The Caribbean Tax Havens

With the unveiling of the "Pandora Papers", which surpasses the earlier "Panama Papers" in revealing the extent of tax avoidance by using shell companies in tax havens, let's have another look at Caribbean tax havens and their background history.

Here is what I think is an amazing example of how history repeats itself. It has been added to the compound posting on this blog, "How History Repeats Itself".

The leaders of the major western nations recently announced a crackdown on global corporations that got away with not paying taxes. Such corporations often have their headquarters in a nation with low taxes, even though they do most of their business in other nations with higher taxes. The plan was to force these companies to pay taxes according to where most of their business was done, regardless of where their headquarters was located.

The focal point of places to put money in order to avoid paying taxes on it is the Caribbean. Possibly the best-known so-called tax haven in the world is the British Virgin Islands.

I notice something really interesting about how history repeats itself.

In the Caribbean is the island of Jamaica. Back in the days of piracy there was a notorious hangout for pirates on Jamaica's south coast, not far from present-day Kingston, known as Port Royal.

Piracy is a little bit complicated. My understanding is that a pirate was simply a robber. A privateer or buccaneer or, in French terminology, a corsair was a pirate who only raided ships of nations with which his country was at war. With no coast guard or radios to call for help many ships were at the mercy of pirate ships.

So much of the plunder that the pirates got was brought to Port Royal. It was buried under the sea by a terrific earthquake.

Can you see the historical similarity between Port Royal and the modern-day tax havens of the Caribbean? I have never seen this pointed out.

Just as pirates once prowled the Caribbean and brought their plunder to Port Royal, today there are tax havens in the area where it is quick and easy to set up a shell company, a company that exists only on paper, that can hold money without putting the money in the real name of it's owner, and where little or no tax has to be paid on it.

Maybe Captain Morgan could be the patron saint of these Caribbean tax havens.