The debate over Bermuda's image as a tax haven for US Corporations continues to rage in the US media, after several letters to the editor appeared in Sunday's New York Times.

The letters were written in response to an article that appeared on the front page of the paper on February 18 with the headline ‘US Corporations Are Using Bermuda To Slash Tax Bills'.

Following the same vein in which the article was written, letters appearing in Sunday's edition criticised US companies and the US Government for failing to stop tax avoidance.

One letter writer from Queens says: “Let our Government act to pass laws where such incorporations in foreign countries for tax avoidance purposes are stopped. Corporations doing major business in the United States should by virtue of their conduct be deemed United States companies and pay their full fair share of income taxes.”

Another letter from a New Yorker highlighted a line in the article which said: “Only the integrity of individual tax payers ensures that the taxes are paid, as is the case with any tax on capital gains.”

The letterwriter commented: “In plain English, what this means is the Internal Revenue Service has no information on the basis prices of stocks, mutual funds, homes or anything else.

“Lacking this information, it does not know (and short of an audit, cannot know) whether tax payers are correctly reporting capital gains. Would anyone care to guess how many billions this loophole is costing the Treasury every year?”

A letter written by a professor at Cleveland-Marshall College of Law examined the issue of “residency” as a basis for paying taxes and said: “...it's time to consider whether a corporation should be considered “resident” in the United States if a majority of its owners (flesh-and-blood people) are United States Citizens.

“If such an approach is deemed too complicated to administer for publicly traded corporations, residency could be established by reference to where the majority of the corporation's top officers live and work (a “headquarters” approach.)

If such legislation was enacted, this would have consequences for Bermuda as only four percent of the 11,476 international companies have a physical presence on the Island.

However, this small number of companies accounts for 82 percent of expenditure in this sector according to the recently released Archer Report on International Companies.

Another letter writer said: “The White House has taken a strong stand on cutting taxes and appears to support the right of these companies to enhance profitability by going offshore to avoid paying taxes.

“This being the case, perhaps all of us individual taxpayers should consider pressing for legislation permitting similar offshore personal tax corporations.

“Surely the White House could not oppose equal opportunity for individual tax payers.”