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Capital/Tax Controls Go Global As IRS Pursues Globalization Of Tax Administration, Targets High Net Worth Individuals
A month ago we discussed the imposition of virtual capital/tax controls when it comes to the avoidance of taxes by high net worth individuals in the US who park their money abroad. Yesterday, we also discussed that the only practical way for the administration to reduce its massive budget deficit is to target the richest 1% in America with tax rates that could potentially spike to as much as 91% according to Brookings. Sure enough, also yesterday, the IRS took the next step to create what is slowly becoming a global capital outflow prevention system, by establishing the "globalization of tax administration" in anticipation of other countries' attempts to lure America's richest. As CNSNews reports, IRS commission Doug Shulman had this to say to the National Press Club on Monday: "Through our new global high wealth operating unit we are taking a unified look at the entire web of business and economic entities controlled by high wealth individuals so we can better assess the risk such arrangements pose to tax compliance. The IRS is using our robust and evolving enforcement program that ensures that everyone pays what they owe." It is near certainty that once the system is in place, the hammer will fall on not just the uber-wealthy but middle class expats who no longer reside in the US. And since the entire world is bankrupt, all other countries will be happy to apply a game theory construct to this development so that all can share from the money extracted by those who attempt to evade what is rapidly becoming an oppressive US tax climate.
More details from CNSNews:
The IRS initiated its Global High Wealth Industry group in the fall. Schulman told an October 26 meeting of the American Institute of Certified Public Accountants that it would be part of “the globalization of tax administration,” which he called a “game changing trend” in tax enforcement.
“This brings me to another important development--a game-changing trend--the globalization of tax administration,” said Shulman.“While we are in the early stages of this work, this new unit will centralize and focus IRS compliance expertise involving high-wealth individuals and their related entities – which can often have an international component,” Shulman said. “Tax agencies around the world, including those in Japan, Germany, the UK, Canada and Australia, have also formed high wealth groups.
“Now, high wealth individuals are not your typical Form 1040 filers with a W-2, some 1099 income, and maybe a Schedule C enclosed with their return,” Shulman said. “And you cannot assess compliance among the nation’s wealthiest individuals by looking only at their 1040s. Their tax picture is much more complicated than this.
“For a variety of reasons – including valid business reasons – many high wealth individuals make use of sophisticated financial, business, and investment arrangements with complicated legal structures and tax consequences,” Shulman said. “Many of these arrangements are entirely above board. Others mask aggressive tax strategies.”
Shulman also mentioned the program at the George Washington University International Tax Conference in December.
“So what’s our game plan here?” Shulman said. “At least initially, we will be looking at individuals with tens of millions of dollars of assets or income. Going forward, we will take a unified look at the entire web of business entities controlled by a high wealth individual, which will enable us to better assess the risk such arrangements pose to tax compliance and the integrity of our tax system.
“We want to better understand the entire economic picture of the enterprise controlled by the wealthy individual and to assess the tax compliance of that overall enterprise,” he said. “We cannot do this by continuing to approach each tax return in the enterprise as a single and separate entity. We must understand and analyze the entire picture.
“Over the past few months, we have begun hiring some agents and specialists, such as flow-through specialists and international examiners, to conduct examinations of high wealth individuals and their related enterprises,” Shulman said.
“In due course, we will grow the new unit by adding examination agents and individuals with specialized skills and expertise, such as economists to identify economic trends, appraisal experts to advise on valuation issues, and technical advisors to provide industry or specialized tax expertise,” Shulman said. “We will also build new risk assessment techniques to identify high income and high wealth individuals and their related enterprises that should be reviewed holistically.”
Very soon, we expect that the animus created by the administration's media propaganda machine will slowly shift away from Wall Street, which Obama has now realized can not be touched, and any attempts to reform will result in further massive humiliation (does anyone recall the fervor with which the president announced the Volcker Rule?) and instead will start singling out those 1% of US society who are individually "at fault" for the fact that Obama and his cronies have allowed the net debt issuance run rate of America to hit $200+ billion and to guarantee that America will be bankrupt in a few years. But such is life in America 2.0: from each according to his ability, to each according to his needs.
h/t Jorgen
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Wow! Look at all the pretty dogs and ponies!
Remember the UBS "investigation" supposedly was looking at 52,000 accounts. To date tax was paid on less than half of them.
The law of exponential math dictates that compounding principle+interest cannot be (re)paid. Thus, real property & productive assets pledged as collateral are forfeited, and borrowers are reduced to a state of debt peonage.
The historical record dating back over 2,500 years is quite clear - it always turns out this way. Therefore, we can conclude that systemic failure is a design feature, and reject & abandon any remaining vestiges of hoocoodanode.
Once one clearly understands that the entire economic (and national) cycle of birth to death is known in advance, then it merely becomes an exercise in plotting specific data points to chart our respective progress.
The mass transfer & socialization of private losses to the public sector was just one step along this path. There are many more to come, including various proposals to institute austerity measures & increase taxes in a futile effort to pay off sovereign loans owed to money-lenders.
Ultimately, the system will crash, resulting in riots, social chaos & war. All are recognized as inevitable & have been adequately hedged, with appropriate safe houses established to ride out the storm(s). Citizen pledges of converting to gold & defending one's rights via the 2A have all been anticipated and are included in various contingency plans.
Confiscation, expulsion, even attempted extermination have never been able to defeat the credit-money system; it always returns as if resurrected from the dead. The real challenge, the ultimate game within the game, is to defeat the credit-money system.
What was the middle part?
"institute austerity measures & increase taxes to pay off loans owed to money-lenders."
At some point, people will pay no more.
RC, lay out any set of contingent circumstances, including your comment (with all due respect, duh):
Now, think through the various scenarios that this act(s) and others will initiate & commence.
If you knew in advance, and in fact were trained from a very early age the truth of the matter, that these types of refusals & protests were merely data points to be plotted along an arc, would any of this be a surprise to you?
Of course not. It's like charting a child's growth on a scale hanging behind their bedroom door. In other words, it's simply a means of recording various benchmarks and significant milestones in their personal lives. On a global economic scale, rather than saving for a college fund, the processes include various hedges and protective measures.
