Log In

Reset Password
BERMUDA | RSS PODCAST

The horror of Uncle Sam's taxation policies

Got back to Bermuda earlier this week, just in time to attend an insurance conference, so I haven't had much of a chance to prepare anything for you. Luckily, some readers commented on last week's piece about how long people may stay in the UK or US before running into tax problems, so I'll address those.

First, though, a word of praise for the Fairmont Hamilton Princess, where PricewaterhouseCoopers and Standard & Poor's held their third annual insurance conference this week. Among the stars of the show was Brian Duperreault, one of the greatest of all the Bermudians.

The second day of the conference began at some ungodly hour, so I chose to spend a couple of nights at the Ham P., as we call it in the trade. I was lucky enough to be billeted in the new Bermudiana Wing, the old Bay Wing, which has been completely refurbished. Man, did they do a good job. It's a Bermudian experience, but it's brand spanking new. (No spanking was involved, more's the pity). Full marks to the Fairmont. You should try it some time.

* * *

In the column on tax, I didn't mention that US citizens pay tax wherever they live, as a reader reminded me.

"I just thought it might be worth clarifying that US citizens ALREADY pay federal income tax on their worldwide income, irrespective of their residence," the reader wrote. "In most jurisdictions, there is a local income tax which is offset against the US income tax. However, in Bermuda, the consumption tax has no offsetting benefit for US taxpayers.

"What you refer to is the ability of expats to qualify for a deduction of roughly $80,000 (from) their eligibility for payroll and state taxes. Expats could put all of those fairly small tax benefits at risk were they to spend too much time in the US."

I didn't mention it because I didn't want to remind our American friends of the horror of Uncle Sam's taxation policy. Wouldn't be nice, would it?

* * *

A Canadian fellow I know accosted me late in the week to complain that I had not included the Canadian rules in the article. Guilty as charged. The reason I left them out is that I don't have the faintest idea what the Canadian tax rules are. I sort of assumed that you paid whatever you felt like.

My friend has one of the finest legal minds ever to come out of Canada, and he promptly disabused me of that notion, but he doesn't know what the rules are either. I promised him I would research the matter and report back in this column, which I will do as soon as I can. If you know the rules, would you save me the effort, and e-mail them to me (crombie@northrock.bm)? I'll pass them on to a waiting world, or at least a waiting attorney.

In the interim, a short story to illustrate my deep respect for Canadians. If I've told you before, my apologies. You know the phrase, "As American as apple pie"? Well, a radio station held a contest to ask people to complete the phrase, "As Canadian as ...". The winning entry was "As Canadian as possible, under the circumstances."

* * *

And finally, a story having nothing to do with anything, but which I'm bursting to tell someone. Unfortunately, I don't know anyone, so I'm going to tell you.

I had dinner last week with Alastair Campbell, Tony Blair's spin doctor. It was at an Xchanging insurance conference in Brighton, England, where they were so hard up for speakers that they put me on a panel to tell everyone how great Bermuda is.

I'm not a fan of Mr. Blair's, to put it mildly, and I was really ready to hate Mr. Campbell. In that I was a guest, I had decided to behave myself and not tell the evil so-and-so what I thought of him. So I was relieved when I was seated half a table away from him. Soon after his arrival, though, we all had to change seats and I wound up sitting next to him.

For reasons I have never understood, I have a reputation as a hothead. I knew that the pressure of having to be nice for hours would tell on me, and I'd probably snap and there'd be a fistfight and it would be in all the papers. But, you know, what can you do?

It turned out that, one-on-one, he's a decent sort. It gets worse. We hit it off. In many ways, we're the same person, only everyone hates him, whereas only the people who know me hate me. It just goes to show that preconceptions can lead you astray, so we'll call that this week's lesson.

Mr. Campbell was the after-dinner speaker. Just before he went onstage, he offered three of us the chance to choose a word that he would weave into his speech, just for the fun of it. The lady who had invited me to the conference, who's a bit of a card, chose a truly dirty word, one of the few remaining words that are not widely used, or in fact ever used, in polite company. The fellow sitting next to me, from the broking firm Willis, a bit non-plussed, chose "scissors". Feeling sorry for my new friend, I chose "trousers".

Mr. Campbell then delivered a very amusing and interesting speech. At one point he explained how public people are rarely granted privacy, recalling how on one occasion, he had been in the gents when someone assailed him to argue about politics. "I did up the fly on my trousers," he said, and that was one word down.

Later, in a story about Mr. Blair opening a new shopping mall, Mr. Campbell said: "Tony did the scissors thing", and that was two. That left only the rude word, and I was dreading what would happen when he said it.

Mr. Campbell completed his remarks without saying the word, paused, and then said: "Oh, I haven't quite finished. I was asked to say something ...". He looked down at our host who was frantically gesticulating to the effect that she would rather he not say the word after all. The Prince of Darkness had called her bluff. It was a very funny moment.

The only worrying thing about all of this is that I must be going soft. Fancy me liking Alastair Campbell. And he's not even Canadian.