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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The move to completely computerized voting will complete this trend. There will be no way whatsoever to prove the totalization is inaccurate. As Joe Stalin said, "It doesn't matter who votes, it matters who counts the votes."
In fact this development may be positive. The continuing decay of Democracy can be slowed considerably with sufficient vote count fraud. The Roman Empire kept the outer form of the Republic to it's end, and perhaps we will keep "voting" until the end as well.
Maybe a home overseas and a vacation home in the US rather than vice-versa....
I'll reckon the rich know that a welfare/police state is not the 'cover charge' for them creating wealth. Our Founders were born of people who ran from wealth grabbing governments of Europe. When they brought their claws over here we shot them and told them to get lost. By now we've grown our own at home. Some people would rather just move on again than take on the millions of largesse recipients who would fight for a share of their neighbor's earnings.
Except in court.
I just want our federal government to "play by the rules."
Amendment V, U.S. Constitution:
"...nor shall private property be taken for public use without just compensation."
Every regulation enacted by our Congress has a "cost" of compliance, a taking of private property.
And why does the regulation exist in the first place? For the public benefit or use.
Thus, every regulation has to have a corresponding tax, on all citizens, to compensate the private property owners for their loss of private property, otherwise the regulation is unconstitutional.
Every member of Congress and any President that signs such unconstitutional legislation is breaking their oath of office. Talk about being "rotten from the top down?"
Then you talk about about "Americans (that) have become so self-centered, as well as weak..." and that is nothing but about "...ME, ME,ME..." consider the following:
It took a constitutional amendment, the 16th, to consitutionally enact a "progressive" income tax in the U.S.
The founding fathers had specifically limited the power of income taxation to being apportioned equally among all citizens.
But, noooo, the most dispicable sins of humans reared its ugly head (envy, jealousy, and greed, "ME, ME, ME," as you put it) by 1913, with the ratification date of the 16th amendment, so that the immoral, greedy, socialist/communist could begin the selective confiscation of wealth through taxation.
Also, one more quick note about "100%" taxation rate. There were also a plethora of deductions available at that time which made the effective tax rate closer to 5%.
Please pass the barf bag to me when you are through.
Anyone who takes their wealth and moves overseas to avoid paying taxes should be striped of their US citizenship and forbidden from ever reentering the US. If taxes are too high then do like the rest of us and fight the good political fight.
These people demonstrate the same level of honor and courage as Democrats in the Texas Legislature.
Spain is cool.
The answer (and it is only the first step in Taking America Back), as we all know, is to replace the income tax with a National Retail Sales Tax and abolish the IRS.
That would re-establish the primacy of the people over their government, a necessary first step in causing more Americans to stand up for the FReedoms and Liberties bequeathed to us by the Founding Fathers.
“I have sworn upon the altar of God eternal hostility against every form of tyranny over the mind of man.” [Thomas Jefferson, letter to Benjamin Rush, 1800.]
Click here to help us scrap the Code, scrap the IRS and abolish the VLWC!
You can also click here to sign a petition in support of Fundamental Tax Replacement.
We will never be a truly FRee people so long as we have the income tax and the IRS.
Does it sicken you that I take my home mortgage interest deduction? What about the deduction for my little girl?
Just what is it that sickens you?
High taxes for the top income brackets? How about 100% back then. Did they run away? NO.
That's because there were so many hole and exclusions in that tax code that history tells us that people like the Rockefellers, the Morgans and the Carnegies actually paid almost no tax at all. So much for that flimsy argument.
Duty, honor, country - remember those words?
Yep. And I know more than a few career US military men who have found it necessary to expatriate, including a former Marine officer (I think that he was a Lt. Col. when he retired). To a man, they all tell the same story. "I didn't leave the United States. The United States government left me."
You greedy corporate fools don't understand that by moving you operations offshore in order to evade taxes you become no better than any other foreign company.
So, what's wrong with Sony, British Air or Acer? Sony makes some of the finest electronics in the world. Few airlines (none of US origin) can compare to the service on British Air. And the chances are very good that the mother board in the computer that you are using was made by Acer.
