Friday, March 20, 2009

Quiz for Reagan Farr and Phil Bredesen

Q: What do Bermuda, the Cayman Islands, the Cook Islands, Guernsey, St. Kitts, Nevis and the Channel Islands all have in common?

a) Their governments saw the wisdom in turning them in to tax havens to attract outside investment.
b) You likely would have never heard of these places if they weren't tax havens.
c) Prior to gaining their status as tax havens, these places were basically third-world crapholes with few jobs and little industry.
d) After gaining status as tax havens, these places have experienced phenomenal economic growth due to the creation of jobs in the financial industry, the effects of foreign investment and an increase in tourism caused by the fact that these places are simply "nicer" to go to after the investment.
e) All of the above.

Apparently, the Department of Revenue has labeled Tennessee as the next Grand Cayman Island. Reagan Farr's report says that the family owned non-corporate entity (FONCE) tax exemption is "making Tennessee a tax haven for out-of-state, wealthy investors who want to shield their commercial property from taxes." Are they so stupid to realize that a lot of forward-thinking governments become tax havens because they WANT out-of-state investors to come to their jurisdiction to invest?

We need more tax breaks like the FONCE exemption, not fewer.

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