Like that's any surprise.....
Democrats Revisit the Caymans
After giving Jack Lew a pass, Senators return to tax-haven outrage.
Jan. 20, 2017 7:06 p.m. ET
Treasury Secretary nominee, Steven Mnuchin, testifies during his Senate Finance committee confirmation hearing on Capitol Hill, Jan. 19. Photo: Getty Images
When Bob Menendez confronted Steve Mnuchin during Thursday’s Senate Finance Committee hearing over the latter’s role as director of a fund registered in the Cayman Islands, it was meant to be a gotcha moment. “We have to decide whether that’s necessarily what we want as leadership,” thumped the Democrat from New Jersey.
Mr. Menendez’s passion got us thinking. Could we recall any precedent for confirming a nominee for Treasury Secretary who had investments in this Caribbean tax haven?
Turns out we can. It’s the man Mr. Mnuchin would succeed as Secretary, Jack Lew.
It gets better. Mr. Mnuchin served as director of Dune Capital, an investment firm he said he registered in the Caymans primarily to “accommodate nonprofits and pensions that want to invest through these off-shore entities.” By contrast, Mr. Lew was personally invested in the Citigroup Venture Capital International Growth Partnership II.
You know, like that evil profiteer Mitt Romney, the subject of a now infamous Barack Obama campaign ad scoring Mr. Romney for profiting from money in offshore havens such as the Caymans. Mr. Lew’s Cayman company even used the same Ugland House building in the Caymans that President Obama so famously trashed as an “outrage” and “tax scam.”
None of this stopped Mr. Lew from being confirmed by some of the same Democratic Senators—Mr. Menendez, Debbie Stabenow,Bill Nelson,Ron Wyden—who suddenly claim to find Mr. Munchin’s Cayman connection troubling. Committee Chairman Orrin Hatch noted as much when he pointed out that two people in President Obama’s cabinet (including Mr. Lew) had Cayman holdings.
The Democratic goal at the hearings seemed to be to get Mr. Mnuchin to admit that investors go to the Caymans to avoid American taxes. Mr. Munchin denied it but needn’t have been so shy. The Caymans have no corporate tax rate. The way to deal with the Caymans is not to punish investors who go there but to get rid of the regulations and high tax rates that send capital offshore.
Mr. Lew had a chance to make that happen as Treasury Secretary if he had been serious about corporate tax reform. House Republicans were eager to cut a deal that would end corporate “inversions” that send U.S. companies overseas. But Mr. Lew and Senate Democrats insisted on terms, including a still-high tax rate, that weren’t worth the bargain. He now leaves town with little to show beyond stagnant wages for his four years at Treasury.
As for Senate Democrats, they’ll now get another chance to show if they’re serious about ending the appeal of tax havens like the Caymans. President Trump and Republicans are making tax reform a priority, and they’d like to make the deal bipartisan. Want to place a bet on whether Democrats vote for it?
Democrats Revisit the Caymans
After giving Jack Lew a pass, Senators return to tax-haven outrage.
Jan. 20, 2017 7:06 p.m. ET
Treasury Secretary nominee, Steven Mnuchin, testifies during his Senate Finance committee confirmation hearing on Capitol Hill, Jan. 19. Photo: Getty Images
When Bob Menendez confronted Steve Mnuchin during Thursday’s Senate Finance Committee hearing over the latter’s role as director of a fund registered in the Cayman Islands, it was meant to be a gotcha moment. “We have to decide whether that’s necessarily what we want as leadership,” thumped the Democrat from New Jersey.
Mr. Menendez’s passion got us thinking. Could we recall any precedent for confirming a nominee for Treasury Secretary who had investments in this Caribbean tax haven?
Turns out we can. It’s the man Mr. Mnuchin would succeed as Secretary, Jack Lew.
It gets better. Mr. Mnuchin served as director of Dune Capital, an investment firm he said he registered in the Caymans primarily to “accommodate nonprofits and pensions that want to invest through these off-shore entities.” By contrast, Mr. Lew was personally invested in the Citigroup Venture Capital International Growth Partnership II.
You know, like that evil profiteer Mitt Romney, the subject of a now infamous Barack Obama campaign ad scoring Mr. Romney for profiting from money in offshore havens such as the Caymans. Mr. Lew’s Cayman company even used the same Ugland House building in the Caymans that President Obama so famously trashed as an “outrage” and “tax scam.”
None of this stopped Mr. Lew from being confirmed by some of the same Democratic Senators—Mr. Menendez, Debbie Stabenow,Bill Nelson,Ron Wyden—who suddenly claim to find Mr. Munchin’s Cayman connection troubling. Committee Chairman Orrin Hatch noted as much when he pointed out that two people in President Obama’s cabinet (including Mr. Lew) had Cayman holdings.
The Democratic goal at the hearings seemed to be to get Mr. Mnuchin to admit that investors go to the Caymans to avoid American taxes. Mr. Munchin denied it but needn’t have been so shy. The Caymans have no corporate tax rate. The way to deal with the Caymans is not to punish investors who go there but to get rid of the regulations and high tax rates that send capital offshore.
Mr. Lew had a chance to make that happen as Treasury Secretary if he had been serious about corporate tax reform. House Republicans were eager to cut a deal that would end corporate “inversions” that send U.S. companies overseas. But Mr. Lew and Senate Democrats insisted on terms, including a still-high tax rate, that weren’t worth the bargain. He now leaves town with little to show beyond stagnant wages for his four years at Treasury.
As for Senate Democrats, they’ll now get another chance to show if they’re serious about ending the appeal of tax havens like the Caymans. President Trump and Republicans are making tax reform a priority, and they’d like to make the deal bipartisan. Want to place a bet on whether Democrats vote for it?
