Senators to Unveil the ‘Ex-Patriot Act’ to Respond to Facebook’s Saverin’s Tax ‘Scheme’

[stockholmer]

61. some problems I see

Before anyone accuses me of defending oligarchs, let me reply that all one needs to do is look at my journal. I think the systemic controllers of the global banking complex (who indirectly and directly control nation states (via central banking and sovereign debt), global militaries, multinational corporations, the prison/drug/security complex, the for-profit health care/insurance complex, educational/research complex, etc etc) are the nexus of vast majority of humanity's ills in the present day world.

Is Saverin using loopholes in the system? Yes. Is he alone? No. Everyone (or almost everyone) who using any exemptions in the tax code at any level is doing the same thing. Look at the oligarch scum Warren Buffett, who avoids billions in taxes with his manipulation of the tax code, whilst falsely appearing to be a 'white knight'. http://www.democraticunderground.com/101727422#post1 Look at George Soro's billionaire partner Jim Rogers, who moved to Singapore around a year before Saverin did.

Now, onto the problems with this whole story, and its underlying memes:

1. Saverin, a Brasilian by birth, only became a US citizen in 1998. He has lived in Singapore since 2009. I still think that many many people (not necessarily on DU) think he is a natural born, US-citzen-only person who is now a 'traitor'.

2. Saverin already paid over $365 million dollars in US exit taxes, so the meme that he skated free is false. http://www.businessweek.com/news/2012-05-17/facebook-co-founder-turns-30-000-savings-to-3-billion

3. The US now has the world's highest corporate tax rate and it designed to crush your main job creators (SME's).
This tax rate is infested with so many loopholes that allow the huge corporations (GE, GM, etc etc etc) to pay next to nothing at the end of the day, whilst crushing small and medium sized firms (who employ over 70% of all Americans. This skewed tax scheme (especially when US state taxes are added in) is destroying the revenue intake funding mechanisms at all levels of government, thus hurting vital public services.

California keeps raising taxes, and each time they do, their revenues fall, as businesses and upper-middle class and above residents flee the state in droves. They are now facing a 16 billion dollar deficit http://www.npr.org/2012/05/14/152694872/calif-budget-deficit-nearly-doubles-to-16-billion that will explode furthernext year when there are large new tax increases coming that will drive out more business, and more upper-middle class and above families.

Between 1995 and 2005, http://www.financialsense.com/contributors/cris-sheridan/california-bow-titanic-united-states California gained over 10 million new residents, yet only added 150,000 taxpayers. Unsustainable.

4. The US is the ONLY industrialized nation in the world that taxes incomes of its citizens who live outside of the nation.

The reason that so many countries are now refusing to open bank accounts for any Americans is that laws such as FACTA and FBAR create a nightmare of reporting. AS the US debt grows and grows, and it becomes more and more desperate for revenue, the limits and exemptions for expat income tax, cap gains, etc, will lower and lower, until almost all expats will fall under its claw. There are over 6 million USA expats, so expect the 300% plus increase (in the last 4 years) of Americans renouncing citizenship to go up by rates of 1000% or more in terms of levels of increase. Many of these WILL NOT be 'rich' at all.


Here are just 2 examples of the US trying to shake down expats who are far, far from 'Saverin level' wealthy, including some who have never even lived in America other than a few years after birth:

Americans in Sweden suffer US tax crackdown

http://www.thelocal.se/39522/20120306/

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FBAR is the common term used to refer to what US tax authorities officially call a Report of Foreign Bank and Financial Accounts, a law which has been on the books since the 1970s, but which US tax authorities have only recently begun to enforce in earnest. Any US citizen living abroad who owns assets (checking, savings, pension, brokerage investments, life insurance, property, etc.) registered outside the US equaling a total of more than $10,000 – and that’s for all accounts, whether individual or joint ownership – is required to file an FBAR. For those living in Sweden this includes not only bank accounts and the like, but also includes items such as Coop MedMera cards, ICA cards, and Rikslunchen coupons.