However, before we get too far ahead of ourselves, here's a preview of the next stages in our little saga, originally written over 2,000 years ago in Nehemiah 5:10-11:
In other words, this is where we engage not only in debt repudiation, but refuse to hand over the various underlying assets pledged as collateral. Iceland recently passed a referendum endorsing the exact same set of procedures. What comes next is penury as the population is cut-off from further credit.
Still, Iceland is a very tiny island-nation, so it really is literally a tempest in a teapot. It becomes oh so much more interesting when large, nuclear weapon equipped nations begin contemplating the last remaining resources available for consumption.
At some point, PEOPLE WILL NOT BE ABLE TO PAY AT ALL.
Well said. But I doubt the game can ever truly be defeated. Does one ever vanquish evil entirely? It will come back over and over again. The profits offered by it are simply to great and the memory of the masses of the horrors will fade with time. Even laws written in stone can be worn away with the passage of time.
a debt jubilee would be an interesting wrench thrown in... but that's the stuff of movies and wishes
...or even widespread legalization of weed... that could make for some interesting spending changes for joe bongtoker
that's the plan.. sedate the superpower into a permanent buzz to quell all those nasty riots - just make sure the muchies isles are always full and plenty of food stamp SNAP cards are maxxed out for the public
Systemic failure is a design feature of a fiat currency regime..its that easy in my mind..
Actually, systemic failure is a design feature of any credit-money system. Both fiat in leiu of hard (gold) money and fractional-reserve lending are merely accelerants to an already highly volatile & unstable system.
So, once one understands that our credit-money system is no different than an automobile's planned obsolescence, why is there any surprise now that various "repair bills" are coming due? That is, who is surprised when the alternator goes out, or a new transmission is required?
Likewise, what's up with breathless announcements that Greece cannot cover its sovereign debts, or that the US is going to enact radical tax increases and implement capital controls to further entrap & enslave its populace?
Who cares if various individuals & groups vow to store gold & exercise their 2A rights of self-defense? Yawn; so predictable. It's not like this same exact pattern of behavior hasn't been repeated countless times over thousands of years. The power elite merely wish to be awakened when these puny cries amount to a movement. Then they will be able execute their trading strategies at that juncture.
This is all known in advance by those who were trained at a very early age to forgo productive enterprise and focus on taking their rightful place amongst the power-elite. The challenge for those who wasted parts of their lives chasing the prize (ie studying hard, getting a "good job", paying taxes, ad nauseum), only to finally wake up & figure out the game, is to quickly accelerate the learning process so that they too may be able to front-run various global social-economic trends.
Once you have the plot line, it's all rather very simple.
in so many less words....any system is inherently unstable and chaotic...each system has different levels of instability with fiat being far more chaotic and advantageous to those who prey on the sheeple. bar none...with that being said, the current system is far too complex to sustain itself. maximum entropy is here.
Nice Puppy, your hypothesis assumes that there is an all-seeing illuminati - a society of well-educated evildoers, dedicated to maintaining the system that serves their enrichment. What if we are all pawns in the game - even the Uber wealthy - and are simply along for the ride and the true evil is not the players but the system itself? Might capitalism itself be evil?
I reject conspiracy theories like the Bilderbergs, Illuminati, etc for a very simple reason: there isn't any need for various groups to act in concert. Once one understands the truth, each is free to pursue the same objectives. That they appear to correlate is merely a function of the outsiders' perspective.
Here's an analogy I find highly useful: when a large storm forms in the S Pacific off New Zealand during their winter months, within 6-8 days, large waves will come ashore in SoCal. Thousands upon thousands of surfers will have made various arrangements to be where they think the surf will be best.
No one will have met; there will not have been mass coordination via phone, email & IM. And yet at all the best summer spots (Malibu, Trestles), there will be zillions of guys hatin' on each other, while to an outsider, it may appear to be one massively coordinated surf party.
Now why is this? Simply because if one understands cause->effect in any particular hobby or field of interest, those who study & follow specific events know the eventual outcome(s).
If you're a bankster, no one has get together & concoct devious plans and/or explain what happens after a massive credit explosion. The exact same fucking sets of events repeat themselves, and have done so for thousands of years. To outsiders & the uniformed, it may appear to look all very evil. To insiders, it's just human nature playing out its unending cycle of birth->death on a grand, global national/economic scale.
If you do not believe there was collusion in the banks, you are not very bright. The biggest banks had a private meeting just before Lehman went under. Read the statement over 100 years ago in the congressional record outlining the ABA (American Banker's Association) statement that they would stop all loans and then foreclose on the properties and farms.
That was over 100 years ago, I would think sophistication has only increased. If you pull back the curtain on the Wizard of Oz you will see that many of the entities you believe are separate are actually owned by the same families with different corporate shell fronts.
For example, the Fed is owned by the largest banks. Therefore it answers to the largest banks based on the principle of maximizing shareholder wealth. Originally JP Morgan was thought to be the primary force in his bank, when he died there was a surprise - he only had a small minority share and a European banking family was the primary owner.
I have a question for you, what is the "New World Order"? I didn't make the phrase up but individuals like GB Senior, Kissinger, Rockefeller, Brown, and many others have continually refered to it as if they know exactly what they are bringing into being. They are clearly not talking to us since they are not defining it for us, but it is more for others in their ilk.
I am only using inductive reasoning. Observation, pattern, tentative hypothesis, theory. I have observed a leader on a global stage repeating the phrase "new world order" - you can see these on youtube if you have missed it. I have further observed different leaders saying the same thing (pattern), and had a tentative hypothesis regarding how the world actually works and the spreading of agendas. Controlled media simultaneously pitching "global warming", "global H1N1", "global terrorism", and "global sovereign debt crisis" all lead to the need for "global governance" - world government.
Let me ask you another question - if terrorism was a real significant threat, why is border control along the Mexico border so relaxed? Here the Kissinger quote is so telling, where he talks about the fear of the unknown and that individuals will gladly relinquish their rights to the world government that will provide them with safety if they feel threatened by an unknown danger - whether real or PROMULGATED.
