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 […] 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.
Shades of Germany, 1936ish
This makes criminals out of a lot of innocent
people.
It shows fear.
hmmmm . . . maybe it has something to do with Barry’s use of the American Credit Card . . .
http://nationalaffairs.com/publications/detail/america-in-the-red
Really? You’re really going to give Obama credit for this?
The US government has been trying to control the outflow of non tax-exempt funds for decades. Virtually every president has tried it. Its only become easier in the last decade or so because Bush’s anti-terror policies called for transparency in international banking, ostensibly to stop terrorists from moving funds.
The IRS staked its claim in the Bush days. They have been going after Swiss and Luxembourg banks since 2006. Obama is simply picking up where Bush left off.
Not that either Bush or Obama were necessarily wrong. With the exception of the usual sub-Saharan suspects, the tax departments of virtually every country have been demanding similar powers and transparency.
Our own great nation insists on taxing citizens on global income. Does anyone here want to hazard a guess as to how much tax evasion some of the richer Canadians are partaking in by keeping their money hidden away? And no, they don’t use that money to stimulate the Canadian economy. They use it to go to places like Dubai and the Maldives to stimulate those economies, before returning to Canada to partake in the government services here.
What jurisdiction does an American law have over a Swiss bank? Wouldn’t the Swiss bank just say “piss-off USA”?
“What jurisdiction does an American law have over a Swiss bank? Wouldn’t the Swiss bank just say “piss-off USA”?”
A lot more than you would think. Swiss banks have been used by supporters of groups like AQ to move funds around. The Bush Administration has demanded a greater degree of transparency or economic sanctions. The Swiss have obliged to a certain extent. The Bush Administration was right on this one – you have to keep an eye on the money and who is moving it. The success against AQ is based, to a large degree, on the stranglehold that the US has created on its financial abilities.
The IRS has always been involved in the issue. Under the Bush Administration, they began recieving information about US tax evaders from Swiss banks. Its nothing new, or Obama-esque. Several democratic governments are also making a lot of noise these days.
As for the line about “mentioned by exactly zero mainstream media outlets”, the people affected by these rules are richer than rich (maintaining an anonymous swiss bank account isnt cheap) and they get thier news from the source, not through newspapers and CNN. The mainstream media is for the middle and lower classes. The upper class gets its news directy from the source.
Can they force my mattress to close my stash?
Think objectively people, how many of these have been accomplished in the last 2 Administrations
14 SIGNPOSTS TO SLAVERY
1. Restrictions on taking money out of the country and on the establishment or retention of a foreign bank account by an American citizen. (Capital Controls Act)
2. Abolition of private ownership of hand guns. (They’re trying – sales are through application only and registered – confiscation occurs when these ownership lists are complete enough)
3. Detention of individuals without judicial process. ( Been doing this since the patriot act)
4. Requirements that private financial transactions be keyed to social security numbers or other government identification so that government records of these transactions can be fed into a computer. (all private personal investment transactions require Fed ID like a fed security number)
5. Use of compulsory education laws to forbid attendance at private schools or home schooling. (some states have this)
6. Compulsory non-military service. (We heard BO musing about a citizen army)
7. Compulsory psychological treatment for non-government workers or public school children. (under ADD and other arbitrary psychological assesment by school personnel, 67% of school kids have been medicated with psychotrophic meds)
8. An official declaration that anti-communist (Patriot/tea party) organizations are subversive and subsequent legal action taken to suppress them. (Homeland security memos list Christians, constitutionalists, gun owners and veterns as potential terrorists)
9. Laws limiting the number of people allowed to meet in a private home. (not yet but you now need a permit to gather in public stating a specific purpose – the decision is arbitrary))
10. Any significant change in passport regulations to make passports more difficult to obtain. (bio metric national ID)
11. Wage and price controls, especially in a non-wartime situation. (Cap and trade indirectly creates a false cost of goods)
12. Any kind of compulsory registration with the government of where individuals work. (IRS wage deduction form)
13. Any attempt to restrict freedom of movement within the United States. (Random stop checks, Passenger frisking, arbitrary no fly lists)
14. Any attempt to make a new major law by executive decree (that is, actually put into effect, not merely authorized as by existing executive orders.) (Obamacare – well almost)
Twiddle,
Taking steps to keep more of your money for yourself is not “tax evasion”. It’s the prudent response of wise investors who are attempting to keep capital out of the hands of our vote-buying politicians who excel at pouring it down rat-holes. Capital belongs to the individuals who create it, not to the parasites who seek to steal it.
