Posted on 04/03/2010 6:00:07 AM PDT by Candor7
It couldn't have happened to a nicer country. On March 18, with very little pomp and circumstance, president Obama passed the most recent stimulus act, the $17.5 billion Hiring Incentives to Restore Employment Act (H.R. 2487), brilliantly goalseeked by the administration's millionaire cronies to abbreviate as HIRE. As it was merely the latest in an endless stream of acts destined to expand the government payroll to infinity, nobody cared about it, or actually read it. Because if anyone had read it, the act would have been known as the Capital Controls Act, as one of the lesser, but infinitely more important provisions on page 27, known as Offset Provisions - Subtitle A—Foreign Account Tax Compliance, institutes just that. In brief, the Provision requires that foreign banks not only withhold 30% of all outgoing capital flows (likely remitting the collection promptly back to the US Treasury) but also disclose the full details of non-exempt account-holders to the US and the IRS. And should this provision be deemed illegal by a given foreign nation's domestic laws (think Switzerland), well the foreign financial institution is required to close the account. It's the law. If you thought you could move your capital to the non-sequestration safety of non-US financial institutions, sorry you lose - the law now says so. Capital Controls are now here and are now fully enforced by the law.
Let's parse through the just passed law, which has been mentioned by exactly zero mainstream media outlets.
Here is the default new state of capital outflows:
(a) IN GENERAL.—The Internal Revenue Code of 1986 is amended by inserting after chapter 3 the following new chapter:
‘‘CHAPTER 4—TAXES TO ENFORCE REPORTING ON CERTAIN FOREIGN ACCOUNTS ‘‘Sec. 1471. Withholdable payments to foreign financial institutions. ‘‘Sec. 1472. Withholdable payments to other foreign entities. ‘‘Sec. 1473. Definitions. ‘‘Sec. 1474. Special rules. ‘‘SEC. 1471. WITHHOLDABLE PAYMENTS TO FOREIGN FINANCIAL INSTITUTIONS.
‘‘(a) IN GENERAL.—In the case of any withholdable payment to a foreign financial institution which does not meet the requirements of subsection (b), the withholding agent with respect to such payment shall deduct and withhold from such payment a tax equal to 30 percent of the amount of such payment.
Clarifying who this law applies to:
‘‘(C) in the case of any United States account maintained by such institution, to report on an annual basis the information described in subsection (c) with respect to such account, ‘‘(D) to deduct and withhold a tax equal to 30 percent of—
‘‘(i) any passthru payment which is made by such institution to a recalcitrant account holder or another foreign financial institution which does not meet the requirements of this subsection, and
‘‘(ii) in the case of any passthru payment which is made by such institution to a foreign financial institution which has in effect an election under paragraph (3) with respect to such payment, so much of such payment as is allocable to accounts held by recalcitrant account holders or foreign financial institutions which do not meet the requirements of this subsection.
What happens if this brand new law impinges and/or is in blatant contradiction with existing foreign laws?
‘‘(F) in any case in which any foreign law would (but for a waiver described in clause (i)) prevent the reporting of any information referred to in this subsection or subsection (c) with respect to any United States account maintained by such institution—
‘‘(i) to attempt to obtain a valid and effective waiver of such law from each holder of such account, and ‘‘(ii) if a waiver described in clause (i) is not obtained from each such holder within a reasonable period of time, to close such account.
Not only are capital flows now to be overseen and controlled by the government and the IRS, but holders of foreign accounts can kiss any semblance of privacy goodbye:
‘‘(c) INFORMATION REQUIRED TO BE REPORTED ON UNITED STATES ACCOUNTS.— ‘‘(1) IN GENERAL.—The agreement described in subsection (b) shall require the foreign financial institution to report the following with respect to each United States account maintained by such institution: ‘‘(A) The name, address, and TIN of each account holder which is a specified United States person and, in the case of any account holder which is a United States owned foreign entity, the name, address, and TIN of each substantial United States owner of such entity. ‘‘(B) The account number. ‘‘(C) The account balance or value (determined at such time and in such manner as the Secretary may provide). ‘‘(D) Except to the extent provided by the Secretary, the gross receipts and gross withdrawals or payments from the account (determined for such period and in such manner as the Secretary may provide).