Pamela's concerns about what the FBAR requirements might mean for her escalated as she kept coming across the works "FBAR penalty" as she went about completing her tardy US tax return. Previously she had always done her own taxes but to be sure she was following the requirements correctly Pamela contacted an accountant in the United States, who in turn sent her to a lawyer. The lawyer advised her that as she hadn’t filed her return on time, it meant she had undeclared income and with the current tough stance taken by the main US tax agency, the Internal Revenue Service (IRS), for non-filers of the FBAR, she should "do the math". Much to her horror, Pamela discovered that the penalty for non-compliance of FBAR is $10,000 per bank account per year, with the IRS looking back six years.

Because many Swedish banks open a new account each time a stock is bought or a fund opened, Pamela had double-digit number of accounts registered in her name. By the time she'd followed her lawyer's advice to "do the math", she found herself potentially facing a penalty in excess of $1 million. According to her lawyer, the only the way to pay a smaller penalty would be to join something known as the Voluntary Disclosure Program set up by the IRS. "Because I am fully integrated into Swedish society, I thought it would be an opportunity to explain my situation," she recalls.

But the reaction she received from US tax authorities was entirely different. "I was treated like a criminal. I was told that even in the Voluntary Disclosure Program it would be assumed I was a ‘willful violator’ of the tax laws and would need to pay 25 percent of [the value of] all my overseas assets, based on the highest balance in the sum total of all my bank accounts, retirement accounts, apartment, car, etc. over the last eight years," she says. Even the total value of Pamela's apartment was to be included in calculating the "lesser" penalty, not simply the amount remaining on her mortgage. "I was told I should be happy I was not paying the seven figure penalty. But I have never even had close to seven figures in my accounts in my life!" she explains. The United States is the only country in the developed world that requires its citizens to file tax returns if they have enough taxable income, whether living in the US or not.

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US government shaking down dual national foreigners

http://www.sovereignman.com/expat/us-government-shaking-down-dual-national-foreigners/


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There are a lot of Panamanians who, for one reason or another, have US citizenship. During Latin America’s tumultuous times several decades ago, many families with means temporarily moved to the United States so that they could watch the turmoil from their television sets instead of their living room windows. Most of these families popped out a child or two while living in the US, and, per US law, those children were automatically US citizens. A few years later, they moved back. The kids grew up in Panama, became adults in Panama, went on to take over the family business, etc. Along they way they had a number of bank accounts in Panama, owned Panamanian companies, formed Panamanian foundations, and definitely earned healthy profits. As it turns out, however, those Panamanians who were born in the US were required to file tax returns and disclosure forms annually with the IRS, as well pay the US government its “fair share” of their income. And now, with so much stink being raised about offshore tax compliance for US citizens, these dual nationals find themselves caught in a tough situation.

Most were completely unaware and were recently tipped off by their local banker here in Panama, a conversation that went something like:

“Hey don’t you have US nationality as well as Panamanian? The US government is breathing down our necks to make sure customers are in compliance. You should see these stupid regulations they expect us to follow.”

“Um… compliance for what?”

After a few uncomfortable phone calls, they find out that they’re obliged to file 10+ years’ worth of 1040?s, 5471?s, and FBARs, as well as pay steep tax bills with penalties and interest.

I have no doubt that a great many of these dual nationals are going to march down to the US embassy to renounce their citizenship. Unfortunately for them, they won’t even be ‘allowed’ to do so until they become tax compliant. It’s amazing– many of these folks have never lived in the US, have never earned a penny of US-source income, and have never even heard of an FBAR… yet literally by accident of birth, they are now obligated under penalty of imprisonment to pay a huge portion of their assets to another government despite never having been made aware of such obligations. What’s more, they can’t get out of it. They can’t even renounce this obligation without first paying off the debts that they never signed up for.

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The bottom line is that this Saverin issue is being used to try and further laws that will (just like the current corporate tax code) eventually trickle down and crush non-oligarchic level US citizens, along with further driving businesses off shore, and attempts to put forth the false idea that you can raise revenue levels merely by increasing taxes to any level deemed 'necessary' as long as it is some easily villified single individual.

The oligarchs and corporations will always have loopholes to exempt themselves, yet will demand that people far below their level of wealth 'suck it up' and take one for the team. This must change.

At some point, if this evolution continues, you will not be able to leave the country at all, either because you cant afford an ever-expanding 'exit tax' that will be broadened to the point of non payabilty via 'future-forward-looking surcharges' and lowered rates of exemptions, OR the simple fact that no country worth going to will allow you, as an American, to open a bank account.