Maybe if we Canadians (and Americans) had governments that were not so keen to tax and regulate the economy to death, we wouldn’t need such witholding taxes to begin with. In fact, capital would be flowing in the opposite direction.
A growing economy needs capital investment in order to prosper. Exchange controls also have the effect of stifling inflows of capital. After all, what foreigner would invest in a country if he no assurance that he could repatriate his money if he desired?
Dennis
I agree wholeheartedly that transferring funds out of the country is based on pragmatism, not criminal intent. Be that as it may, tax laws in Canada and the US are what they are. I personally think its absurd that global income should be taxed in Canada since it is inevitably taxed elsewhere, but thats just the way it is.
You have to keep in mind that the average Canadian cannot afford to send money to an overseas bank. An anonymous bank account anywhere in the world costs a lot of money to set up and maintain. Swiss banks charge fees that are much too high for your average Canadian to even consider.
Therefore it becomes a question of fairness: The tax rate has to apply in a uniform manner to all Canadian citizens regardless of their income or ability to ship money out through loopholes.
In any case, this tax haven issue is hardly a new issue and the terrorism angle has forced transparency. The IRS has been going after the swiss for years, so I would be wary of attributing it all to Obama.
Wow. That is enormous and appalling.
It’s called tax avoidance, not tax evasion.
The former is legal, the latter not.
Twiddle says it becomes a question of fairness, which raised a very big red flag. The “fairness” excuse is a cover for ensuring that no one can benefit of the thing in question. In other words if we can not all do the same, then no body should be able. This is the basis of our failing socialised health care and a whole lot more.
While I do not have sufficient funds to warrant an off-shore bank account, I see no need to seek to prevent others from doing so, especially knowing to what extent governments will go to deprive productive citizens of their income.
Using terrorism as an excuse to rob everyone else is just that; simply a cover. Prior to terrorism the claim was to prevent drug lords and other criminals from profiting.
I can see the next excuse most likely being the need to go after those rich people.
The Fly was spot on. It stinks of pure totalitarianism.
There will always be Countries that will not follow insane laws like this from other Polities to force them to comply. In fact some are now actively hostile to the Obama’s of the World with the armies of IRS. New satellite secret accounts for those in any Nation trying to steal their own citizens money.Obama gave up the space program with many other Countries now with launch capability for use.
How will America enable this Law when its own people fight it. As well American influence & control is dying. Thanks again to Obama.
When not if America loses its credit rating & being the World currency. Who will care?
JMO
Actually, what it stinks most of is a country with a shakey financial system.
See Great Britain post WWII, France, etc…
The Fly is dead on. The noose is getting tighter and tighter every day. Every crisis (mostly produced by governments) offers a fresh excuse to control currency and individual liberty. When it comes right down to it, governments are the world’s largest money launderers and counterfeiters. They print it in quantities that would stagger the imagination and sprinkle it like fairy dust throughout the economy, robbing the working stiff of his earnings and savings. And when people try to protect their money, they accuse them of criminal activity.
Smarten up people. Governments do not work for you.
