Suffering the double whammy of a depression in tourism and financial services, the Cayman Island government is going broke. The initial solution proposed by the Cayman Government was a $372 million emergency loan from local banks. Because Cayman is an "Overseas Territory" of the United Kingdom, such a loan requires approval of the home government in London. In response to the request Overseas Territories minister Chris Bryant gave Cayman a lecture on the need to raise taxes:
- To make public finances more resilient in the face of these uncertainties and to give me confidence that you will be able to service any new borrowing you will have to widen the tax base. I fear that you have no choice but to consider new taxes--perhaps payroll and property taxes such as those in [the British Virgin Islands].
Cayman is learning anew the politics of taxation. The whole episode has sparked a vigorous local debate. And it's not likely Mr. Bryant (a.k.a. "Captain Underpants") will be getting warm welcomes in Georgetown any time soon.