The Flight from America: The Process Gains Momentum
Bill Clinton used to refer to Obama as a Chicago thug, and compared voting for Obama to a roll of dice. It turned out the Chicago thug is a bad roll of dice!
Foreign Account Tax Compliance Act (FATCA) - Washington's Tool for Global Dictatorship
| By Valentin KATASONOV The building of a society in America which is increasingly taking on totalitarian characteristics has already gone through several stages. The most recent one is connected with the U.S. Congress passing a law in 2010, often referred to by the abbreviation FATCA, on the taxation of foreign accounts. This law will come into full force in mid-2014. The great majority of countries have taxation systems which call for taxes to be paid into the state treasury from those types of economic and financial transactions which are made within the jurisdiction of those countries. But American tax law stipulates that U.S. individuals and legal entities must pay taxes to the state treasury regardless of where they are, where their economic and financial transactions take place and where their property is located. That is, taxation is tied to entities, not to territories. Previously, the U.S. Internal Revenue Service monitored the correctness and promptness of tax payments mainly from transactions and assets within the territory (jurisdiction) of the U.S. The American government simply didn't have time to deal with what happened beyond its borders.               FATCA is meant to correct that shortcoming. Now the U.S. Internal Revenue Service is required to monitor every move of U.S. individuals and legal entities in any part of the world. It doesn't plan to do that itself; it plans to require foreign governments, banks and financial institutions to provide it with all the necessary information about American taxpayers who hold deposit or other accounts, stocks, shares in capital, etc. That is, it proposes that other governments and their financial institutions should act as tax agents for the American government. And if they cannot or don't want to perform these functions, it threatens serious consequences. FATCA, which is of a clearly extraterritorial nature, is a prime example of Washington's global dictatorship. I have already written about the reaction of other states on the passing of this law, as well as that of foreign banks and financial organizations. But how are Americans themselves reacting to FATCA? After all, for them this law is dictatorship squared. America: Life Beyond Its Borders America's life beyond its state borders is broad and varied. The U.S. government and the Internal Revenue Service do indeed have a lot to take care of. For almost twenty years after the end of World War II, the U.S. placed limitations on the export of capital, which was driven by the government's desire to stimulate investments in its own economy (to some extent these limitations were not administrative, but rather took the form of higher taxation of the income of American banks and corporations from their foreign assets). However, American capital was eager to leave the bounds of the country, as profit rates in the U.S. itself were dropping as a result of the relative overaccumulation of capital. John Kennedy was the last U.S. president who was able to hold back the tide of American capital rushing to leave the country. After Kennedy's assassination, barriers to the export of capital from the country ceased to exist for American individuals and legal entities. They were only required to declare their foreign income and pay taxes on it to the U.S. treasury (at approximately the same rates as for transactions and income within the country). The accumulation of the most various foreign assets by Americans progressed rapidly and continues to this day. Washington is trying to monitor these flows and these assets and keep statistics on them. U.S. individuals and legal entities abroad hold both financial and non-financial assets. Estimates of non-financial assets are substantially less precise and complete than those for financial assets. It may be assumed that there exists a tendency to move a greater and greater share of non-financial assets out of the scope of monitoring and statistical observation. While in 2008 non-financial assets accounted for 21.7% of all U.S. foreign assets, in 2012 this share dwindled to 5.3%. By all appearances, a significant share of income from foreign assets does not return to America and is reinvested (or used in some other way) abroad. The ratio of income from foreign assets coming into the U.S. to the total volume of foreign U.S. assets is quite modest - less than 4 percent. To this day neither the Department of Commerce (Bureau of Economic Analysis) nor the Department of the Treasury nor the U.S. Internal Revenue Service has been able to obtain accurate evaluations of income received by U.S. individuals and legal entities from their foreign assets. To evade taxes, these persons and entities have used (and continue to use) offshore companies, accounting manipulations, various «gray» business schemes, and non-reporting of financial information to the Internal Revenue Service and other U.S. government agencies.        