Monday, February 11, 2019
Cubazuela
A column of mine on the Administration's approach to Venezuela and Cuba, and Cuba's options.
Monday, January 21, 2019
Why Radio/TV Marti is a joke
How is the U.S.
government broadcast to Cuba covering the announcement about Title III of the
Helms-Burton law?
In this
story, TV Marti reporter Tomas Regalado explains the State Department
statement and presents some reaction: from Congressman Mario Diaz-Balart, from Miami
radio powerhouse Ninoska Perez, and from a guy who would like to file a lawsuit
based on his property claim. Regalado did not indicate that alternative points
of view exist, much less say what they are or show anyone espousing them.
On the evening
newscast, they brought out reporter Pablo Alfonso to explain the news, and
in addition to explaining the issue of lawsuits, he proceeded to describe an
aspect of the legislation that doesn’t exist. He said that Title III “prohibits
subsidiaries of foreign businesses, who have subsidiaries in the United States,
from doing business with Cuba” (see 3:00). That is nonsense, but it’s not hard
to guess why he said it. Someone probably told him, accurately, that the desired effect of the law is to induce
companies doing business here to stop doing business there. Rather than doing
actual reporting, it appears he went with that and garbled it. (Note also at
4:25 that after referring to the Cuban “government” he quickly corrects himself
and says “regime.”)
On the Radio/TV
Marti website, there’s a story
about Congressman Mario Diaz-Balart supporting the implementation of Title III,
and another
about dissidents in Cuba with the same point of view.
This is not the
first time Radio/TV Marti covers a story by providing information and a single
point of view, as if it aspires to be a mirror image of Granma. You get the
impression that if you were to read the Voice of America’s charter to it
management (VOA represents “America, not any single segment of
American society,” and presents “a balanced and comprehensive projection of
significant American thought and institutions”), they would look at you as if
you were speaking Chinese.
Obviously the funding for Radio/TV Marti will go on forever,
so I repeat my suggestion: call it Radio Exilio and spare Marti and the rest of
us with any association with it.
More on Title III
It
appears likely from the State Department’s announcement
that Title III of the Helms-Burton law will be allowed to go into effect around
March 1. No U.S. President has permitted this: Since enactment in 1996,
Clinton, Bush, Obama, and Trump have blocked it every six months.
As
a result, those whose properties in Cuba were expropriated and who can identify
a foreign business connected to that property, can sue the foreign business in
U.S. courts – even if the plaintiff was not a U.S. citizen or resident at the
time of the taking.
My
opinion on all this is here.
Some more info on Title III:
The
law is presented as protection for claimants who were never compensated. But the
right to sue is limited. Cuban Americans can’t sue for their homes. No one can
sue for a property worth $50,000 or less when it was taken. And the right to
sue expires if Cuba’s socialist government goes away, or if the President
decides to suspend it again.
The
law also shields two classes of business from Title III lawsuits.
First
are those engaged in “the delivery of international
telecommunication signals to Cuba.” In other words, companies delivering voice
or data traffic to the Cuban network are protected, while those whose
businesses extend into the Cuban domestic network are not.
Then there are those engaged in “transactions and uses of property incident to lawful travel to Cuba, to
the extent that such transactions and uses of property are necessary to the
conduct of such travel.” The House-Senate report accompanying the bill put it
more simply: “any activities related to lawful travel to Cuba” are protected. Those
who want to sue, for example, based on ownership of a port facility, are surely
searching for ways to argue that this language should not apply.
In
theory, the damages could be substantial; the law fixes them at three times the
property’s current value, plus court costs and attorneys’ fees.
Finally,
some U.S. businesses who lost property in Cuba were partially compensated
through a tax deduction. In November 1962, the IRS allowed them to deduct Cuba
confiscation losses from their business income.
Labels:
embargo,
foreign investment,
helms-burton,
us policy
Thursday, January 17, 2019
MLB's good baseball deal
The
opposition to MLB’s deal that will allow Cuban pro ballplayers to sign with big
league clubs without fleeing Cuba and without the need to establish residency
elsewhere, is in part understandable: If you support the embargo, you want to
limit any financial flows to Cuba.
But I suspect there’s more to it. In Miami, some are surely rubbed the wrong way at the idea that Cuban players could play here without emigrating, without effectively breaking with the system, without joining el exilio.
But I suspect there’s more to it. In Miami, some are surely rubbed the wrong way at the idea that Cuban players could play here without emigrating, without effectively breaking with the system, without joining el exilio.
It
certainly shows that those who want to block the deal are not interested in
encouraging some positive changes in Cuba that made it possible: the ability
for Cubans to travel and return, and the ability of pro athletes to earn
market-based pay abroad and return to Cuba with those earnings. They are not
being called desertores anymore.
How do
Cuban ballplayers see the deal that Senator Rubio wants to block?
Look at
the math from a Cuban player’s point of view. Say he signs a one-year, $2
million deal (half the MLB average).
A “release
fee” of $400,000 goes to Cuban baseball – paid by the club, not the player.
If IRS
applies U.S. tax (30%), that’s $600,000 to Uncle Sam, and the player pockets
$1.4 million.
Cuba
decided recently to tax that income at 4%, not the 50% marginal rate applied
to, say, a private restaurant or bed-and-breakfast with taxable income above
$2000.
Senator
Rubio complains about the “new tax” Cuba is imposing (4%), but if it applied
the 50% rate on the books since 1996, the player would pay more than ten times more!
After paying the 4%, the player is left with $1.344
million – more than 2,600 times his salary in the Cuban national league.
More on all this in this column in Cuba Standard.
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