Bermuda is taking the most heat from the Patriot Tax discussions in the United States simply because it is more successful than other offshore jurisdictions, it was claimed in the Bermuda Senate yesterday.

While Government must have a plan for dealing with a possible change of tax policy in the US, Independent Senator Walwyn Hughes said the country must also realise that what happens is largely out of Government's control. "It is difficult to know quite what to do," Sen. Hughes said. "But there should be plans in place."

The Island has come under high profile attack in recent months with articles in major US newspapers referring to Bermuda as the "tax haven of choice" as US lawmakers band together to push "patriotism over profits" and discourage American companies from reincorporating overseas to avoid paying high US taxes on their earnings.

Legislators in both the US Senate and House of Representatives are pushing for the legislation and last month Finance Minister Eugene Cox led a three-man mission to Capitol Hill to try and counter the possible harmful policies towards Bermuda.

Sen. Hughes said yesterday while many have suggested Government needs to increase its lobbying efforts in the US, Government is facing a very difficult task.

"There is a great wave of patriotism sweeping that country," Sen. Hughes said. "If we don't behave in a way favourable to the US market, we're going to be open to criticism.

"The fact is, what is being discussed is not about Bermuda's legal system or taxes but about the US's own policy with regards to taxes on earnings outside the country."

Sen. Hughes said other offshore business centres such as The Caymans, Turks and Caicos and the British Virgin Islands have worse records for verification and compliance with international regulations than Bermuda but are also less successful and therefore appear less threatening.

"Unfortunately, because Bermuda is successful and has such a good record, it's attracting the most attention," Sen. Hughes said.

He added of other offshore centres: "Their systems and requirements do not match Bermuda's but they are also not as successful, so there is little sense in going after them."

The Finance Minister has also said Bermuda's name is being attached most often to the discussion on Patriot taxes due to the Island's high visibility.

And, he told Parliament when reporting back on the Finance Ministry's lobbying efforts, that Government has attached a "high priority" to fighting for Bermuda's position and is closely monitoring the proposed bills in the US for likelihood of passage and content.

Yesterday, Government Sen. Calvin Smith added that if the United States does adopt the Patriot Tax, the Island will need to pull together and there will be no room for partisan rivalries.

Sen. Smith said the discussions pose a serious threat, across the board, to the local community.

"We need to be putting our heads together and consulting," he explained.