Customer Reviews

Offshore: The Dark Side of the Global Economy

5 star:		(3)
4 star:		(2)
3 star:		(2)
2 star:		(3)
1 star:		(1)

 

 

Brittain-Catlin begins by observing that the Cayman Islands are the 5th largest banking center in the world, with over $700 billion in assets.

These assets, however, are largely not physically held on the island - simply notations in accounting books for the purposes of reducing or eliminating taxes. Corporations taking advantage of this include GM, ExxonMobil, Ford, IBM, Wal-Mart, G.E. (reduced its 27% '99 tax rate to 16% in '03), Citigroup (saved $778 million in '03 taxes), Apple, Enron, Halliburton, Tyco, Global Crossing, Long Term Capital Management, Global Crossing, and Enron.

"Transfer-pricing" manipulation is the main tax-avoidance mechanism afforded by offshoring. This involves corporations maximizing overseas production profits in a non-taxable offshore subsidiary.

Unfortunately, Brittain-Catlin seeming dwells forever on his basic facts, and even spends considerable time exploring the philosophy of Kant. (I tried reading Kant long ago - Brittain-Catlin's version was no more interesting.)

Several years ago I saw Mr. Brittain-Catlin on Charlie Rose and was intrigued enough with the interview to buy his book.

I have to assume that he has presented a factual depiction of how offshore banking works, the extent of it use, and its ramification in the the global economy.

However, his presentation was so wordy, scattered, and often times boring that I found it sheer drudgery to read. I cannot believe it was edited very carefully.

One well written part of the book is his description of how Enron used offshore accounts to hide its losses. Very informative.

It's a shame this book isn't better written and edited. Offshore banking is a compelling subject.

Published in 2005, William Brittain-Catlin nevertheless had the foresight to challenge the received wisdom of his day: 'In both the neoliberal and reformist positions there is a strong element of naive idealism: in the former that a world of unrestrained economic liberalism would not bring about such catastrophe that the state would need to step in and sort out the mess'. Although we are indeed living in such a time, this is still an excellent analysis of how we got to where we are, mixing case studies, history and philosophy in a highly intelligent way

"Offshore" focuses on Cayman and it's major role in offshore finances.

Mr. Brittain-Catlin does a good job of explaining how corporations are viewed on the island in relation to individual citizens. Transfer Pricing is also defined. The biggest lure to Cayman for businesses was to evade taxes in their home country.

The author also examines Delaware as another popular base for multinational holding companies and subsidiaries.

Their was a memorable quote from Willaim Greider on the subject of the S&L bailout of the past- "The government's regulatory system was perversely diverted to a different purpose-'socializing' the losses accumulating by freewheeling bankers and developers by making every taxpayer pay for them." The same scenario as the Wall Street bailout of this year, bailout financial institutions with working peoples' taxes.

The saving of LTCM is a similar story that the author brought up.

One gem from the author was found on page 172 while discussing acclaimed "economic growth".

"That economic growth had been brought about by letting corporations out of their obligation to pay taxes on their earnings. That growth was, in effect, their taxes, simply retained as profits and parked offshore."

This book had some meaningful information as a result of research done by the author.

What detracts from an otherwise very good book is the author's foray into mytholgy and related characters. It grew old for me personally.

This is one of the most poorly written books I have ever read. It seems to be a compilation of news clips, some history, with pages and pages of endless, obstruse, mind-numbing attempts to tie corporations, offshore banking centers and governments into some sort of socialogical, philosophical analysis. Totally boring, informationally just about useless, wordy, diffuse, and a true waste of money and time....even a one star rating is too much....if you want to learn about offshore...don't try it here.....

Offshore is a solid attempt to explain the fact that modern capitalism has become dependant upon the offshore, largely unregulated, international financial system. The cost of making tax-rate shopping a profit center in a corporation's strategic plan when revenues land back 'onshore' is paid by all of us. Essentially multi-nationals are competing to see who can pay the least tax. In the end, this behavior is to an economy what eating your seed corn is to farming. Brittain-Catlin is sounding an alarm hoping public policy makers and the public will heed.

The author's prose is sometimes purple and his discursions into tangental topics is somewhat distracting, but on the whole, the book is worth reading for the very approachable manner in which it explains the history of offshore banking and how it ties into subjects such as BCCI, terrorism finance, drug money laundering, the 'private' bail out of the hedge fund LTCM, the capital flight that hammered Indonesia and other developing nations, and the collapse or corruption of companies such as Eron, Tyco, and Global Crossing.

After reading this book, the business news achormen chattering about the 'mood' of international capital will begin to make some sense to you.

"Offshore" is a compelling and disturbing glimpse into the dark underworld of global money and power. It is extremely well-researched and comprehensive, covering international dirty-dealing and capital from Enron to Parmalat to LTCM. Very illustrative and thought-provoking.

A first-rate primer on International Capital and also a great read. Pay special attention to the segments on "the secret realm," where capital is free of all national identity and boundaries.

In addition the writing is very fluid, clever and witty. An important book.

My criteria for a book is simple. I want an interesting subject, I want good writing, and I dont want any wacko-eruptions where the author forgets to take his meds and strange things spill out.

That said, this book is a pretty good primer about how major corporations avoid paying taxes while getting the full benefits and protection of the American government.

I mean, if the current warlord of Lower Slobovia confiscates EXXON's oil wells there, will the Cayman Marines invade Lower Slobovia to get the oil back? Not likely. American Marines will. Marines paid for by middle-class taxpayers like you. The rich dont pay taxes, either; nor do they join the Marines. They go to Washington and make laws that enrich themselves and the multinational corporations who pay no taxes.

Excellent book on the subject!

There's interesting information here, about the role offshore tax havens play in our global economy; much of it is quite revealing, as we learn about the Cayman islands, and what corporations do in order to avoid paying taxes. The author gets pretentious, though (and nearly unreadable) when trying to put a philosophical spin on things... there is a long chapter on that which is simply indigestible, and the interpretations are so forced as to be laughable. If you can overlook that, though (just skip those parts) you'll get some interesting tidbits of information about the way corporations operate.

This is kind of two books in one.

On the one hand there is an explanation of how corporations basically avoid taxes by setting up perfectly legal tax shelters around the world.

The second part of the book is rather philosophical in tone, emphasizing the point of view that somehow these corporations shouldn't be doing this.

Way back when the Beatles were popular, I remember being surprised when I heard that they were really employees of a corporation set up offshore somewhere. The taxes in England at the time were something like 90%. Hey, it made good sense.

As I grew older I learned more about taxes, usually by having to pay them. But I also learned that there are limits to taxes at which it is more beneficial to find a way to not pay them than it is to make more money. Of course you want to stay on the legal side of the boundry, because jail is not a good thing -- ask Martha Stewart. Of course if she had done her stock trading with an account in Vanuatu or some place like that she almost certainly wouldn't have done jail time.

This book talks about what companies do to reduce their tax burden. And it's a pretty good primer on how to do it. His philosophical point of view is another matter. He seems to feel that there is something basically imporal about this. Be assured though, that the politicians and the tax authorities know all about this. Knowing that this will happen, they simply raise taxes a few percent.