From the Citi to the Caymans (Jack Lew rehabilitates what Obama once called a 'tax scam.')

Wall Street Journal ^ | 02/13/2013

[SeekAndFind]

No matter how Jack Lew performs at his Senate confirmation hearing on Wednesday, his nomination to be Treasury Secretary has already produced one big winner: the Cayman Islands. The Caribbean low-tax haven is getting a political rehabilitation thanks to Mr. Lew's participation in a Cayman-based fund he invested in while working at Citigroup C +0.16% from 2006-2008.

For years Democrats have denounced the Caymans, which has no corporate income tax, as a refuge for tax cheats. In 2012 President Obama ripped Mitt Romney for investments based there. But now an Obama spokesman suggests that Mr. Lew's Caymans investment, a Citigroup fund he chose to invest in, was a model of transparency and says that "Jack Lew paid all of his taxes and reported all of the income, gains and losses from the investment on his tax returns."

Wednesday's hearing might even restore the good name of Ugland House, a small Caymans building that Democrats made famous as the legal home to thousands of businesses and investment partnerships—including Mr. Lew's. Mr. Obama has called Ugland an "outrage" and a "tax scam." Senate Finance Chairman Max Baucus, who will preside over the Lew festivities, devoted an entire hearing to Ugland House in 2008 and said that businesses maintain legal residences there for reasons that "have a lot to do with tax evasion." Tax evasion is a felony.

One might therefore expect that the appointment of an investor in an Ugland-based fund to oversee the IRS would cause Mr. Baucus to blow a gasket. But on Monday the Montana Democrat expressed his hope that Mr. Lew would be "quickly confirmed."

Sounds like Ugland and its virtual residents are now off the political hook, as Democrats acknowledge that U.S. investors like Mr. Lew are paying the U.S. taxes they owe.

[Red Badger]

‘Tax Scam’ is redundant........

[Chad N. Freud]

Can’t resist another “Seinfeld” reference:

“Did the Cayman do it, or did the Cayman do it?”
“The Cayman did it!”

Okay, carry on...