Proposed changes to US tax laws put forward by senior members of the Democratic Party are likely to feature high on the agenda of Premier Ewart Brown and Finance Minister Paula Cox when they meet US lawmakers in Washington this week.

At a Cabinet Office press conference yesterday, neither politician was giving much away when it came to likely topics of conversation. But the threat of new tax legislation that could impact on the Island's international business sector has become more real since the Democratic Party seized control of both the House of Representatives and the US Senate in mid-term elections.

US Presidential hopeful Barack Obama, for example was one of three Senators who proposed legislation that seeks to recover an estimated $100 billion a year in tax revenue claimed to have been lost to overseas tax havens.

Sen. Obama mentioned Bermuda when he spoke on the Stop Tax Haven Abuse Act in February this year. The bill proposed that income from a trust or corporation set up by Americans in a low-tax jurisdiction should be taxed as US income.

"This bill provides an initial list of offshore secrecy jurisdictions where these evidentiary presumptions will apply," Sen. Obama said. "Taxpayers with foreign financial accounts in Anguilla, Bermuda, the Cayman Islands or Dominica, for example, should be prepared to report their accounts to the Internal Revenue Service."

In April, more senior Democrats were proposing a severe clampdown on what they see as tax avoidance.

Senator Byron Dorgan, a North Dakota Democrat, wants to raise $15 billion over the next decade by defining US business operations in more than 30 foreign tax havens as domestic operations. "We ought to shut that scam down," said Dorgan, 64.

That message echoes the tone of John Kerry, who used Bermuda as a watchword for offshore tax havens during the last US presidential campaign.

The Bermuda Government has stepped up its lobbying efforts on Capitol Hill since Mr. Kerry's "Bermuda bashing", with Minister Cox determined to differentiate Bermuda from more loosely-regulated jurisdictions. "Bermuda is not a brass-plate jurisdiction" is a phrase she has repeatedly used this year.

Most of Bermuda's insurance and reinsurance companies do the majority of their business in the US and uncertainty over how any changes in US tax laws would affect them has been spreading since the Democrats' election victory. The question was raised by institutional investors in several companies' first-quarter earnings conference calls.

Without mentioning the word "tax", Dr. Brown and Minister Cox yesterday hinted that they would be touching on the issue when they meet the likes of House Ways and Mean Committee chairman and New York Democratic Congressman Charles Rangel.

"We are very fortunate to have friends like Congressman Rangel, who will do everything to make sure that our economy is not adversely affected by decisions made by the United States," the Premier said.

"We'll be talking about our legislative framework and Bermuda's reputation for being a pristine regulatory environment for international business." Dr. Brown added that it was important that Bermuda did not get "lumped in" with other jurisdictions.

Minister Cox said: "There are a number of issues on the burner at the moment and it's our job to make sure we do everything we can to make sure that Bermuda's position is not unduly prejudiced."

The Bermuda delegation leaves today and their whirlwind 48-hour trip will entail 25 meetings with influential figures, including Secretary of State Condoleeza Rice.

The trip is the second such visit, facilitated by US Consul General Gregory Slayton.

Mr. Slayton pointed out that the Bermuda insurance market had paid out more than $23 billion in claims since the 9-11 terror attacks and not all US lawmakers realised the importance of the Island to the US as an provider of insurance.

"This is why it is so important that meetings like this take place," Mr. Slayton said. "The purpose of the trip is to provide better information to decision-makers.

"We'll be meeting very important members of both parties and it will help everyone to understand the facts."