Judge This Country by Its Enemies

ByEDA

Pop quiz: can you name this free-market jurisdiction in the Western Hemisphere?

Here are some of its attributes:

  • Personal income tax: NONE
  • Corporate income tax: NONE
  • Capital gains tax: NONE
  • Tax on dividends: NONE
  • Tax on interest: NONE
  • Withholding taxes: NONE
  • Payroll tax: NONE
  • Social security tax: NONE
  • Wealth tax: NONE
  • Inheritance tax: NONE
  • Gift tax: NONE
  • Annual property tax: NONE
  • Sales tax: NONE
  • VAT / GST: NONE

Compared to the suffocating levels of taxation in the US, Canada, Europe, and elsewhere, calling the above “a breath of fresh air” would be a major understatement.

Now, only a handful of jurisdictions in the Western Hemisphere do not levy property taxes—so that should narrow the field. The mere existence of property taxes is a ridiculous notion that should offend anyone who actually respects property rights.

If you guessed the Cayman Islands, you’d be correct.

However, there is one absolutely crucial feature that distinguishes the Cayman Islands from other low-tax jurisdictions: a culture and history that is vehemently opposed to direct taxation—something that has never existed in Cayman.

Over the years, every proposal that carried even the faintest whiff of possibly leading to direct taxation has been run out of town—along with the foolish politicians who dared to sponsor it. It’s proven to be a highly effective deterrent.

This dynamic is reinforced by the fact that Cayman is a small place where everybody—including the politicians—knows each other. The political system is, in that sense, very personal. Legislators go to the same restaurants and live in the same neighborhoods as their constituents—they cannot easily hide. This sort of personal accountability is impossible in large countries, and it helps keep Caymanian politicians firmly in check.

Give an Inch and They’ll Take a Mile

The aversion to even the concept of direct taxation in Cayman is extremely important. Because once the principle is conceded—and you give politicians an inch—it’s only a matter of time before they’ll take a mile.

You’ll recall that when the federal income tax was introduced in the US in 1913, those making up to $20,000 were taxed at only 1%. That may sound trivial, but in today’s dollars that income level equates to roughly $662,000.

The top bracket kicked in at $500,000—which is about $16.5 million in today’s debased dollars—and even then the tax rate was just 7%.

Of course, once the principle was conceded in 1913, the politicians naturally couldn’t resist ramping it up, eventually creating the monstrosity the US has today—a tax system most Americans thoughtlessly accept as “normal.”

In my view, it’s Cayman’s unique culture and history—a culture fundamentally opposed to the very idea of direct taxation—that is the best guarantor it will continue to be a beacon of light well into the future.

Judge Me by My Enemies

But not everyone is as thrilled about the Caymanians’ love for low taxes as I am.

Spendthrift politicians the world over have long despised Cayman—something that should, in my view, be worn as a badge of honor.

Why? Because productive people and companies naturally gravitate to places where they’re treated best. And it’s hard to find a jurisdiction that treats you better in terms of taxation than Cayman. This healthy dynamic is called tax competition.

Naturally, politicians in countries with uncompetitive tax policies don’t like this. It means fewer productive people left to fleece, which puts a limit on their wasteful spending.

Consequently, Cayman has long been pressured. A prominent Caymanian professional once told me how the US government used to fax over laws to the Cayman government and demand they adopt them. Imagine China arrogantly faxing a new law to the US Congress and ordering them to pass it—that’s how the Caymanians felt.

Fortunately, these tactics never really worked. If anything, they made Cayman stronger. The jurisdiction is now battle-hardened and knows exactly how to handle pressure.

Another method of attack has been demonization in the media and popular culture—painting Cayman as some sort of shady offshore financial center.

Of course, the people who push this narrative never mention that New York and London are among the biggest hubs for financial law-breaking on the planet. Cayman, by comparison, is squeaky clean, with tight rules that protect its well-earned reputation as a professional and reputable place to do business.

What this all means is that the popular (mis)conception of Cayman as some sort of illicit jurisdiction is nothing more than propaganda from proponents of big government.

The reality is that Cayman is a highly sophisticated and professional financial center, distinguished by its unique history and a culture firmly opposed to direct taxation. For anyone seeking to maximize personal freedom and financial opportunity, Cayman checks a lot of boxes.

If we judge Cayman by its enemies, I’d say it’s a wonderful place.

How Cayman—and Your Gold—Fit Into a Serious Plan B

The same political class that attacks low-tax jurisdictions will have no qualms about coming after your bank account, your retirement, and even your gold when the next crisis hits.

That’s why it’s essential to get practical, actionable strategies in place before the next wave of inflation, capital controls, and financial repression. Fortunately, my friend and legendary speculator Doug Casey has put together a timely, free video—Doug Casey Reveals the Best Way to Store Your Gold—that shows you exactly how to do that.

In this exclusive video, Doug reveals what he believes is the best way to store your gold so you can protect your savings from inflation, bank failures, capital controls, and the next confiscation scheme politicians dream up.

Even better, the video features a special guest from the Cayman Islands who explains how Cayman fits into a robust Plan B—why its unique culture, legal structure, and zero-tax environment make it one of the most compelling jurisdictions on the planet for safeguarding wealth and personal freedom.

If you want to keep what you’ve earned—and stay one step ahead of the people who’d like to separate you from it—this is something you need to see. Click here to get access to the free video now. 

The post Judge This Country by Its Enemies appeared first on Doug Casey’s International Man.

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