The Current Events, News, and Politics Thread
12-30-2011, 08:14 AM
#701
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Wikipedia has an excellent article on that.
http://en.wikipedia.org/wiki/Sixteen...s_Constitution
Cliffs: Repeatedly supported by the supreme court, amendment properly ratified across 42 states, power granted in the constitution.
http://en.wikipedia.org/wiki/Sixteen...s_Constitution
Cliffs: Repeatedly supported by the supreme court, amendment properly ratified across 42 states, power granted in the constitution.
- congress cant
- congress cant
- congress cant
- congress cant
- congress cant
- congress cant
- congress cant
- congress cant
- congress cant
- congress cant
- congress cant
- (proceedure)
- congress cant
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- congress cant
- congress can
I'm just glad we don't still live in the 40s in regards to our tax dollars, where it was believed that people did not have a right to retain any of their earnings, and that everything people possessed really belonged to the government. Which was the same thought process used in the Soviet Union--that worked out well.
A few more exmaples:
Rep. Emanuel Celler (D-N.Y.)—The government can at any time make income taxes as thumping big as the necessities of war require. Thus, if any plan does not raise enough money, taxes can at any time be increased. The government always has a moral if not actual lien on all our income.
Sen. Happy Chandler (D-Ky.)—[A]ll of us owe the government; we owe it for everything we have—and that is the basis of obligation—and the government can take everything we have if the government needs it. . . . The government can assert its right to have all the taxes it needs for any purpose, either now or at any time in the future.
Rep. Wilbur Mills (D-Ark.)—The public, with money in its pockets, will inevitably try to use this money to buy what it wants, what it may need. . . . [T]o check the forces making for inflation, we must direct our tax policy toward diverting an ever larger part of the funds of persons above subsistence levels into the Public Treasury.
Compared to today's democrat/liberal/whatever you want to label:Sen. Happy Chandler (D-Ky.)—[A]ll of us owe the government; we owe it for everything we have—and that is the basis of obligation—and the government can take everything we have if the government needs it. . . . The government can assert its right to have all the taxes it needs for any purpose, either now or at any time in the future.
Rep. Wilbur Mills (D-Ark.)—The public, with money in its pockets, will inevitably try to use this money to buy what it wants, what it may need. . . . [T]o check the forces making for inflation, we must direct our tax policy toward diverting an ever larger part of the funds of persons above subsistence levels into the Public Treasury.
Sen. Elizabeth Warren (D-Mass.)-There is nobody in this country who got rich on his own. Nobody. You built a factory out there—good for you!
But I want to be clear. You moved your goods to market on the roads the rest of us paid for. You hired workers the rest of us paid to educate. You were safe in your factory because of police forces and fire forces that the rest of us paid for. You didn’t have to worry that marauding bands would come and seize everything at your factory, and hire someone to protect against this, because of the work the rest of us did. Now look, you built a factory and it turned into something terrific, or a great idea—God bless. Keep a big hunk of it.
But part of the underlying social contract is you take a hunk of that and pay forward for the next kid who comes along.
Why do all these quotes sound more like someone who believes in socialism, facsism, or communism? And not individual freedom, private property and a gov't that works for us?
But I want to be clear. You moved your goods to market on the roads the rest of us paid for. You hired workers the rest of us paid to educate. You were safe in your factory because of police forces and fire forces that the rest of us paid for. You didn’t have to worry that marauding bands would come and seize everything at your factory, and hire someone to protect against this, because of the work the rest of us did. Now look, you built a factory and it turned into something terrific, or a great idea—God bless. Keep a big hunk of it.
But part of the underlying social contract is you take a hunk of that and pay forward for the next kid who comes along.
Last edited by Braineack; 12-30-2011 at 09:54 AM.
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12-30-2011, 11:25 AM
#702
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"Fair share" is only this for me: If someone makes more than me, I should not be paying more in taxes than them.
I strongly feel that I should not be paying a greater tax burden then someone that makes more than me.
Do you agree or disagree with this, Brainy?
Now here's the shocker about the fair share argument: Okay, so the top X pay Y%. I feel the Z% I pay should be no more than Y%.
I strongly feel that I should not be paying a greater tax burden then someone that makes more than me.
Do you agree or disagree with this, Brainy?
Now here's the shocker about the fair share argument: Okay, so the top X pay Y%. I feel the Z% I pay should be no more than Y%.
For example, if you make "too much money," you cannot make deductible IRA contributions or make direct Roth contributions.
On the flip side, there are a number of lower-income tax loopholes. For example, if you are in the 15% or lower marginal tax brackets, you pay no long term capital gains taxes. Brainy touched on a few of the tax credits that are likewise not eligible to higher income earners.
"Tax loopholes available only to an elite few" is a straw man as far as I can tell - at least when we are talking about households.