The only exemption to the rule? If you hold the meager sum of $50,000 or less in foreign accounts.
‘‘(B) EXCEPTION FOR CERTAIN ACCOUNTS HELD BY INDIVIDUALS.—Unless the foreign financial institution elects to not have this subparagraph apply, such term shall not include any depository account maintained by such financial institution if— ‘‘(i) each holder of such account is a natural person,and ‘‘(ii) with respect to each holder of such account, the aggregate value of all depository accounts held (in whole or in part) by such holder and maintained by the same financial institution which maintains such account does not exceed $50,000.
And, while we are on the topic of definitions, here is how "financial account" is defined by the US:
‘‘(2) FINANCIAL ACCOUNT.—Except as otherwise provided by the Secretary, the term ‘financial account’ means, with respect to any financial institution— ‘‘(A) any depository account maintained by such financial institution, ‘‘(B) any custodial account maintained by such financial institution, and ‘‘(C) any equity or debt interest in such financial institution (other than interests which are regularly traded on an established securities market). Any equity or debt interest which constitutes a financial account under subparagraph (C) with respect to any financial institution shall be treated for purposes of this section as maintained by such financial institution.
In case you find you do not like to be subject to capital controls, you are now deemed a "Recalcitrant Account Holder."
‘‘(6) RECALCITRANT ACCOUNT HOLDER.—The term ‘recalcitrant account holder’ means any account holder which— ‘‘(A) fails to comply with reasonable requests for the information referred to in subsection (b)(1)(A) or (c)(1)(A), or ‘‘(B) fails to provide a waiver described in subsection (b)(1)(F) upon request.
But guess what - if you are a foreign Central Bank, or if the Secretary determined that you are "a low risk for tax evasion" (unlike the Secretary himself) you still can do whatever the hell you want:
‘‘(f) EXCEPTION FOR CERTAIN PAYMENTS.—Subsection (a) shall not apply to any payment to the extent that the beneficial owner of such payment is— ‘‘(1) any foreign government, any political subdivision of a foreign government, or any wholly owned agency or instrumentality of any one or more of the foregoing, ‘‘(2) any international organization or any wholly owned agency or instrumentality thereof, ‘‘(3) any foreign central bank of issue, or ‘‘(4) any other class of persons identified by the Secretary for purposes of this subsection as posing a low risk of tax evasion.
One thing we are confused about is whether this law is a preamble, or already incorporates, the flow of non-cash assets, such as commodities, and, thus, gold. If an account transfers, via physical or paper delivery, gold from a domestic account to a foreign one, we are not sure if the language deems this a 30% taxable transaction, although preliminary discussions with lawyers indicates this is likely the case.
And so the noose on capital mobility tightens, as very soon the only option US citizens have when it comes to investing their money, will be in government mandated retirement annuities, which will likely be the next step in the capital control escalation, which will culminate with every single free dollar required to be reinvested into the US, likely in the form of purchasing US Treasury emissions such as Treasuries, TIPS and other worthless pieces of paper.
Congratulations bankrupt America - you are now one step closer to a thoroughly non-free market.
Full HIRE Act text: ( at link)
I like Palin, but he doesn't have what it takes to get the job done. 10-15 years ago, sure she would have been great turning back the tide. But, it's too far gone now. We need a commander and a general, a take no prisoners conservative/libertarian to face this opponent down and to give supporters of this country and everything it stood for the confidence to do what needs to be done.
Palin doesn't fully understand the threat and she has too much to lose.
Not long ago, if you had a bank account in Venesuela, it was confiscated. Chavez merely stole everyone’s money.
