Money Matters

According to this report in yesterday’s BusinessWeek, Bermuda’s economy is looking bleaker than ever: Visitors are down 12%, tourism spending is off by half, and worst of all, the country’s financial service industry—the bread and butter of long-term economic health—is being threatened by proposed anti-tax-haven legislation in Washington. I’m not worried about tourism numbers, after all, what leisure travel destination hasn’t been effected by the global economic downturn? But it’s that last part that really has corporations concerned (and others, like Tyco and Accenture packing its bags altogether). The biggest stink is over the Neal Bill—introduced by Representative Richard Neal (D-Mass.) in July, the proposed bill would limit the ability of U.S. companies incorporated in Bermuda to shelter overseas profits. This includes limiting tax deductions by major reinsurance affiliates, which would no doubt cause major damage to the local finance-dependent economy. I’ve never been one to publicly go to bat for the corporate dollar, but these companies are a big reason why Bermuda is such a special place to live. Tax deductions mean profit and profit means incentives—basically huge reinvestments in island infrastructure, education, and community outreach. Without these local tax loopholes the flow of cash would largely be cut off and that’s no good for Bermuda. For the island’s sake, here’s hoping President Obama and the other folks in Washington agree.