I have just described for you the very real collusion taking place to institute world government. Tools include the military, global banking, global corporations, false flag operations, and created global hoaxes in order to scare populations into accepting global solutions that reduce their sovereignty and individual rights. It's all in the Kissinger quote. People respond most to pain & pleasure as the two biggest motivators, when politicians need the sheep to move they push one of those two buttons.
The media is completely controlled (former CIA director stated most new anchors are actually agents), and a terrorist entity if we use the actual definition of terrorism: the systematic use of terror especially as a means of coercion (political or otherwise). So if H1N1 is hyped (how many people died from it again, less than most common flu's?) for political coercion - that is terrorism.
My observation is that the money interests in conjunction with intelligence agencies run the show and develop the agendas. The world is too complex for one Alexander the Great, but it could be run by corporation / committee. The more police state the environment, the easier it is to operate a heirarchial structure with more centralized power. Not everything is controlled, but the best way to predict the future is to go out and create the future you envision.
bingo.
Jesus Christ; you know what this means ?
It means Alex Jones was right all along (more than 10 years).
I wrote the guy off as a kook for his 9/11 conspiracy theories until I watched "The Obama Deception." Some seriously eye-opening stuff there.
Try reading Webster Tarpley and his un-authorized Obama biography. DL it from Scribd.com. It's free. Shocking stuff indeed.
Thanks, Cheeky! I'll do that.
thx
I thought the same thing too at first but then realized he is just a "Shock Jock". But yes he does have some very good information.
There is a green book on this topic from the US Treasury (I think). It came out about a year ago and was covered in Zero Hedge. For the sake of taxes, anyone in any country that is holding a US security (stock certificate, bond, etc), is for the sake of tax collection, a citizen of the United States. As such, their ENTIRE estate is subject to US taxation. Switzerland was very very unpleased by this US position.
Please elaborate.
Here is some light reading: http://www.treas.gov/offices/tax-policy/library/grnbk09.pdf
US to world: Your money is belong to us
Public consumption. Until I see Hank Paulson turning tricks in the alleyway this is all just bullshit.
And people think that China won't let its citizens leave the country. In fact, they are free to leave...after depositing a sum of money with the authorities. You know...just in case they don't come back. I guess the O administration really has learned something from Mao.
Still, I don't understand how this squares with the new globalism movement.
While I, in general, agree that some aspects of Sovereignty are mutually exclusive at best and at worst induce conflict among various sovereign entities; it is important to understand that Sovereignty is not an artificial sociological concept as is globalization, but a concept which has as its underlying component cultural identity of a broad quantity of individuals. One can not just forget all about cohesive bondage among individuals which nations consist of and force them to forget what separates them from other such groups of people. The best example of conflicting nature of globalization are the wars in Iraq and Afghanistan and it will only get worse as the progress of unifying the World various cultural identities marches toward a one single artificial no-culture super-culture. While I also agree that religious fundamentals need to be disregarded when it comes to governance they are important as an expression of unity and cultural [maybe even political] individuality. While some may say that this march toward one global entity can only be viewed from an economic side of the isle that is simply not true. To some the words " We are here to bring Freedom and Democracy" may sound a little more than a rhetoric caricature with the goal of winning the hearts and minds of those who are "liberated" believe it is not so. Democracy, for the lack of a better word, is THE best political arrangement, but not for you, but for those on the top simply because there is not need for turbulence, insecurity or conflict when one wishes to push things into its favor. I do not wish to prolong this post more than i already have so in conclusion i will just say that this is one of the first steps in the process of fully integrated world which TPTB believe will finally bring global peace and prosperity to all for many millenia. Only it will not for the reasons i mentioned earlier. Dark Ages are ahead of us, but not because of the economic collapse or something else [surely; that will contribute], but because the suppression of cultural differences and national identities will bring on to the scene a conflict never seen before in the history of mankind. And I am not sure there will be anyone left to talk or write about it. Eternus Pacis pro Totus quod Usquequaque indeed.
In the face of this onslaught we must embrace our individuality as if our lives depend on it, because it does.
Every last person on this planet must come to understand that they are a Sovereign individual, a nation unto themselves, beholden to no one and nothing, except for themselves. This is not to say that we should all become greedy and selfish, but in our own individuality we find our humanity, and having recaptured that humanity for ourselves, we will begin to see it in others.
We have the power to change this. We as in Me and You and everyone around you, if you will just accept that power and the responsibility that comes with it. There is no government power. It is a facade. Government power is derived from your consent. You've had the control all along, you just forgot how to pull the levers.
Come on, People, wake the FUCK UP!!
I am Chumbawamba.
I am Cheeky Bastard and I approve this message.
+100000000000000000000.34
OK. I would really like to know who the shadow "junker" is. On this site? WOW.
Chumby, I agree, e.g. Tom Cryer Esq. took up a bet to find the law about mandatory income tax payments to the IRS/gov. He could not find any and stopped paying his income tax. The IRS went after him and he was acquitted by a jury of his peers. This took a toll on him financial and physically (heart attacks). I like what he said, paraphrase ("If we go in one by one to battle the beast, it will devour us. But if we go in to fight the beast together we will win") The truth is on our side. Yet look at Erwin Schiff, smart man, the "just-us" system railroaded him and he is spending twelve years in fed prison in his 70's. I honour there men and look at them as unsung heroes in this battle for our individual sovereignty. http://www.truthattack.org/jml/index.php
Wegelin Bank (one of the oldest Swiss banks) did a client newsletter last year on the subject, basically saying that this was the direction that the US is moving in. It doesn't surprise me. They're going to go after the "low hanging fruit" the large easy targets. Sovereigns need revenue, and countries are going to try lots of marginal strategies.
We also shouldn't preclude the possibility that the US populous will go in the wrong direction, "eat (all of) the rich!" thereby destroying the recovery (capital investment funds which would create the new businesses after the final currency event (final crisis) that is a foregone conclusion at this point.
Here's their latest if anyone's interested: http://www.wegelin.ch/download/medien/presse/kom_269en.pdf
Thanks for posting always a good read.
It's amazing how out of one constitutionally questionable activity a whole enterprise can spring forth and blossom and never be called what it is.
It's like planting some seed you found wondering what pretty flower it will bring only to realize in the spring that it's a venus flytrap.