Americans No Longer Want to Be Americans According to State Department estimates, 7.2 million U.S. citizens live outside the U.S. Almost all of them have some kind of real estate, bank accounts, stocks and other securities, or other assets abroad. Some of them are engaged in business, some work for hire (or by contract), and some are retired or students. But all of them (with the exception of children) are taxpayers. In their countries of residence they pay taxes to the treasuries of those countries. But by all appearances, not all of them pay taxes to the U.S. treasury. According to Internal Revenue Service data, 825,000 tax returns were received from such citizens in 2012. That is, from approximately one out of nine Americans living outside the U.S. Even a layman can see that some expatriate American citizens are evading the payment of taxes to their government. Holders of «green cards» are also supposed to pay taxes to the American treasury. The U.S. Department of Homeland Security estimates the number of «green card» holders on U.S. territory at 13.3 million people. But the majority of these people have not broken ties with their countries of origin. Such «partial» citizens often own property and have income in their original homelands, but they frequently forget to mention this in the declarations they submit to the U.S. Internal Revenue Service. One should also keep in mind that the U.S. uses a broad understanding of the term «citizen». This concept includes both persons born on the territory of the U.S. and those born abroad but to American parents. People in this category are called U.S. Persons, and they may have certain tax obligations to the United States. There have already been many various instances (including court cases) where people living in different parts of the world find out that all along they have been U.S. Persons and owe Uncle Sam considerable amounts of money. The Wall Street Journal recently recounted the experience of one woman from Canada. She was born in the States, but her parents were Canadian citizens, and as a small child she returned to Canada with her family. She only learned that the American government considers her to be one of its subjects and has claims against her when she was fifty, and chances are that she had accumulated a substantial tax bill. Naturally, many 100-percent Americans who live permanently on the territory of the U.S. also have property in other countries. Mostly this is bank accounts, shares in the capital of companies, etc. These assets bring them income, but neither the property nor the income is declared. These are mostly deposit accounts and shares in the capital of banks and companies which are registered in offshore jurisdictions. To this day the U.S. government has a very hazy idea of the size of such assets and incomes, as well as how much the American treasury is losing from the fact that these assets and incomes are not reflected in the tax returns filed by American citizens. Such citizens are called «deadheads». There was a high-profile example with the Swiss bank UBS when under pressure from the U.S. government the bank was forced to supply information about several hundred «deadhead» American clients. By all appearances, there are thousands of such «deadheads» in Switzerland, if not tens of thousands. And in the world there are millions. As a result of «purges» of Swiss banks, the U.S. has already returned six billion dollars to the treasury, and it is expected that another five billion will be returned at the least. FATCA is meant to bring all these «deadheads» to light and force them to pay taxes, repay tax debts for previous years and pay fines. And even to take the most inveterate evaders to court. There is a misconception that the U.S. Internal Revenue Service is hunting only for the big evaders, and doesn't pay attention to the small ones. Several years before the enactment of FATCA (in 2004, to be exact), the U.S. Congress passed a law according to which fines are levied on those who did not inform the Internal Revenue Service about foreign accounts in amounts greater than $10,000. The fines, frankly, are draconian. Either $100,000 or 50 percent of the amount in the account (whichever is greater, naturally). In current U.S. legislation, besides fines for not filing a tax return (or for falsifying it), there are additional fines for nonpayment of the taxes themselves. There have been instances when for the nonpayment of approximately $20,000 in taxes (which could happen even for technical reasons, with no ill intent on the part of the taxpayer) the U.S. Internal Revenue Service imposed a fine of over a million dollars. Many Americans are already beginning to realize what kind of a tax trap the U.S. government is trying to drive them into. And they are beginning to act. As The Wall Street Journal reported in August of this year, Americans are more and more often renouncing their U.S. citizenship or «green cards». In 2011 there were 1781 such people. And in the first half of 2013 alone, 1809 people abandoned their U.S. citizenship or permanent resident status. America is gradually losing the image of the Promised Land. Commenting on the «flight» from U.S. citizenship, experts predict that the exodus from the U.S. will accelerate in 2014, when the law on taxation of foreign accounts comes into full force… The «flight» of banks, corporations and other legal entities from American jurisdiction is taking place even more actively. The «flight» of U.S. legal entities from Washington's eagle eye can be seen in the opening of new companies by the stockholders of old companies in non-American jurisdictions. Then assets and all operations are transferred from the old American companies to the new non-American companies (often using various «grey» schemes). As for the old American companies, they are either closed or continue to operate in a scaled-down version. The world and American media are maintaining complete silence about this consequence of the passing of FATCA. Meanwhile, the «flight» of American business from the country could have a serious negative effect on the U.S. economy. Uncle Sam has socialist cancer camouflaged as an equality issue, a mental health plague camouflaged as a gun issue, and a tyranny armageddon camouflaged as a security issue. Basil Venitis, venitis@gmail.com, http://themostsearched.blogspot.com, @Venitis |
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