About three months ago, a major entertainment event took place locally. Four internationally famous acts, such as the Rolling Stones, The Beach Boys, Hootie and the Blow Fish and comedian/commentator Dennis Miller, recently of HBO fame, performed here. They shared the same stage and played on the same night. Strange you say, you never heard of it. Well that's because you weren't supposed to.

The event, a private party held in Tuckers Town for a specially flown in audience of 200, was not open to the general public. Estimates vary, but it is generally conceded that the host, a Bermuda resident, must have paid at least $5 million to $10 million to stage this almost Ancient Roman like extravaganza.

That's the type of money that is now rolling about in our little Island. One could therefore forgive the old money Bermudian shareholders of the Bank of Bermuda for feeling rather impoverished by comparison, with the largely foreign held new money that much like the longtail, has landed here over the last ten years. Remember poverty is relative. Smith's and Triminghams have now given way to ACE and XL. Maybe the sale of the Bank of Bermuda, will allow them to redress this perceived imbalance ever so slightly. Even the rich get inferiority complexes after all.

As previously mentioned, the sale of the Bank of Bermuda to HSBC does powerfully signify that the era of the city state is almost here. One insurance company that will remain nameless earns on average one to two million dollars per day ...yes, per day. In an environment such as this, an ARV of $126,000 per month ($1,260,000 to $1,512,000 per annum) which is the threshold imposed on foreigners from buying Bermuda property, can only be considered a joke of the cruellest kind.

One could make the argument ? as the above writer has ? that 20 years ago it was prudent and wise for our Government, in order to spur the growth in our off shore business sector, to create an environment that was characterised by a light regulatory framework and one that saw little in the way of direct taxation of the companies, that were establishing themselves in Bermuda. In effect, these companies ? mainly insurance companies ? were in incubation. Thus the promise periodically reaffirmed of a tax holiday on corporate profits.

One could also make the argument quite convincingly now that the conditions that created that environment have changed and the companies in question are no longer little pups in incubation but fully grown global pitbull terriers, consuming just about all before them. I know that the above is a little cute by half, yet nevertheless it does need to be stated that with the advent of the sale of the Bank of Bermuda to HSBC, I too must join the chorus, by stating that the time has now come to look at our tax regime, with the aim of making changes to ensure simple fairness and equity.

Furthermore, I don't think that if we did adopt an approach in the manner that I will suggest of imposing no more than a one-percent corporate income tax in the first year, which then would culminate at two to two and half percent by year five or six, that these companies would be totally adverse to accepting it.

Perhaps the following will help me to make my point. Just before the election, there was a major discussion over the proposed term limits that had been adopted by our government. I'm not going to rehash the debate here except to say, that the various threats that were bandied about suggesting that some of the major off shore players would get up and leave if the government didn't back down, were viewed from my vantage point as being largely bogus and without merit. A simple negotiating ploy, no more and no less.

What was instructive throughout the whole somewhat sordid mess was that the Republic of Ireland was being touted as the potential beneficiary of this alleged error on our part. The implication being, that unless the powers that be backed down and assumed their usual prone position, we would be unceremoniously dumped back to the stone age or at least back to an era that would see a return of farming or fishing, as our chief economic activity.

Unbeknown to many however, was that Ireland the only offshore territory mentioned as a possible alternative was also one that taxes companies such as those which comprise our offshore International business sector to the tune of 12 percent. All of which would come directly off of their bottom lines. Ireland also takes a moderate bite out personal income as well.

As of 2003, only Cayman and ourselves of all the major off shore players do not tax corporate income in one way or another. But let's face it, Cayman for various reasons is not in our league and that is why you didn't hear the rallying cry of "We'd go to Cayman in a heartbeat" a few months ago. Even a one to two percent tax would still leave us vastly more competitive than Ireland. Ten to eleven tax points better in fact. And know one is suggesting that we-unlike Ireland-tax personal income as well.

Add our superb infrastructure, relatively great climate and geographically unassailable proximity to the major markets and you have to acknowledge that Bermuda is pretty hard to beat. They know this; they just don't want you to know this. It's time to put away the begging bowl and start acting like adults on this issue.

The benefits: One; tied in with a significant reduction and even elimination of most duties including stamp duties, real reductions in the size of the payroll tax etc...would powerfully reduce the cost of living in Bermuda and thus reduce the cost of doing business on island for both the International Business community and ourselves. This will also, as noted at the recent forum on tourism, allow our tourism product to become more competitive by reducing the costs of goods and services on Island.

Two; it would ameliorate rising social tensions as a result of the high cost of living on island (housing comes readily to mind) driven as it has been by the rise of International Business and related activity and by the regressive and inefficient tax regime of our Government.

Three; it would lead to a more equitable sharing of the tax burden which now falls disproportionately on lower and middle income groups and small to mid sized Bermudian businesses.

Four; it will produce significantly more tax revenue for our Government. Enabling it to pay for the necessary services, that are increasingly being demanded by a somewhat beleaguered population and the International Business Community. Moreover, it would position International Business not just as a barely tolerated member of the Bermudian family, but one which will be valued by a growing majority of the country's population, who will begin to see the international community in ways that posits this sector as being part of the solution, and not, rightly or wrongly, part of the problem.

And finally, it would place Bermuda in a fiscal and economic position that will further strengthen our ability to make Independence a successful option for Bermuda.

One of the key factors that has undermined many of the newly formed Independent Nations, which have emerged over the last thirty years, has been the distinct vulnerabilities inherent in most of their economies.

Bermuda, on the other hand would enter the ranks of Independent Nations firmly ensconced near the top of the Global Economic food chain, as a major player in the global economy and one that while rooted in the western world, would be open to all. But first we need to deal with the issues addressed above, in order to ensure that all the relevant stakeholders are on board and rowing in the same direction. And if the HSBC deal brings us closer to the type of reform that I have suggested here, then the deal would have been well worth it.