If it was only a venus flytrap, which is a relatively vulnerable plant that only eats small insects, it would be great.
Think "kudzu". The "financial engineering" planted in our leading financial universities has been more like "kudzu" taking over everything killing growth that is useful.
Poison Ivy. Even a chance encounter will leave you miserable for weeks.
I am Chumbawamba.
or some shitty shwag...
Tomorrow at 11:00 AM the President of the Federal Reserve Bank of Richmond is speaking at West Virginia University and taking the students "tough" questions.
I, as a student at WVU and religious reader of Zerohedge, would like to ask the Zerohedge community for a list of "tough" questions for Mr. Jeffery Lacker.
I will be given the opportunity to ask any and all questions. What should I ask him?
Any questions would be greatly appreciated.
Thanks ahead of time. Let's come up with some good stuff.
1. Ask them how the Fed would react when a state would near a default like Greece does in the EU community.
For example California.
Would there be a bailout? What about other states? Would the Fed be involved?
Like say a state would default:
- What would be in your eyes be the first cost cuttings to be done when you already count in that every public service is already stripped to the bone. If any service would need to be sacrificed, which one would it be first? Health care? Schools? Police? ...
2. People say the bank bailouts are the true reason of the crisis to come. government defaults.
And if he says that will never happen in America: why are you so sure it can't?
1) How many BJs has he given at 85 Broad?
2) How many BJs has he given at 33 Liberty?
Where should we start...
Can you pour piss out of a boot if the instructions are on the bottom?
What is money?
What is fiat currency, and what the hell is so damn good about it?
Why the hell aren't we on a gold and silver standard?
What is inflation, and why is the gubmint fudging CPI data to make inflation "disappear"?
Why has the fed devalued 95% of the worth of the dollar over the past few decades?
Why doesn't anyone want to buy US debt?
If nobody is buying US Debt, then how is it that US debt is being bought?
Where's the beef?
Where's the gold?
Where's the GDP?
Why does the fed think that a high debt to gdp ratio is the bomb?
Why are the only jobs created or saved in the public sector?
Why is the Fed making the same stupid mistakes that they made in the 1930s?
Keynes is dead. Why are you giving mouth-to-mouth to a corpse?
How many trillions are in a banker's dozen?
How many nations in the history of the world have recovered from extreme debt ratios, and why would it be any different for the US?
What's the approximate print speed of a US printing press?
Are you going to donate a printing press to California, or just print it for them?
What's the approximate flight speed of a euro sparrow? Is it a Phoenix, or a Dodo? What's the US?
1) Is the dollar a federal reserve promisary note.
2) Can I write promisary notes to pay off my debt?
3) How is credit created by a bank?
Ask him these questions:
1. Does the government need to tax in order to spend.
(Answer is no. With free floating nonvertible currency, the government can print/electronically generate as many dollars as it wants. When one pays taxes, the government just electronically marks the payment on its books - your bank account shows less and the Treasury account shows more. Now when the government decides to build that bridge to nowhere, is it using that money that was yours and is now at Treasury. Not really. If you paid your taxes in USD, Treasury would take them, give you a nice note crediting you for your payment and they would then shred the USD. So what is the essential purpose of taxation. If the PTB understood monetary policy, they would use taxation simply as a monetary toool to control the temperature of the economy. Lower taxes when economy is slow and tighten when the economy is strong. At the moment we are doing the exact opposite - we are raising taxes when the economy is week. Also, the only reason why we use the USD is because the government requires us to pay taxes in USD. If they did not require that thye USD would not have much use. Whatever the government decides it wants to become the instrument to pay ones tases, that instrument becomes the currency.
2. Do bank's use reserves or deposits to finance lending.
(Answer is no. The Federal Reserve operates in a way that permits banks to acquire the reserves they need to meet their requirements from the money market, so long as they are willing to pay the prevailing price (the federal funds rate) for borrowed reserves. Consequently, reserve requirements currently play a relatively limited role in money creation in the United States. In other words, the required reserves play no role in the credit creation process.
The actual operations of the monetary system are described in this way. Banks seek to attract credit-worthy customers to which they can loan funds to and thereby make profit. What constitutes credit-worthiness varies over the business cycle and so lending standards become more lax at boom times as banks chase market share (this is one of Minsky’s drivers).
These loans are made independent of the banks’ reserve positions. Depending on the way the central bank accounts for commercial bank reserves, the latter will then seek funds to ensure they have the required reserves in the relevant accounting period. They can borrow from each other in the interbank market but if the system overall is short of reserves these “horizontal” transactions will not add the required reserves. In these cases, the bank will sell bonds back to the central bank or borrow outright through the device called the “discount window”.
At the individual bank level, certainly the “price of reserves” will play some role in the credit department’s decision to loan funds. But the reserve position per se will not matter. So as long as the margin between the return on the loan and the rate they would have to borrow from the central bank through the discount window is sufficient, the bank will lend.
So the idea that reserve balances are required initially to “finance” bank balance sheet expansion via rising excess reserves is inapplicable. A bank’s ability to expand its balance sheet is not constrained by the quantity of reserves it holds or any fractional reserve requirements. The bank expands its balance sheet by lending. Loans create deposits which are then backed by reserves after the fact. The process of extending loans (credit) which creates new bank liabilities is unrelated to the reserve position of the bank. see billyblog for more understanding.
rhammer1
Some good info for tommorrow
http://hiwaay.net/~becraft/mcfadden.html
http://www.truthusa.org/articles/fed/calltofed.htm
http://www.petitiononline.com/fedres/petition.html
By lumping together dentists who make $150M with Goldman Sachs traders who make $150MM, the US Treasury is paving the way for the super-rich to completely destroy the middle class - in the name of helping the poor.
When tax rates go up - and they will - all those people who took out loans for their homes (jumbo mortgages) and businesses will find that there's no way to pay both the debts AND their elevated taxes.
The super-rich pay cash and won't be affected. They're not struggling to service debt. They can make even more money by knowing how and when to go short. The poor don't own any assets, and actually benefit from asset deflation. Its the poor schmucks we used to call the "middle class" or "upper middle class" who get wiped out here.
