As previously reported here, the Caymanian Compass recently conducted an online poll which asked the question: Should Cayman agree to the US’s tax-collection “FATCA” program? Nearly 58% of respondents declared “No”.
Responding to such a clear rejection of FATCA, Gonzales Jalles of Cayman Finance subsequently published an article which neatly sums-up the conflicting feelings within lucid members of the legal and finance communities worldwide – and just how little it takes to soothe their tortured souls. Mr. Jalles begins his tale thusly:
Almost 58% of voters in a recent poll suggested Cayman should reject FATCA. Don’t get me wrong, my stomach says the same, but I’m going to try to explain why we cannot.
If the Cayman Islands Government and the banks wanted to escape FATCA, they would need to stop using the US dollar all together, and we would need to create a new currency system where our currency is not pegged to the dollar. Given the UK and Europe are going the same way, we could not peg it to those currencies either. Therefore, we would need a floating currency, which will automatically mean the complete disappearance of our international financial industry that represents over 50% of our GDP and government revenue.
If you still think the Cayman Islands Government and local institutions should have said “no”, I give up. You should move to Cuba, probably the only country in the world that might remain completely out of it.
Lucky Cuba. Driving Detroit museum-pieces forever seems like a small price to pay for avoiding FATCA.
Jalles then goes on to deliver the most misleading and pointless FATCA analogy I’ve heard this year:
Let’s say the police catch you speeding and driving under the influence. You are going to pay a fine and be riding a bike for a while. Do you accept it or do you refuse to pay the fine and keep driving, making things worse for yourself?
Apparently refusing to bow to FATCA is the equivalent of both speeding AND driving under the influence – who knew?
Finally, Mr. Jalles concludes with this passionate confession:
Maybe a few lawyers and accountants like FATCA as they will see more business, but most of us don’t. It’s like a hurricane heading straight at us — ignoring it is not an option, we need to accept it and get ready.
In other words, what’s left of my soul says this is bad, but not bad enough to try to fight it so might as well make some money out of it like everyone else and forget about all that collateral damage stuff. Those people are screwed anyway so why even bother?
And that is today’s lesson in how FATCA capitulation works – think locally, act globally.
Expect numerous bravura repeat performances in Canada any day now as the equally tortured souls at Finance and the CBA peddle their toxic IGA to Mansbridge while crocodile tears flow for the cameras.