Clinton takes aim at Bermuda
US Democratic presidential hopeful Hillary Clinton has bashed Bermuda in an attack on tax loopholes.
Ms Clinton said that she planned to crack down on tax avoidance to boost the US economy.
Her official website said: “High income money managers have used loopholes related to foreign reinsurance — often located in Bermuda — to avoid paying their fair share.
“And they take advantage of complex derivatives trades to lower their tax bill.
“Clinton would build on proposals from both Democrats like President Obama and Republicans in Congress to close down these two loopholes.”
Several hedge fund managers have established Bermuda reinsurers with a primary focus on managing investments and have derived tax benefits on investment gains as a result.
The statement added that she will beef up the “Buffet rule” — coined by super-rich investor Warren Buffett — which said that those making $1 million or more a year should not pay a tax rate less than their secretary, which meant a rate of at least a 30 per cent rate.
It said: “Hillary will call for strengthening the Buffett rule by broadening the base of income subject to the rule and end the ‘Romney loophole', which allows the wealthy to shelter millions of dollars in retirement accounts.
“This means immediately closing egregious loopholes, like the Bermuda reinsurance loophole and the ‘Romney loophole' that let the most fortunate avoid paying their fair share.”
The statement added: “Unfortunately, far too often, our tax code is rigged to favour multimillionaires and billionaires who can exploit loopholes and shelter income in order to avoid paying their fair share.
“There is essentially a private tax system for the wealthiest Americans that lets them lower their tax bills by billions, while working families play by the rules and pay their fair share.”
The website said that 2013 figures showed that the 400 highest-income taxpayers — those making more than $250 million a year on average — paid an effective tax rate of just 23 per cent, in part because of tax gaming and sheltering to reduce their tax bills.
“Some multimillionaires can pay lower tax rates than their employees,” the website adds.
“Clinton believes that at a time when pay has risen far too slowly for working families, when America is underinvesting in our young people and our infrastructure, it is outrageous that the wealthiest can exploit loopholes and avoid paying their fair share.”
And the Clinton statement continued: “Hillary is committing to shutting down the private tax system for the ultra-wealthy by closing loopholes that exist today and remaining vigilant for new loopholes lawyers and accountants try to find next.
“The ultra-wealthy should not be able to exploit loopholes and leave middle-class families who play by the rules holding the bag.”