Its not the super-rich that are carrying all the debt, but the 'well off.' Its those people who worked hard, saved money, built a solid career or business, started a family, borrowed money for a home or to expand their business ... THOSE are the people we have chosen to single out and destroy. Brilliant.
By raising their taxes, the IRS can force them into bankruptcy. And that allows the banks to swoop in and seize their assets (homes, businesses, farms ...) HA HA HA HA !
To add insult to injury, watch in horror as these same people try to liquidate assets in a desperate attempt to pay off their creditors and tax collectors. They will find, in large measure, that all the "assets" they thought they owned - and that they slaved away for for 50 years - have no value. HA HA HA HA HA HA HA !!
"Sorry folks, all that money you "invested" in stocks, bonds, mutual funds, annuities, insurance policies, etc is GONE. You got tricked fair and square, and now its time to move on."
- Barack Obama. November, 2010
Got a cite/link for the Barry Oreobama quote? No Google results on it.
Yup, that would be 2010, April 13. Madcow. "http://www.zerohedge.com/article/capitaltax-controls-go-global-irs-pursu..."...
Damn, gotta get some sleep . . . I see, November 2010! Funny.
Yes, and the sad part is, the current upper-middle class and new money lower-upper class thinks they're going to survive intact.
Surely there is an opportunity for some enterprising, reasonably stable country to opt out of of this system and invite capital to come and stay where it's well treated. I understand that there would be penalties but at some level the positives have to outweigh the negatives. I'm surprised Switzerland has recently allowed itself to be slapped around by a bunch paupers in this regard. They are in a better position to be dictating terms I should think.
And as I've pointed out before, with the right change of management, Cuba is uniquely positioned in the marketplace to take advantage of (particularly America's) woes.
Anyway, this plan will never work. It amounts to achieving world peace through world taxation. Two pipe dreams in one hookah.
You are correct, many foreign banks will refuse to comply. The net result however is they will also refuse to do business with U.S. citizens. No bank account, no capital transfers. The uber-wealthy of course will not be affected.
...and that is when the answer will become military in nature - covert or overt.
The US military has more than the necessary capacity to take out those regimes before anyone catches wind of it.
Just had to piss away all my hard-earned money in taxes, and I'm mad as hell.
Time for a Revolution.
Is poor turbo tax timmy going to have to kicks his own ass for not paying taxes on his IMF money? Or are we gong to maintain the old enforcer class enforced class strategy.
Turbo Timmy is a piker. Skeletor aka hank paulson paid zero tax on $750M.
Like the UBS settlement agreement, individuals seen as "not at risk for tax evasion" will be excepted. All elected and appointed royalty, like TurboTaxTimmy, are excepted from compliance. (It doesn't matter if they actually evade, they are "deemed-not-at-risk".)
I won't shed a single tear if ppl with 9-figure income pay at least at the rate that i'm paying from my 6-figures. i can't hide my short-term cap. gains, neither should they. same goes for 15% carried interest.
Viva La Revolucion biatches!
"I won't shed a single tear if ppl with 9-figure income pay at least at the rate that i'm paying from my 6-figures."
The 9-figure crowd has separate rules, bought and paid for. You however will be hoisted by your ankles and shaken until no more coins fall out of your pockets. Oh, and if you had any thoughts of leaving the premises, they're working hard to make sure there is no place to go.
Why do I doubt that the Rockefellers (who control many 9 figure trusts) won't be paying a "combined" tax on all of the assets they control. Nor will Buffett, Soros or any of those other dried up old vampires. I can see pro athletes, maybe some Hollywood types (or other like dummies) getting very publicly gouged on this because they didn't have the proper corporate veils. Remember, the Supremes declared that corporations are people too (in the worst possible sense).
I think a great deal of this has already been acomplished. consider
this report from BIS chart 6A page 20
http://www.bis.org/
Monetary and Economic
Department
Detailed tables on provisional
locational and consolidated
banking statistics
at end-September 2009
Bottom line is that through September of last year Swiss banks dropped $300billion of foreigh deposits. That number is stale. I hear it is ~$500b since the rucus started 18 months ago.
There is plenty of hot money left in Switzerland, but very little of it is US money. After the UBS thing every bank in Switzerland quietly closed the account of their US customers. That window is closed.
Timmy G and his pals at Treasury are looking under the mats for a dime. It is unlikely they will find one under this mat. But it looks good on the MSM.
The IRS sends agents from the Hong Kong office into Beijing to audit U.S. citizens.
Butch Cassidy: Do you believe I'm broke already?
Etta Place: Why is there never any money, Butch?
Butch Cassidy: Well, I swear, Etta, I don't know. I've been working like a dog all my life and I can't get a penny ahead.
Etta Place: Sundance says it's because you're a soft touch, and always taking expensive vacations, and buying drinks for everyone, and you're a rotten gambler.
Butch Cassidy: Well that might have something to do with it.
{There are two ways a man goes broke}, 'slowly,and then all at once'.
-Ernest Hemmingway
'There was a crime. There was a victim. And there is punishment.'
-Rusty Sabich
'There is no sadder sight than a young pessimist.'
-Mark Twain
"Comrades! You do not imagine, I hope, that we pigs are doing this in a spirit of selfishness and privilege? Many of us actually dislike milk and apples. I dislike them myself. Our sole object in taking these things is to preserve our health. Milk and apples (this has been proved by Science, comrades) contain substances absolutely necessary to the well-being of a pig. We pigs are brainworkers. The whole management and organization of this farm depend on us. Day and night we are watching over your welfare. It is for your sake that we drink that milk and eat those apples. Do not imagine, comrades, that leadership is a pleasure. On the contrary, it is a deep and heavy responsibility. No one believes more firmly than Comrade Napoleon that all animals are equal. He would be only too happy to let you make your decisions for yourselves. But sometimes you might make the wrong decisions, comrades, and then where should we be? The importance of keeping the pigs in good health was all too obvious. So it was agreed without further argument that the milk and the windfall apples (and also the main crop of apples when they ripened) should be reserved for the pigs alone."
-Squealer (Animal Farm)
APRIL 13, 2010, 7:31 AM ET
blogs.wsj.com
By Kathleen Madigan
Economists may be debating when the recession ended, but small business owners report little pick up in their sales or confidence in March, according to a report released Tuesday. The weak readings explain why small businesses remain reluctant to hire.
