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Andrew Tobias
Andrew Tobias

Money and Other Subjects

He’s . . . Snortling?

June 13, 2001February 19, 2017

The Los Angeles Times did a story last week that questioned the President’s level of engagement. “He’s engaged,’ fumed a Republican senator who participated in the recent budget meeting in the White House Cabinet Room, ‘but it’s all surface engagement – all kinds of wisecracks, snortling and nicknames.”

What has stuff like this to do with your money? Nothing directly. But national and world confidence are important factors in economic well-being. When markets feel secure, they thrive. When they feel shaky, they sometimes stumble. Many believe that the President can get his mind around substantive issues when he applies himself – and some, including a ‘conservative midwestern Republican’ quoted in the story, wish he would.

Meanwhile, the New York Times reported Friday that seven former IRS commissioners, three of them Republicans, have written a letter to Treasury Secretary O’Neill, urging him to ‘withdraw his opposition to a proposed crackdown on … tax havens.” These tax havens are terrific for wealthy people who wish to evade taxes. A manufacturer I used to know told me some years ago that he keeps millions of dollars in a secret account overseas, so it can earn interest and appreciate tax-free. He has three homes in America and none that I know of abroad – he’s 100% American. “Well, but it’s illegal,” I sputtered, naively. “Doesn’t everybody do it?” he replied?

My guess is that very few do it – but enough for the Treasury (and the treasuries of other nations) to be losing billions of dollars (and euros and pounds) that the rest of us have to make up.

The Clinton administration was working with the 30-member Organization for Economic Cooperation and Development to fix this. Reports the Times:

[The OECD] has already persuaded nine countries that it calls tax havens to cooperate with criminal tax investigations and to ease some of their bank-secrecy laws. But many of the countries it regards as offenders, including Panama and Turks and Caicos, have stiffened their opposition since Mr. O’Neill issued a statement on May 10 saying the Bush administration would not support an overly broad effort to impose sanctions on tax havens.

The letter to O’Neill from the seven former IRS commissioners said that “we have never been closer to cracking down on tax abuse through the use of tax havens and that is especially important to the United States.”

Not so fast, seems to be the new administration’s policy on this. Which is good news for the manufacturer I used to know.

We “cannot turn a blind eye to toward cheating in any form,” O’Neill has dutifully averred. And that’s fine. But if the bank-secrecy laws of these countries are maintained, then even the sharpest eye may see no evil.

It is, as I’ve snortled, a grand time to be wealthy in America.

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