An American right-wing economist has come out with guns blazing in support of Bermuda and slamming presidential hopeful Senator John Kerry for his anti-Bermuda rhetoric.

Daniel Mitchell, the Washington-based Heritage Foundation's chief expert on tax policy and the economy, questioned whether the Bermuda-bashing will have real long lasting effect - and said an election of Kerry could negatively impact on the Island's reinsurance industry.

“America's number one enemy isn't al Qaeda, Libya, North Korea, or Cuba. It's Bermuda,” he said. “At least that is what Senator John Kerry of Massachusetts would like American voters to believe. At almost every campaign stop, he maliciously attacks “Benedict Arnold corporations” who move to Bermuda. The insinuation, of course, is that Bermuda is some sort of predatory regime that provides refuge to scoundrels.”

Mr. Mitchell publicly advocates supply-side tax cuts and fundamental tax reform and is a leading opponent of tax harmonisation schemes developed by the European Union, the Organisation for Economic Co-operation and Development (OECD), and the United Nations.

Founded in 1973, The Heritage Foundation is a right-wing think tank. It is a research and educational institute whose mission is to formulate and promote conservative public policies based on the principles of free enterprise, limited government, individual freedom, traditional American values, and a strong national defence.

During his opinion piece, which runs in full on tomorrow's Page 4 of The Royal Gazette, Mr. Mitchell refers Kerry's “irresponsible charges” adding that it was difficult to decide what is most “objectionable” about Kerry's words, “his deliberate smear of a friendly regime or his reckless disregard for accuracy”.

He adds: “The denigration or Bermuda is certainly reprehensible, particularly since the territory's market-based tax policy and race relations are both much better than can be found in the United States. And for what it's worth, Bermuda also has much more onerous anti-money laundering laws than America, thus disproving Kerry's snide attempt to imply criminality.”

Mr. Mitchell, who visited Bermuda in December 2002 as a guest of Bermuda International Business Association for their annual general meeting as one of two right-wing anti-tax lobbyists, said that Kerry's inability to understand the issues was also troubling.

“ It appears that he does not comprehend US tax law, which certainly fits with his reputation in the Senate as a legislative lightweight. But more disturbing is the fact that both he and his campaign staff make obvious errors with the simplest facts,” he said.

And Mr. Mitchell points out that Kerry confuses “outsourcing” with “inversions.” Outsourcing occurs when a company purchases labour services in another country.

He said inversion is when a company re-charters in another jurisdiction, adding that while it is correct to say that outsourcing “moves jobs offshore,” this has nothing to do with the inversion issue.

“Inversions take place because America's worldwide tax system and high corporate tax rate make it very difficult for US-chartered companies to compete with foreign-chartered companies, most of which come from nations with lower tax rates and territorial tax regimes,” he said.

He labelled said Kerry's rhetoric as “shameful” and his command of facts as “suspect”.

But he questioned what would happen in elected.

“Nobody knows for sure, but he may decide to never mention Bermuda again. Many politicians use certain issues only as convenient props during an election, so this optimistic assessment is not unrealistic,” he said.

“But there also is a pessimistic scenario. Kerry's website specifically states that, “…inverters should not get government contracts or any other perks or incentives from the government.”

“It is quite likely that this type of protectionism could become very prevalent under a Kerry Administration. Bermuda's reinsurance industry also could face discriminatory treatment.

“Kerry already has endorsed big tax increases, and there is pre-existing legislation in Congress to impose special new taxes on companies that purchase reinsurance through Bermuda-based companies. This is the same Bermuda reinsurance industry, incidentally, that came to New York's rescue after the World Trade Center disaster, paying its claims while US insurance companies often resisted payment, sometimes even going to court in an effort to avoid their responsibilities.”