The Small Business Optimism Index lost 1.2 points to 86.8 in March, said the National Federation of Independent Business.
The NFIB noted that nine of the 10 components declined or failed to contribute to an increase in the top-line index. The lone improvement came in the subindex covering expected business conditions. It rose 1 percentage point to -8%.
The report said 34% of respondents said “weak sales” were their top business problem. The subindex on earnings trends fell 4 points to 43%, and sales expectations subindex dropped 3 points to -3% in March.
The drop in confidence among small business owners comes as economists are debating when the recession ended. The National Bureau of Economic Research said Monday it was still “premature” to set a date for the economy’s trough. The NFIB reports suggest that while the overall economy is growing, pockets of pessimism remain.
AM Here : Holding the comics up to the light tis clear that the NBER believes that 'Employment, inflation, productivity, GDP, and other sundry stats are massaged into irrelevance' (AM Rule #2), as evidenced by their commentary that 'in examining the behavior of domestic production, we consider not only the conventional product-side GDP estimates, but also the conceptually equivalent income-side GDI estimates.'
As previously mentioned on this blog :
(King Report)Per John Williams: Gross Domestic Income (GDI)" is the theoretical equivalent to the GDP, but it is not followed by the popular press. Where GDP reflects the consumption side of the economy, GDI reflects the offsetting income side. When the series estimates do not equal each other, which almost always is the case, the difference is added to or subtracted from the GDI as a "statistical discrepancy."
Although the BEA touts the GDP as the more accurate measure, the GDI is relatively free of the monthly political targeting the GDP goes through.
"Gross National Product (GNP)" is the broadest measure of the U.S. economy published by the BEA. Once the headline number, now it is rarely followed by the popular media. GDP is the GNP net of trade in factor income (interest and dividend payments).
GNP growth usually is weaker than GDP growth for net-debtor nations.
Games played with money flows between the United States and the rest of the world tends to mute that impact on the reporting of U.S. GDP growth.
The Street, US government and financial media reported and followed GNP until 1987 because at that time the US turned from a net creditor to a net debtor; and GNP sank on the outflows of cash.
GDI fell far more sharply in the teeth of the recession, dropping at a 7.3% annual rate in the fourth quarter of 2008, and 7.7% in the first quarter of 2009. GDP, in comparison, fell by 5.4% and 6.4%. Moreover, while GDP showed the economy began to grow in last year’s third quarter, GDI showed it continued to contract.
AM here:Or in other words: 'Mr. Hand's strong dollar policy is the chimera of currency debasement masquerading as America's wealth exporting machine that is regularly promulgated by our leaders as an exceptional example of America's resiliency.' (AM Rule #5)
A rose by any other name doth smell less sweet. Rosy numbers and numbers rasa. GDI is an elephant in the womb. As is unemployment. Unemployment levels and changes thereof also play a major part in defining expansions and recessions. We all know that reported unemployment numbers are skewed but what is absolutely never reported in the MSM is that empirically employment levels are now WORSE than the WORSE levels of the Great Depression Volume 1.
During the First Great Depression the Unemployment Rate peaked at 23.53% in 1932, 24.75% in 1933 and 21.6% in 1934.( Source :U.S. Bureau of the Census, Historical Statistics of the United States, Colonial Times to 1957)
Back in those days, before the Federales massaged the relevancy of statistics into the pablum narrative rabbithole it was pretty simple to calculate the unemployment rate.
In 1932 there were 12,060,000 unemployed out of a labor force of 51,250,000, returning 23.53%.
In 1933 there were 12,830,000 unemployed out of a labor force of 51,840,000, returning 24.75%.
In 1934 there were 11,340,000 unemployed out of a labor force of 53,140,000, returning 21.60%.
Of course back then the labor force grew, now we bid the unemployed adieu.
And back then the labor force was 'defined' a tad differently.
From the Congressional Research Service's : The Labor Market during the Great Depression and the Current Recession.
The 1940 census of the population was the first statistical undertaking to include questions on the labor force defined as persons who are employed or without jobs but actively seeking work within a prescribed period of time. Before then, the 1930 census of the population, the 1937 census of unemployment, and the occasional survey conducted in various states and cities utilized a very different concept—the “gainful worker”—that is, individuals who had at some time worked in an occupation in which they earned money or the equivalent, or in which they assisted in the production of marketable goods.
With passage of the Fair Labor Standards Act (FLSA) in 1938,the age limit for employment in manufacturing industries was raised to 16 years, which effectively reduced the number of job opportunities for young persons. This, in turn, might have prompted some teenagers to refrain from entering the workforce and instead, remain voluntarily in school after reaching age 14.
The increase in unemployment was greatest among young workers. The number of unemployed 14 to 24 year olds rose by 251% between 1930 and 1940. The Fair Labor Standards Act (which prohibited 14-and 15-year-olds from working for manufacturers) effectively limited the job options of the very youngest workers as well.
AM here : Was under the impression that in the First Great Depression the Unemployment Rate counted everyone over the age of 16 that did not have a job. In a previous entry had stated: In 1916 the Child Labor Act passed, setting a national minimum age of 14 in industries producing nonagricultural goods for interstate commerce or for export and the Keating-Owen Act passed, forbidding the transportation among states of products of factories, shops or canneries employing children under 14 years of age, of mines employing children under 16 years of age, and the products of any of these employing children under 16 who worked at night or more than eight hours a day.
It would appear though that prior to 1938, there were a lot of unemployed 14 and 15 year olds that were included in the unemployment rate.
That makes the following study even more frightening.
It speaks for itself: the first column represents 12/07 and the second column represents 12/09.
Center for Working-Class Studies at Youngstown State University
DE-FACTO UNEMPLOYMENT RATE
Officially Unemployed 4.9%, 10.0%
Marginally Attached .8%, 1.5%
Discouraged 02%, .05%
Underemployed 3.1%, 6.0%
Excess disability 6.0%, 6.0%
Government programs 4.0%, 4.0%
Subtotal 18.52%, 28.35%
Definitions:
Officially Unemployed- Persons who worked less than one hour during the nationally determined reference period (one week), looked for during this period, and were available for work during this period.