You desire the access to America's markets, yet you don't want to pay for the things that go with that access (like paying Americans to work in your facilities).
1) The American markets used to be the holy grail of marketing. But today, there are many other very lucrative markets. Do you want to make a billion plus dollars. Just earn one dollar from every person in China. The point is that the US markets are not nearly the Goliath that they used to be. I would be quite content to give up the US markets and make less money, if it means not have the risk of having it all confiscated by the US government, which is a genuine risk today (http://www.fear.org/). They aren't greedy. They just don't want to risk losing everything that they have. Furthermore, it is precisely because of recent action by the US government, that the wealthy fear that the once dominant US markets may not be nearly so strong in the future.
2) If you paid any attention to what has been going on in Congress, you would know that the under the provisions of the tax bill that just came out of the Senate Finance Committee, Americans who work and live in other nations will have to pay tax to the IRS on all their income, even though that income is earned - and subject to tax - overseas. That means that US companies that want to hire Americans to work in their overseas factories won't be able to find any takers, if this bill passes. Who would want to be double taxed? And, foreign companies that might have hired Americans won't be able to find any takers either. Gee. There goes another weak argument out the door.
If you want full rights of being an American corporation, then play by the rules.
That statement used to mean something. Being an American company used to have value. But today, it means that you have more tax overhead than a similar sized corporation anywhere else in the world. The only two other countries in the world that tax the offshore earnings of it's people and corporations are Philippines and Eritrea, neither of which are known for their international corporations. It also means that you are much more likely to face frivolous law suits than any company of any size in any other country. In fact, some companies that were having trouble competing with their lower taxed foreign rivals tried to be patriotic and simply reincorporate offshore, keeping the jobs here in the US and are now under attack in Congress, with a plethora of anti-inversion legislation, that will force them to either go under, cut wages, become so devalued that they are bought out by their foreign competition at bargain basement prices or move their entire operation offshore, jobs and all. Again, this is part of the same tax bill discussed above. So, why would a business want to be an American corporation. The rules that you have to play by are not only too costly, but the cost is going even higher
My only hope for you is that someday you are forced to live on the other side of the tracks, and survive out in our world.
Been there. Done that. Wasn't impressed with the conditions, so I left. Wait a moment! That's what the wealthy are doing now. I guess they aren't impressed with the conditions here, either.
If some cataclysmic event takes place, and human civilization crumbles,...
Now who's being self centered? Since I began traveling in other countries a lot, the thing that I have noticed about many Americans, including some who are rather well educated, is that they think that the world revolves around them. They seem to think that if the United States should collapse under the weight of oppressive legislation, that such collapse would affect all civilization. Surprise! Not so. Sure, other countries would have to do some steppin' an' fetchin' for a while. There would be a restructuring for a while. But, no matter how great you may think the United States is, even it's total collapse would not mean that civilization would crumble. In fact, since 1990, it is estimated that over 1,000,000 Americans (mostly wealthy) have left and more are leaving every day. And even those wealthy who are staying have significant amounts of their wealth invested offshore. By the time such a cataclysm could occur here, most of the wealth that runs the world will be elsewhere. The laws that our own elected representatives are passing right now are insuring that.
The above rant is directed at those who are not just successful, but also decidedly self-centered, arrogant, and unpatriotic.
Maybe I'm interpreting that wrong. But it sounds like you think that it is self-centered, arrogant and unpatriotic to want to keep what you have. Somehow that concept escapes me.
A friend of mine, who lives in Belize put it best. He said that he could afford to pay half of everything that he earns in taxes and he would still make more in one day than he could possibly spend the next. But what he couldn't afford was to have all $20 million confiscated at once. You see, as a US citizen, his money isn't safe from confiscation, no matter where in the world it was earned or may be banked. With no more than the signature of a career bureaucrat, a US citizen can lose all of his worldwide assets and the burden of proof in on the citizen, not the government, to get it back. Of course, with no money to hire an attorney, it would be next to impossible to win a case against the US government. On the other hand, my friend told me that, if for discussion sake, Panama were to have some upheaval and nationalize all of the banks' assets, he might lose a few million dollars, but the bulk of his assets would remain intact. It's called "Risk Management" and he simply saw the risk of remaining a US citizen as being too great.
