Chart of the Day
Thomas Oatley is an is an associate professor of political science at the University of North Carolina, Chapel Hill. He wrote an article in the Washington Post. Oatley made this chart that shows the flow of American investment money heading to the tax haven of the Cayman Islands. President Barack Obama signed the Foreign Account Tax Compliance Act (FATCA) into law in 2010. The United States and the Cayman Islands reached an agreement. Cayman banks must notify the IRA of any U.S. account with more than $50,000. The law won't officially take effect until 2014.
Banks, funds and other financial institutions that fail to comply with FATCA face a 30-percent withholding tax on their U.S. source income, a penalty that could effectively freeze them out of U.S. financial markets.Investment bankers have an army of tax attorneys. I'm sure they will find a way around FATCA.