Latent Job Candidates
Marginally attached workers - Persons not in the labor force who want and are available for work and who have looked for a job sometime in prior 12 months (or since the end of their last job if they held one within the past 12 months), but were not counted as unemployed because they had not searched for work in the four weeks preceding the survey.
Discouraged workers - Persons not is labor force who want are available for a job and who have looked for work sometime in the past 12 months (or since the end of their last job if they held one within the past 12 months)
Underemployed -Persons who would like to work full-time but are not able to do so for economic reasons such as unavailability of full-time work or reduced demand for hours by current employer
Excess disability - Persons who are excluded from labor force because of sick leave or early retirement
Government Programs - Persons receiving government subsidized or government provided programs. For example, low wage workers receiving Earned Income Tax Credits
These estimates may be low given what has happened in the economy and the lack of current data. For example, individuals going to colleges and universities have increased dramatically during the current recession/regional depression but are not counted as part of labor market
AM here: Kids say the damnedest things don't they?
And its' the kids that we should be worried about, the nascent buster generation, the potential generation zero.
A German trading partner, who had recently returned from a trip to the Fatherland, told me that he has noticed several changes lately : 1) Not as many big cars on highways most new purchases seem to be for smaller and cheaper vehicles ; 2) Almost obsessive focus on economy and finance ... dominates small talk; 3) A general malaise on the big picture but satisfaction on ones' current situation with more focus on simple pleasures ... summarized by a 'could be worse' attitude... is that todays' optimism?
The truth sublime Mr. Twain, for you humble blogger hears the same pessimism among the youth here.
The Anglo version of Donaudampfschiffahrtsgesellschaftskapitän preparing for River Styx?
There was a crime (banksters too bankrupt to go broke), there is a victim (those not members of the Nancy Capitalist Club) and there is punishment (a DeadHead Economy as we navigate the black diamond demographic slope on the backside of Sugar Mountain).
There is no serotonin boost to being pessimistic, would much rather trumpet hope and short despair. But dismissing realities and ignoring history does not elicit an empirical conclusion that we'll avoid repeating what looks to be a quantum can of whoop ass reversion to the MEAN.
The importance of keeping the pigs in good health was all too obvious to our top-down strategerizin' Federales.
So it was agreed without further argument that the milk and the windfall apples (and also the main crop of apples when they ripened) should be reserved for the pigs alone.
But the band of The Hand can only conjure a Potemkin demand. Organic wage growth, absent for the last decade, comes from ... wait for it ... the productive allocation of capital when a free market pins winners and chooses losers.
That's why small business are crying give me customers or give me debt. But, no debt for you! the windfall apples need be reserved for the more equal brainworkers!
Phat, Plummed and Cupid is no way to go through strife Mr. Hand.
The insouciance of elites and the Antoinette economy...
This ends in tears or (hopefully not) fireworks.
In the Helvetic republic it is virtually impossible to open a bank account for U.S. citizens. Renouncing the U.S. citizenship is a very difficult and lengthy procedure taking many years. Full Serfdom to the State is here and now.
You see, first they distract you and get your buy in by telling you they'll be going after the uberwealthy, so you feel comfortable in the knowledge that they will leave you alone. After they establish their global tentacles and have the means and ways and proper treaties in place to more effectively enforce their mission, then everyone else will also become subject to their omnipresent and omnipotent power.
This is a leap towards a one world corporatist government structure, in which you are a unit of production, a number in a database, on a global scale.
At what point does a society consider these steps too far? Or is the water in the pot at a nice temperature, like the piss in your bed?
It's now or never. As in, we stop this now or your children will never know true freedom.
I am Chumbawamba.
But goldman sachs is a force for good!!!
Despotism has arrived too early. People are awake. When Obamacare went in, it was like cold water in the face of Americans. The IRS Shulmans, et al., are making a mistake by having a worldwide tax structure, because Americans know what that means. It means the world elite think they can make Americans pay for the economic disparities in the rest of the world so that they can sell more products worldwide. Those folks don‘t have any money over there so how can they buy the multinationals’ products? They need tax relief, to be helped along, evened out by leveling down America’s productive middle class.
With all the potential problems, isn’t it also inappropriate to have a world tax policy when that strategy is designed by American citizens who have access to citizenship or asylum in other countries such as Israel?
For anyone wishing to understand the rulers’ viewpoint on financial politics, a regular reading of the Washington Post's David Broder is essential. This morning, Broder enthusiastically supported proposals for tax “reform” which may originate in 2011.
Commenting on a potential Senate bill, “Rather than raising taxes,” Broder writes, “it reforms them in the interest of simplification and fairness, lowering the overall rates in most cases while eliminating loopholes.”
Right. Like lowering the rates for “most” is going to raise the money that Broder wants raised because they’re in big trouble. And here’s the warning! Watch out for these words: “closing loopholes, simplification, and fairness.”
The Question: Who in the name of all that’s holy does Mr. Broder mean by “most”?
Barack Obama’s Economic Team taking your future:
Benjamin Bernanke - Chairman, Federal Reserve System
Timothy Geithner - Secretary, U.S. Treasury Department
Lawrence Summers - Chairman, National Economic Council
Paul Volcker - Chairman, Economic Recovery Advisory Board
Jared Bernstein - Chief Economist and Economic Adviser, Vice President
Douglas Shulman - Commissioner, Internal Revenue Service(IRS)
Peter Orszag - Director, Office of Management and Budget(OMB)
Jon Leibowitz - Chairman, Federal Trade Commission(FTC)
Gary Gensler - Chairman, Commodity Futures Trading Commission(CFTC)
Mary Schapiro - Chairman, Securities and Exchange Commission(SEC)
Sheila Bair - Chairman, Federal Deposit Insurance Corporation(FDIC)
Karen Mills - Administrator, Small Business Administration (SBA)
Christina Romer (Mrs. David) - Chairman, Council of Economic Advisers
2.0 implies an upgrade. Should be 0.5
It's the Bill Gate's version of versions, each progressively worse and requiring more resources before crashing.