FACT
Only if you've kept it secret (i.e., not declared it as a foreign account on your income tax, and refused to give --when asked, soon--your TIN to the Canadian bank to forward to the IRS).
“So let’s say that I buy a home and a business in Costa Rica. I move there, maintain a dual citzenship, and run my contracting business. Do I owe anything to the US government?”
That depends on a number of factors. You would be well advised to speak to a CPA familiar with tax law in Costa Rica & the USA.
“Soros shouldn’t be happy about this. Oh, wait a minute, it’s his agenda not 0kaka’s; therefore, a patriot like Soros must be exempt from this progressive plague.”
Soros has owned businesses in Bermuda, and elsewhere for years. He hides his money in a chain of corporations.
I am aware of that, but thank you for posting it.
That is why I so often refer to Obummer, the Marxist now posing as a Fascist.
Today he is a Fascist.
When he gets enough control, he will kick the CEO’s under the bus and show his true colors as a Marxist.
Repeal the 17Th Amendment.
Return the selection of senators to the state legislatures as our founding fathers intended. This is the only sure way to return to the states their lawful rights under the Constitution. Senators will then, as actual representatives of the states rather than the people, protect states rights and prevent the federal government from destroying the states with unfunded mandates
Yep, I'm sure he gave 0kaka the order to clamp down on capital after he (Soros) transferred all he and his rich Progressive cronies wanted.
Moreover, in every dictatorship, the ruling elite and their underlings can do what they please. They all have billions in foreign banks saved for the eventual rainy day when they are kicked out.
Remember, all the restrictions apply only for the riffraff, us peasants.
The dope on Obama/Soros/ACORN/SEIU/ was all available on the internet 2 years ago. I moved almost all of my money offshore by December 2008.
Although I fear you well may be right, I take some solace in the fact that there are still many LEOs and damn near all of the military who haven't forgotten that their allegiance is to the country, not the president and congress.
Do they really think they're going to take on a sea of armed and angry citizens, even with their automatic weapons and armored vehicles? The cops I know haven't forgotten that they're citizens as well, subject to the same oppression as the rest of us.
If it's true that no men or women of solid character still exist, then we are truly hosed. But I think there's still a few true Americans around who understand that the trappings of wealth and power don't necessarily mean individual happiness and contentment.
The founders intended a citizen government, where our representatives would leave their businesses and farms for two years, do their duty, and then return. It may seem naive and simplistic in today's geopolitical climate, but the concept is still valid; we need to end the reign of the professional politician.
That recent immigrant with the funny accent, selling hot dogs from the push cart on the corner, is already a better American capitalist than the current squatter in the oval office. If BO had ever worked an honest job for a single day in his life, we wouldn't be where we are now.
We can never, ever, forget that our country belongs to its citizens and taxpayers, not those who plunder the fruits of our labor in some grand utopian scheme.
Good for you!
Things are a lot easier for me, I have no money to move! LOL
:)
Yes. I wonder how the membership numbers of Oathkeepers are doing...
Even 1,000 can be snatched.
Agreed. Just the ones who pay taxes and have informed treasury as required that they have accounts abroad.
Obama just made 100 million enemies, at least.Which is why the MSM won’t write it up.The fewer who know the better fromm their POV.
The Right ran for cover. The local cops and the media sucked the Fed's hind tit, and did what they were ordered to do. I don't have much faith in local LEOs when they can be bought with bloused boots and surplus web gear, and a promise that they won't be prosecuted...
Great comment, thanks!
In short, Obama invested almost exclusively in Tax Exempt instruments AND mostly in foreign investment accounts. In fact a number you can glean from the bowels of his tax return is that he made approximately $176.000 in foreign dividends that were untaxed by the U.S. government.
It seems he is the one during the campaign that said the "wealthy" weren't paying their fair share and that big ugly republicans are exporting jobs. He was guilty of both in the first year he had to make discretionary investment decisions.
Excuse me, that would be $176,000 not $176.000
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