I agree with the fly …i do think twiddle does make some understandible point’s but twiddle also needs to understand just like alain said ..so if i can’t have it no one else should and basically becasue the drug lords and taliban al queda, hamas ,hezzbohla …are friken losers we here in the west should suffer ….uh uh…that is not right these people are the criminals not me or jonny rich boy who want’s to keep his money for himself or spend it where you want ….i say leave the people alone and start targeting the real criminals not the tax avoiders and if we weren’t such a socialist country herei n canada no body would really give a crap about who get ‘s what or does what …why becasue it wouldn’t afffect them ..ie. health care ….this is such an example of why should the guy who eat’s right walks to work a block away and reads books his whole life should have to pay for the guy who sky dives drink’s like a fish is sexually permiscuous and never uses a condom ? how is that fair to the first guy at all …and then tell the first guy his taxes are going up becaseu of idiot’s like the second guy are sucking the life outta our health care system ….i say FRIK that and frik that whole situation ….govornment serves a military purpose infrastructure and garbage pick up and a few small other thing’s other than that ….they should be barley on the radar …simple stay the frik out of my life and every one elses ….twiddle i hope you understand this …again i see your point and i understand it ..but sorry man free innocent people should not be criminalised or vilified …at the hands of the real thug’s it is not fair …hope you can see my point ..we are now living in a world where you ARE GUILTY UNTIL PROVEN INNOCENT if you can .
Paul in calgary.
Time to start buying gold. Wonder how long before we see that becoming illegal to own. Sounds like the Return of the Great Depression!!!
The Gold Standard seems to come and go at the whim of a gov’t…be wary
Twiddle, your comments are right on the target. A free market system should function with rules that apply to all and not with exceptions for the most wealthy and powerful. Otherwise one has a perceived unjust system that invites radicalism and corruption through out.
Thanks, Kate, for posting this. I’ve been leaving hints in Reader Tips for a while to visit zerohedge; it’s my second favourite site.
If you read the comments to this article, you’ll see that many people are discussing moving out of the USA, lock, stock, and barrel. They talk about ways to move assets that can’t be tracked, and much of the talk centres around gold. After all, $100,000 of gold weighs less than 20 lbs, so how hard would it be to move a couple of million out bit by bit? The US may be able to track what you have in Swiss bank accounts and brokerages, but they can’t (yet!!) snoop into your Swiss safety deposit boxes.
And, while Canada and the US tax global income, they do have tax treaties with each other, and with many other countries, that give you a full credit against Canadian taxes for any taxes paid to the other country. I worked in Detroit for a few years, and had the joy of filing US, Michigan, and Detroit tax returns, but I got credit for every single dollar paid in US tax against my Canadian taxes payable.
Fly – “9. Laws limiting the number of people allowed to meet in a private home. (not yet but you now need a permit to gather in public stating a specific purpose – the decision is arbitrary)”
Actually this is already happening in Arizona and California.
http://www.wnd.com/index.php?fa=PAGE.view&pageId=134125
http://www.wnd.com/index.php?fa=PAGE.view&pageId=128094
“Twiddle says it becomes a question of fairness, which raised a very big red flag. The “fairness” excuse is a cover for ensuring that no one can benefit of the thing in question. In other words if we can not all do the same, then no body should be able.”
A poorly devised attempt at spinning my words to suit your argument. All I have said is that no segment of the population should have the option of evading taxes simply because it has the financial clout to do so.
Yes,I am arguing that “if we can not all do the same, then no body should be able.” Everyone who lives in a country should abide by the laws of those countries, especially in democratic states.
“While I do not have sufficient funds to warrant an off-shore bank account, I see no need to seek to prevent others from doing so, especially knowing to what extent governments will go to deprive productive citizens of their income.”
If you think the government is depriving productive citizens of their income, vote them out of power. If you cannot vote them out of power, then like every other citizen of a democratic society, you will have to accept the judgment of your fellow citizens, who either believe that the government is not going depriving productive citizens, or believe that this deprivation is warranted. In other words, when you are a citizen of a country you have to accept its laws. Or face the penalty. Or leave. You cannot simply make up your own rules and live by them – call it the tyranny of the majority if you must.
“Using terrorism as an excuse to rob everyone else is just that; simply a cover. Prior to terrorism the claim was to prevent drug lords and other criminals from profiting.”