I would find it much easier to pay my taxes if Wall Street were not "off-limits" to Obama's animus. Perhaps, if the Uber wealthy have to disgorge 90% (!!!) of their income to Uncle Sam so he can continue to support Wall Street, the Uber wealthy might relent and encourage Obama to nail the banksters.
Always looking for that silver lining.
I'm going to go out on a limb. I believe the proposal is the next step in a pervasive capital control program instituted by the federal government. I stated quite long ago that I believed that the Fed/Treasury engineered stock market boom of 2009-present was directed at preventing massive capital outflows from US enterprises and securities markets toward the coffers of rival nations previously discounted as bush-league competitors. This is new, this is big. Emerging markets around the world plus more established players like Australia and Canada and some Middle Eastern nations just to name a few present compelling and enticing alternatives to US domestic investing in the Brave New World. In fact it's almost laughable when you consider the facts as laid bare by the financial crisis: a large swath of American enterprise is seriously broke and the policy measures adopted during the crisis (TBTF, mark to model, pseudo-nationalization) serve to favor broke enterprise over new enterprise. The world has witnessed a clear, resounding and irrevocable break from Darwinian Capitalist principles that formed the bed rock of faith in the American way. The path that was chosen is one that the old colonialist powers of the world recognize all too well as the road to perdition.
This paragraph, in my opinion, is where they tipped their hand:
“We want to better understand the entire economic picture of the enterprise controlled by the wealthy individual and to assess the tax compliance of that overall enterprise,” he said. “We cannot do this by continuing to approach each tax return in the enterprise as a single and separate entity. We must understand and analyze the entire picture.
I think they mean THE ENTIRE PICTURE. That kind of talk is more of a stern warning than a contemplation. They don't just mean they'll assess taxes. They mean they want to open the books and see just where the money is going. And that is a political statement.
Well yes.
Pretty interesting how Brazil has high inflation, high interest rates, and a currency that tends to appreciate against the dollar.
But it's one more Bric in the wall where capital is being actively courted and where the growth story is compelling. I've said it before: we should revisit the idea of a "Pan American Zone" of trade and economic activity before China becomes the partner of choice. US needs to get off high horse.
After the low hanging fruit is exhausted, before the body collapses from fatigue, if able will feed on its own fat.
Tell me again why you would want to be an uber rich American citizen? Why would they invest in America with this kind of treatment? We should be encouraging investment with tax breaks. Economically the country needs to grow in order to pay debt. You do not get there by choking off investors. We cannot tax our way out of our debt.
After the meeting you should have talked to some CPAs, because many would say, "see ya in court", and "we will be probing the waters with a determination, here and there". But, this really is no different than the long history of the IRS, except it has moved into the realm of legal absurdity. The IRS always works this way. They dream something up, which statisfies the current administrations agenda, make it look possible (so they get a good raise), while at the same time crossing their fingers and toes, that it may have a chance of working.
The IRS does not make law, they make a rule. The rule will be tested in court, and until this is done, the IRS will be spending more money than taking in.
Mark Beck
"...shift away from Wall Street [...] and instead will start singling out those 1%..."
Not to worry. This 1% is also savvy and connected enough to deflect most of this.
What will happen is this will keep on moving down the net worth ladder until it finds that level, which lacks the resources, connections, and organization to resist. Some call this the middle class.
You are correct, the 1%, the people with 500 million or more in assets will find ways around this but it was never meant to stop them. This was really meant to stop the top 20% minus the 1% and below. Those are the ones who are worth 100 million or less and into the middle class. These people are the ones that have much of their money liquid sitting in banks in the US instead of the other who have been told or no better than to have their money in a country (like the US or britian) with high tax rates. They don't want the masses of the upper middle class and and the middle class who have means to start to pull their money out of the system. This makes the banks insolvent and in turn make the govt. insolvent.
Do you guys remember back in 2008 money market accounts where breaking the buck. Well I will post from zerohedge blog the story of how we almost went belly up (the US and western world economy and govt.) by 2pm if the Fed didn't increase guarantee to the MM accounts by 250,000 dollars. They said by that time 5.5 trillion would have been drained out of the US financial system if not stopped. They are trying to make sure through pitfalls and obfuscation to stop you and me and people with means from running to their bank, wiring the money from their accounts to an account they set up in another country in their currency or investment vehicle, and then leaving the country. If you don't think your a slave think again, your a slave in a gilded cage. And why have these controls if the economy is doing so good? It's because the economy isnt' doing so good and in fact is going to be doing alot worse. Look at how the markets have has low volume and a melt up from 10 points to 70 points everyday, what does that say. The people in the know are aware that this is manipulated over 4,000 point move in the dow and expect it to come down hard. Why do banks continue to fail every friday (you know the friday after market bank failures, at a bank near you). Then there's reale state, commercial real estate, unemployment, soverign debt, local debt (state bonds are going to be the implosion that will start it off in the US), etc. etc. etc..
They are setting this stuff up so when the rug is pulled and everything comes down hard, it won't be so easy or even possible to walk into a bank and have it wire your money to another countries bank and bank account (if they even allow it). They have to make sure to keep the serfs on the reservation and here in this country.
http://zerohedge.blogspot.com/2009/02/how-world-almost-came-to-end-at-2pm-on.html
You nailed it. The fly in the ointment here is the definition of “rich.”
Obama defines families who earn $250 000 and individuals making more than $200,000 after taxes as “rich,” whipping up public envy to “tax” them. If Obama has his way, there no longer will be a place in “the land of opportunity” for a young man to follow his dreams. There are no "day dream believers" in caste systems. Administration officials already are figuring out ways to limit the value of taxpayers' remaining meager “deductions” to help pay for Obamacare.
Yet, home prices still are unaffordable for couples earning $250,000 or singles earning $200,000 in the nation’s most expensive places (New York, San Francisco). But no matter to the Pelosis and the Reids. They are the dream killers.
They go like homing pigeons to where the money is. It’s not with the working poor; it’s not with the tax-evading Goldmans: the money is with America’s middle class—the engineers burning the midnight oil; the small entrepreneur working seven days a week, the professional dedicating his life to research.. If it’s necessary to call them “rich” by summing their $200,000 incomes in with Blankfein’s 2007 compensation of $53,965,418 in 2007, so be it.
But it is up to us, as you say, not to fall for it.