Posted on 05/19/2003 3:12:48 AM PDT by Action-America
Hiding Behind the Flag
GOP Assaults on Privacy
Drives More Wealth Offshore!
by John Gaver
May 18, 2003
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"The Executive Orders, regulations, and laws enacted over the past year in the name of “anti-terrorism” constitute the greatest single governmental assault on personal and financial privacy in American history. But there are safe, legal...indeed, wise...steps you can take to grow your wealth and better protect your assets and privacy overseas and offshore."
So begins a recent promotion that I received, advertising an exclusive series of private seminars on international real estate, tax law, banking, and investment, aimed at the wealthy and very wealthy, featuring top flight specialists in each of those disciplines, even including a former US Republican Congressman. But, this particular promotion, from a group called Sovereign Society, is just one of many such promotions that I have received in recent months, from many different groups. All, it seems, have a similar message.
"Protect your assets and even yourself, offshore."
But, far from the content of the message being an omen, it is the increasing volume of such offers, in recent years, that raises several very serious questions. If so many companies are getting into this very specialized business, what does that say about how many of America's wealthy are leaving? What will happen to our tax base, as they leave? What will happen to the jobs that their wealth supported, after they and their investment capital are gone?
I could easily argue the unconstitutionality of several of the laws and regulations that will be discussed here, such as the USA Patriot Act (Public Law 107-56) and Homeland Security Act (HSA) (Public Law 107-296). But many highly qualified legal analysts have already proven that point much better than I could. Yet, many conservatives still seem indisposed to criticize the lawmakers who passed those laws and regulations, since those lawmakers are, for the most part, Republican So, rather than rehash the unconstitutionality of these actions, I will concentrate on their outcome, in the hope that when conservatives and even liberals see how their own pocketbooks will be affected, they will wake up.
As you read the rest of this article, keep in mind that whether or not the threats to the wealthy that these laws and regulations present are real or perceived, is unimportant. The important and undeniable fact is that more and more of the wealthy are viewing these actions as a personal threat to their economic well-being and are reacting accordingly and nothing that you, I nor anyone else think about the constitutionality or unconstitutionality of those actions, is going to change that.
The growth of the offshore investment market is only the symptom of a much deeper and very insidious problem facing America. The problem is that increasingly, the wealthy perceive, whether correctly or incorrectly, that they are under attack by their own government and they are taking the only rational option left open to them. They are taking their wealth and leaving.
In fact, as a result of increasingly onerous legislation and regulation over the last 25 years, aimed at punishing and controlling wealth, the wealthy are now leaving the US at an alarming rate. According to an April 2, 2003 Financial Times article, approximately 250,000 Americans are leaving the US every year. Common sense tells us that few of that number are poor. This is a serious problem for all of us, since the people who are leaving are the people who pay almost all of the taxes. Just the top 1% of income earners or 1.3 million, paid over 37% of all taxes collected in 2000. At an expatriation rate of 250,000 per year, we could easily lose a third of our tax base in as little as 5 years.
(For more detail on the actual numbers and links to the actual statistics, see the Action America articles, Tick-Tick-Tick - The Economy Bomb and 1986-2000 IRS Collections Data by Income Group.)
Until President George H. Bush assumed office in 1988, the promotion of offshore investment strategies occupied a very small niche market. But, after the massive tax increase, passed by a Democrat Congress and signed into law by President Bush, that market began to grow, as wealthy Americans began to feel threatened by their own government. Although this only caused a nominal shift in investment strategies, at the time, it represented the beginning of a major trend.
Then, as a result of the Clinton administration's many attacks on wealth, the market for offshore investment advice grew dramatically throughout the 1990's. The wealthy no longer simply felt threatened. They were under constant and increasing assault by their own government. In 1996, a Republican Congress passed and President Clinton signed into law, the Health Insurance Portability & Accountability Act (26 USC 877(a)(1)), which, among other things, contained what was considered to be the most onerous provision of law in US history. It claims the right of the US government to tax former US citizens for ten years after they have renounced their US citizenship and are taxpaying citizens of another country, for no better reason than that they were wealthy before they left.