Exactly. Hence my willingness to question whether this is something that only Obama can claim credit for. Mind you, the Europeans are for more wary of terrorism than they are of Latin American drug lords, hence their cooperation.
“I can see the next excuse most likely being the need to go after those rich people.”
A bit of a generalization since I dont understand why any country should have one set of taxation rules for those who cannot afford offshore accounts and another set of rules for those who can. If one Canadian citizen is expected, by law, to pay 40% in taxes on 100% of his income, why should another Canadian be allowed to pay 40% on 60% of his income and no taxes on the remaining 40%. If the rich feel targetted, they can vote with their feet and move to other countries. If however, they insist on using the same government services as every other Canadian, they should abide by the rules, regulations and procedures that other Canadians abide by. Is that asking too much?
“we are now living in a world where you ARE GUILTY UNTIL PROVEN INNOCENT if you can ”
Amen to that. At the same time, that simply is the way it is and it should apply to everyone equaly. No preferential treatment for anyone. And believe me, I understand what you’re saying. I think of it everytime I go through the customs charade at entry points to Canada. I realy dont know why a border officer needs to know how many tshirts I purchased in Buffalo.
“All I have said is that no segment of the population should have the option of evading taxes simply because it has the financial clout to do so.”
So… we should jail the rich? Because honestly, that’s what you would have to do make sure they cannot avoid taxes. See, the rich have the financial means to renounce citizenship, and navigate our immigration laws so they can still spend plenty of time in the country. So, go ahead, try to tax them all you want. They’ll just laugh at you as they jet off to a country that appreciates, not covets, their wealth. In the end, you will get less than what you had. But, you’ll make it harder for your less well off citizenry to leave.
See, you’ve got this whole thing turned around. You want to make the rich as subjugated as the prols, when what you should want is to make the prols as liberated as the rich. If the rich can avoid taxes, we should be able to as well.
The truth about this whole thing is that government wants your money to pay for all their pipe dreams. Remember, all those pesos you so diligently stashed away for your retirement become taxable again when you use them and who knows at what rate. They already claw back part of your CPP or OAS, (I can’t remember which) if you actually have money of your own. It doesn’t matter that you have contributed to CPP/OAS your whole career, if some government flunky decides you don’t need it then they take it back. Kind of makes saving for your “golden” years a farce, eh.
Time to start taking a Gold Maple Leaf or three with you every holiday trip and get a safety deposit box somewhere safe. Belize is usually nice this time of year.
I’ve been curious for some time as to why the U.S. International Trade data shows large amounts of diamond imports and exports every month. I think I am beginning to connect the dots…..
Raw gemstone diamonds are the currency of the arms trade, the opium trade and of corrupt dictatorships. Things that make you go hmmmmmmmm.
Further curiosities: check the breakdown by country of origin for the gem diamond imports.
“So… we should jail the rich? Because honestly, that’s what you would have to do make sure they cannot avoid taxes.”
Jail them? I’m well versed in the art of spinning an argument but isn’t that a stretch even by your standards. All I’ve said is that taxes should apply to all segments of society.
“See, the rich have the financial means to renounce citizenship, and navigate our immigration laws so they can still spend plenty of time in the country.”
Then let them. As long as it is legal and someone else is willing to give them citizenship. I should note that any income they might generate while in the US will still be taxable. So really, nothing changes. Most rich people from the US have a vast portfolio of investments in the US and their income from that will continue to be taxed. If they take it out as foreign citizens, nobody can stop them. Where will they invest it? Probably not on the Bermuda Stock Exchange. Probably on the London Stock Exchange (where their income will be subject to even higher tax rates). Its a red herring argument since any country worth investing in has a strong tax code. The rich havent been moving in droves to the Cayman islands, have they?
“They’ll just laugh at you as they jet off to a country that appreciates, not covets, their wealth.”
Name one.
“You want to make the rich as subjugated as the prols, when what you should want is to make the prols as liberated as the rich. If the rich can avoid taxes, we should be able to as well.”