You've made your riches in America's capitalist society, yet don't want to pay the cover charge.
The problem is that the government keeps raising the cover charge and there are now plenty of places that offer similar or even better standards of living with a lower cover charge. Why would you want to pay a $50 cover charge to get into McDonalds, when you can get into the fancy club down the street for $2.50? Besides, after all, as has been happening more and more often, that cover charge ends up being everything that you have. In fact, I know of the case of one California millionaire (Donald Scott) who refused to sell a corner of his ancestral ranch to the US Parks Department and ended up losing everything that the US government could get its hands on, including his life, when they made up a phony drug raid on his property. When his wife threatened to sue the government, while his body still laid under a sheet at the top of the stairs, the agent in charge responded, "What'cha gonna use for money to hire the attorney with, bi+ch? You're broke!" Fortunately, her late husband had set up a method whereby money was funneled directly to the attorneys from an offshore account that he had no control over and his $1.5 million ranch was eventually returned to his widow, along with $8.5 million in taxpayer money in damages. But, like Ruby Ridge and Waco, the government agents responsible for that proven phony raid never suffered even a rhetorical slap on the hand. Donald Scott paid the ultimate cover charge for being wealthy in America.
I think that with things like that going on here, I can understand why many of the wealthy think that the cover charge, just may be a little too high.
Your "agenda" is showing through.
Well, at least on one point, we can agree. I grew up here. It's my home. Even with all the problems, I like it here. I don't want to have to leave. That's my agenda. I am working to try to affect some change that will turn things around before I am forced to leave.
As much as I want to stay, I have worked too hard to see it all go down the tubes if the economy does go bust. I'll stay as long as I can, but I won't lose it all, in the name of false patriotism. There is nothing patriotic about bending over for an out of control government, that no longer recognizes the Constitution, that made this nation great.
Like so many of my expat friends have said, if I leave, I won't be leaving the United States, because the United States government will have already left me. In other words:
I love my country. It's my government that I fear.
The Escape Artist site is pretty good.
Agreed.
Actually, I only cited the Sovereign Society ad, because of the wording at the top. It was a good lead in to what the article was about. Actually, I have received at least 8 or 9 such ads from different groups within the last couple of months. But, if I should ever get to the point that I feel that I have to leave, I already have the international attorneys and high level contacts in several desirable countries. Since we deal with people at the highest levels in the countries where we do business, it is even possible that we might even get a black (diplomatic) passport. It doesn't do a lot of good when you are not traveling on official business, but they tell me that it sure gets you through customs a lot faster.
Anyone who takes their wealth and moves overseas to avoid paying taxes should be striped of their US citizenship and forbidden from ever reentering the US.
You're a little too late. The US government already passed that law in 1996. It's the Immigration and Nationality Act of 1996 (8 USC 1182(a)(10)(E)) and that law is one that is often cited by expats as the proverbial straw that broke the camel's back and made them decide to leave. It seems that our lawmakers can't seem to figure out that it is precisely those kinds of laws that is driving expatriation.
When I asked one of my expat friends if that didn't bother him, his reply was, "Why would I ever want to go back to a country that treated my like dirt, just because I busted my back side and made some money. You would think that three Purple Hearts would be enough blood for them, but not if you have money."
If taxes are too high then do like the rest of us and fight the good political fight.
It goes far beyond taxes. Can you say C O N F I S C A T I O N ?
If you don't have much to start with, then you don't have much to lose. But, if you have spent your life working your tail off and have actually built a sizable estate, then the threat of confiscation is staggering and it's getting worse every day, even with the Republicans in control.
We should be passing laws that encourage the wealthy to stay, rather than laws that punish them for leaving.
Not at all, I don't like high taxas either. I am just saying that filling ones suitcaes with cash and running for some 3rd world country is not the answer.
Agreed, but you can’t do that from a foreign country.
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