After watching the US government so blatantly ignore the Constitution and international law during the Clinton administration, most wealthy people thought that it couldn't get any worse and heartily welcomed the election of a Republican controlled government. But, nothing that went before could have prepared them for the massive assault on wealth and privacy, under the guise of patriotism, that has been perpetrated by, of all people, Republicans.
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As a fraction of the "tax base", they are insignificant.
Here's yet another example of why logician2u was right when he said in a recent post on another thread:
If this keeps up, that inscription at the Statue of Liberty will need to be changed to something like
Give me your tired, your poor, and we'll give you in exchange our rich and most productive citizens, yearning to breathe free.
Vote in the poll at the bottom, too.
As a fraction of the "tax base", they are insignificant.
Perhaps you should go back and take high school math again.
As was pointed out in the above article, according to the IRS, the top 1% of income earners paid over 37% of all income tax collected in 2000. I don't know of any school that teaches that 37% is insignificant.
Also, as pointed out in the above article, about 250,000 Americans expatriate every year and although they don't give a breakdown by income category, it's a pretty safe bet that the vast majority of them are rich and have the means to live well overseas. If only 80% of them are wealthy, then we could loose that top 1% (about 1.3 million taxpayers) in just over 6 years and that's assuming that the expatriation rate, which is on the rise, levels off at 250,000 per year.
Without that top 1%, whose base income, according to the IRS, is only about $300,000 per year, those who remain will be faced with a greater than 55% tax increase, just to stay even.
I challenge you to find anyone who thinks that a 55% tax increase would be insignificant.
Perhaps you confused the number of wealthy taxpayers leaving with the amount of wealth that they control and the amount of taxes that they pay. We can't afford to chase off the folks who are paying the bills.
I have found places where its easier to do business, where the culture is intact and not completely fragmented, and where one can live in relative peace from the media and government.
Nothing is perfect, but there are many "betters" in terms of quality of life.
...it's no coincidence that I'm going to Chile on vacation this year and learning to speak Spanish.
Check out Belize. English speaking member of the commonwealth. Because of its bank secrecy laws, it is well on its way to becoming one of the better banking centers. Only a little problem with large amounts of foreign exchange, but that's about to change. And, the cost of living is only about 20-25 percent of what it is here. And, oh yes! - the best diving on the longest barrier reef in this hemisphere.
On the other hand, if the cost of living is no object, try Trinidad and Tobago. Also English speaking. Petroleum based economy. The most laid back people I have ever met. Fabulous shrimp sandwiches. And, it's out of the hurricane path (7 degrees north of the equator).
Out of curiosity, where? I haven't the means to make such a change, but maybe in a few years I would consider it.
Nothing is perfect, but there are many "betters" in terms of quality of life.
Interesting statement. In fact, for many years, the US always came out on top in the various quality of life indexes. Today, the only ones where the US comes out on top is in those sponsored by US interests who have something to gain by putting the US on top and not even all of them rate the US on top. In general, most of the long time, respected quality of life and freedom indexes rate the US between 7 and 13. Our government should be ashamed.
HOOAH!
Doing bad things to bad people...
Out of curiosity, where? I haven't the means to make such a change, but maybe in a few years I would consider it.
In a recent post, I listed quite a number of places to which Americans are escaping, along with links to information about each. Some are quite economical.
Here is the link to that post:
http://www.freerepublic.com/focus/f-news/886319/posts?page=8#8
You really have to get out and take a look, because every person has different preferences.
These guys have a history of taking positions in the investments and equities they tout (the SEC came down on one Agora interest a few weeks ago).
The Escape Artist site is pretty good.
Been going there since 1963, when it was British Honduras. They nationalized my land there in the 70's. It happens in areas outside the US, but it sometimes happens here as well.
The people are indeed wonderful, and educated for the region, but it can be frustrating living in a second rate country. Prices are great, unless you try to live like an American.
The interior of the country is magical, but bring enough OFF to bathe in. Plus, the socialist are ever present, and the natives are a bit lazy, and the heat is stiffling..but... all and all, it is not a bad place if you gotta leave home, I'll stay and protect and fight the losers here, it keeps me young. Ha!
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