Between the rich and the prols, somebody must be electing the government into power. This is the US we are talking about. Not North Korea. Dont like the tax laws. Tell your congressman. Make noise.
The problem wiht a lot of the arguments here is that you all want to live in a democratic capitalist society, but you don’t seem to understand that, in such societies, you cannot simply have everyone make up the rules as they go along. Democracies are not anarchies. Democracies are based on rules and laws that the majority of people agree on. Disagreeing with these laws doesn’t give you a right to create your own set of rules. Don’t like it? Immigrate. And pray that someone is waiting there with open arms to take you in.
9-11 was the best thing to happen for governments and corporations. They now had an excuse to implement policies that they always wanted or near wanted. Ever phone call is monitored for training or quality assurance purposes (yeah-right), movement of monies of 10 grand and up is scrutinized. When the government and corporations start blathering about the virtues of a cashless society…watch out.
“The problem wiht a lot of the arguments here is that you all want to live in a democratic capitalist society, but you don’t seem to understand that, in such societies, you cannot simply have everyone make up the rules as they go along. Democracies are not anarchies. Democracies are based on rules and laws that the majority of people agree on. Disagreeing with these laws doesn’t give you a right to create your own set of rules. Don’t like it? Immigrate. And pray that someone is waiting there with open arms to take you in.”
First of all, you don’t realize that restricting the flow of money out of a country makes emigration more difficult. So, by stating the emigration is the solution, you are admitting that such laws are illegitimate.
Secondly, I honestly don’t give a damn about democracy. Democracy is not an end, it is a means. It is a means to protect the liberty of the citizenry. The moment democracy becomes a threat to liberty, I have no use for it. And as my rights are inalienable, it matters not how many people vote to chain me.
I am free, even if the whole world declare me a slave.
Amen to that JSchuler
Gary:
Ever phone call is monitored for training or quality assurance purposes (yeah-right),
Obviously, you’ve never worked in a call centre, and you clearly haven’t listened to anyone who’s called you from a call centre. The universal comment is “This call MAY be monitored”, and it is almost always done for either quality or training.
Agents are usually scored 2-3 times a week. A supervisor silently monitors their call, and rates them on areas such as sticking to the script, politeness, effectiveness, etc. The call is scored, and if the agent is below a threshold – usually less than 90 out of 100 – he is called into the supervisor booth, and has to listen to the call while the supervisor points out errors and opportunities for improvement.
New agents will be listened to more frequently, and will be offered coaching in areas where they are perceived to be weak.
Your implication that the calls are monitored for some nefarious purpose is just laughable. What size is your tin-foil hat?
“First of all, you don’t realize that restricting the flow of money out of a country makes emigration more difficult.”
And yet people immigrate. How?
Hint: they think that they’ll be more than able to recoup the money lost because of capital controls after they move to another country. The two largest sources of immigrants – India and China – have some of the strongest capital controls in the world. Presumably, a rich man who is rich on the basis of talent and capability, will see losses to capital control as a one-off loss offset by his greater gains in the long run. That, of course, would require a little more intelligent thought than your little rant.
“Democracy is not an end, it is a means. It is a means to protect the liberty of the citizenry. The moment democracy becomes a threat to liberty, I have no use for it.”
Yeah, great rhetoric, but lets see you put your money where your mouth is. I expect you will drive on the wrong side of the road tomorrow because traffic laws trample on your right to drive however you want. And after that, I expect you will wander into a grocery store and pick up whatever you want and walk out without paying because, frankly, how dare the grocery store owner, companies and the government charge you for exercising your liberty to take whatever you want whenever you want?
“I am free, even if the whole world declare me a slave.”
Of course you are. After all you were free to choose where you would be born and, consequently, which set of laws would apply to you. Or not. Who knows?
I am all for pointless rhetoric, but be a little practical. Liberty is great in theory but it doesnt exist. Even when you have the liberty to choose, somebody else has already identified the choices you can choose from. Sadly, this is the reality of life. You cannot choose what you want. You can only choose what is available.