an example. Even this defense is patchy, however, and developing nations usually find it impossible to construct meaningful defenses using this strategy.
14.David Cay Johnston, Perfectly Legal: The Covert Campaign to Rig Our Tax System to Benefit the Super Rich—and Cheat Everybody Else (New York: Penguin, 2003).
15.Eric Helleiner, States and the Reemergence of Global Finance: From Bretton Woods to the 1990s (Ithaca, NY: Cornell University Press, 1996), pp. 135–6. “Ironically the triumph of ‘monetarism’ seemed to be occurring at just the time that international linkages were reducing the Fed’s ability to control the monetary base.”
16.Ibid., p. 137.
17.Ronen Palan, The Offshore World: Sovereign Markets, Virtual Places, and Nomad Millionaires (Ithaca, NY: Cornell University Press, 2003), p. 134.
18.The Federal Reserve Bank of St. Louis, which studied the new offshore IBFs, noted that the decline in Caribbean business “suggests that the growth of business in this area was almost entirely intended to bypass U.S. monetary regulations.” See K. Alec Chrystal, “International Banking Facilities,” St. Louis Fed. Review, April 1984, https://research.stlouisfed.org/publications/review/84/04/International_Apr1984.pdf.
19.Mark Hampton, The Offshore Interface: Tax Havens in the Global Economy (London: Macmillan, 1996), p. 63.
20.Palan, The Offshore World, p. 135.
21.Author’s interview with Rosenbloom, December 1, 2009.
22.The Portfolio Interest Exemption.
23.Author’s interview; also see Testimony of Michael J. McIntyre and Robert S. McIntyre on Banking Secrecy Practices and Wealthy American Taxpayers before the U.S. House Committee on Ways and Means, Subcommittee on Select Revenue Measures, March 31, 2009.
24.Testimony of Michael J. McIntyre and Robert S. McIntyre on Banking Secrecy Practices and Wealthy American Taxpayers Before the U.S. House Committee on Ways and Means Subcommittee on Select Revenue Measures, March 31, 2009, http://www.ctj.org/pdf/mcintyresw&mtestimony20090331.pdf.
25.The U.S. Foreign Account Tax Compliance Act (FATCA) of 2010 tightens up some aspects of the QI rules, making it harder for U.S. tax cheats, but it leaves the secrecy for foreigners in place. See “FATCA: New Automatic Info Exchange Tool,” Tax Justice Network, May 18, 2010.
26.See Michael J. McIntyre, “How to End the Charade of Information Exchange,” Tax Notes International, October 26, 2009, p. 194.
27.Much of the information comes from “Failure to Identify Company Owners Impedes Law Enforcement,” Hearing Senate Permanent Subcommittee, November 14, 2006. Also “U.S. Corporations Associated with Viktor Bout,” Prepared by Senate Permanent Subcommittee on Investigations, November 2009, on Senator Carl Levin’s webpage, levin.senate.gov.
28.“Failure to Identify Company Owners Impedes Law Enforcement,” Hearing Senate Permanent Subcommittee, November 14, 2006, p. 3.
29.L.J. Davis, “Delaware Inc.,” New York Times, June 5, 1988.
30.Corp 95, http://www.corp95.com/, accessed June 10, 2010.
31.The forms of secrecy are different: lack of corporate transparency in Delaware and lack of financial transparency in Switzerland.
32.“Failure to Identify Company Owners Impedes Law Enforcement,” Hearing Senate Permanent Subcommittee, November 14, 2006. A new act was introduced in 2008, the Incorporation Transparency and Law Enforcement Assistance Act, aiming to beef up transparency in this area. At the time of writing, the bill was on the sidelines.
33.Jeff Gerth, “New York Banks Urged Delaware To Lure Bankers,” New York Times, March 17, 1981.
34.Chancery courts emerged out of English ecclesiastical courts and trust laws, where concepts of legal guardianship and fiduciary duty were paramount, and this makes them useful for what Delaware’s Court of Chancery does most of all: