"Like many well-to-do Americans from that period" -- the 1980s -- "Kerry went looking for a tax shelter." This comes from John F. Kerry: The Complete Biography by the Boston Globe Reporters Who Know Him Best. According to the book, Kerry "invested between $25,000 and $30,000" in a "scheme known as a 'straddle' that involved forward contracts to buy and sell certain commodities through companies in the Cayman Islands."
The book reports that Kerry's Cayman Islands tax shelter scheme didn't pan out. An embarrassed Kerry had to abandon it with apologies. "I thought it was a way to try to minimize tax consequences," he said. "It wasn't, and I learned a hard lesson."
Kerry told the Globe that he didn't realize the tax shelter was offshore in the Cayman Islands. But the "Globe reporters who know him best" aren't buying it: "However, the pledge agreement, bearing Kerry's signature, states in the first line that Sytel Traders was organized 'under the laws of the Cayman Islands'?In the spring of 1984, weeks after he quietly pulled the plug on his own tax shelter, candidate Kerry inveighed against an unfair system. 'You need a major overhaul of the tax structure,' Kerry told a panel of reporters on a Boston television station on May 6. 'You need to close those crazy loopholes that are nonproductive.'"
Though he is no longer outsourcing his investments to the Cayman Islands, Kerry maintains a lively interest in the island. "There are enough brass-plate companies down in the Cayman Islands to make anybody sick when they look at their own tax bill," Kerry said during the Democratic primaries. "Offshore tax havens and shelters enable corporations and executives to evade an estimated $70 billion in taxes each year. How can anyone in this country suggest we have a fair system when companies can take $70 billion off the table?...It's a system only companies like Enron could love. Enron held over 800 subsidiaries in countries with no taxes on income, profits, or capital gains -- 692 in the Cayman Islands alone."
Kerry speaks often of "Benedict Arnold firms," American companies which prefer to work with foreigners than Americans. In other words, companies practicing in the economic sphere exactly what Kerry wants "multilateralist" American diplomats to pursue in the political one. If collaborating abroad is good for our domestic defense, as Kerry argues, why is it not also good for our domestic economy?
Meanwhile, Kerry's unveiling a new "pledge to restore fiscal responsibility," which means irresponsible politicians get to fleece those actually responsible for sustaining the economy. For Kerry to balance the budget and finance his prodigal programs, including his Hillary-style universal health care, he will have to raise taxes not on the rich but on his new favorite class, middle-class businessmen, many of whom run small businesses subject to the very individual income rates that Kerry seeks to hike. Kerry's pledge not to rescind tax cuts on the middle class would be a little bit more persuasive if he had voted for them in the first place. Kerry's class-warfare tax won't hurt the rich, but it will hurt the members of the middle class who depend on jobs and purchases from the rich.
Abraham Lincoln's critique of socialist tax policy -- you don't create jobs by sabotaging those who provide them -- remains valid. The authenticity of the quote attributed to Lincoln, "you don't help the poor by destroying the rich," is challenged but that Lincoln subscribed to the concept isn't. Except by the Mario Cuomos. There Cuomo was on "Larry King Live" last week, hawking his book, Why Lincoln Matters, which transforms Lincoln into a Mario Cuomo Democrat.
"Would Lincoln have been a Republican?" King asked.
"Well, you know, he was called a Republican. He was also called a Whig. So, what's a Whig? What's a Republican? What is it today?" said Cuomo. "On the economy, he invented the progressive income tax. It might have been unconstitutional at the time, but he invented it. Three percent up to a certain amount, and then five percent over that? So, he certainly wouldn't have been a Republican conservative today."
Three percent up to a certain amount, and then five percent over that? Sounds pretty good. Sounds like the sort of tax rate reduction John Kerry sought to find in the Cayman Islands.