Compared to today's democrat/liberal/whatever you want to label:[INDENT]Sen. Elizabeth Warren (D-Mass.)-There is nobody in this country who got rich on his own. Nobody. You built a factory out there—good for you!
But I want to be clear. You moved your goods to market on the roads the rest of us paid for. You hired workers the rest of us paid to educate. You were safe in your factory because of police forces and fire forces that the rest of us paid for. You didn’t have to worry that marauding bands would come and seize everything at your factory, and hire someone to protect against this, because of the work the rest of us did. Now look, you built a factory and it turned into something terrific, or a great idea—God bless. Keep a big hunk of it.
But I want to be clear. You moved your goods to market on the roads the rest of us paid for. You hired workers the rest of us paid to educate. You were safe in your factory because of police forces and fire forces that the rest of us paid for. You didn’t have to worry that marauding bands would come and seize everything at your factory, and hire someone to protect against this, because of the work the rest of us did. Now look, you built a factory and it turned into something terrific, or a great idea—God bless. Keep a big hunk of it.
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12-30-2011, 11:47 AM
#703
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Read:
My objection to her statement is when she says "the rest of us" she is alluding to the government, not the productive fellow taxpayer. This also make it seem like she doesn't believe the person building the factory doesn't contribute the same taxes, if not MUCH more.
Her last sentense alludes that, with the government's consent, we are allowed to keep a "big hunk" of our own property because apparently we live in and benefits from a society to whose creation many other people have contributed. Had they not "help" would they take the big hunk and leave us with the small?
She also forgots how much the factory, and the risk/investment the owner took to open it, benefits everyone else. Most importantly, the wage that the worker gets, and the taxes collected from it. Without the factory, the cycle couldn't exist, but everything else could without the government.
Other noteables; she also states:
"You hired workers the rest of us paid to educate." It can be argued that public schools don't often train the workers for the job. And Private schools and voucher programs are becomming more and more popular as public education becomes more and more costly, with no increased performance to the child.
"You were safe in your factory because of police forces and fire forces that the rest of us paid for." Police don't prevent crime, Fire forces don't prevent fires.
Summary, it's a big improvement to the arguements for the 1943 Tax Act, which is all I was getting at.
I'm just glad we don't still live in the 40s in regards to our tax dollars...compared to today's democrat/liberal/whatever you want to label.
Her last sentense alludes that, with the government's consent, we are allowed to keep a "big hunk" of our own property because apparently we live in and benefits from a society to whose creation many other people have contributed. Had they not "help" would they take the big hunk and leave us with the small?
She also forgots how much the factory, and the risk/investment the owner took to open it, benefits everyone else. Most importantly, the wage that the worker gets, and the taxes collected from it. Without the factory, the cycle couldn't exist, but everything else could without the government.
Other noteables; she also states:
"You hired workers the rest of us paid to educate." It can be argued that public schools don't often train the workers for the job. And Private schools and voucher programs are becomming more and more popular as public education becomes more and more costly, with no increased performance to the child.
"You were safe in your factory because of police forces and fire forces that the rest of us paid for." Police don't prevent crime, Fire forces don't prevent fires.
Summary, it's a big improvement to the arguements for the 1943 Tax Act, which is all I was getting at.
Last edited by Braineack; 12-30-2011 at 12:43 PM.
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12-30-2011, 12:15 PM
#704
My God, It's Full Of Stars (Capital Formation)
OK, now I'm getting a bit spooked -- Bloomberg ran this:
Hoh hoh hoh...
Back to fundamental truths, my friends:
That's the beginning and end of it economically. "Spend spend spend" can never work because capital formation requires saving and when you replace capital formation with debt you are guaranteed, in aggregate, to lose.
Noodle on those two basic principles above a bit and it will snap into focus: A lender of capital will always seek to charge more than the growth rate in the economy (otherwise he'd rather do something with the capital other than lend it to you) which means that when capital formation as the predicate for business formation and investment is replaced by debt -- what banks and the financial industry calls "credit" -- the spread guarantees that eventually the amount of debt will rise hyperbolically compared to output.
I know I've shown this chart dozens of times, but until we break this cycle we will never have actual economic prosperity.
That will always happen.
There's only one way to stop it -- don't do that. Don't rely on "credit" for economic expansion. Economically force expansion to be funded by economic surplus -- that is, capital formation.
People recoil in horror when I say "force", but in point of fact the government doesn't have to force anything. The "force" in question are natural economic forces and they act all on their own if the government stops backstopping and subsidizing the use of debt instead of capital.
Fannie, Freddie, the rescue of AIG, Student Loans, Medicare/Medicaid, the bailout of GM and Chrysler, backstopping Citibank as many times as you have fingers in the last 30 years, refusal to instantly jail all the officers of MF Global when the missing segfunds were discovered and more -- all come down to one thing: Government's intentional distortion of the markets.
This should not surprise -- after all, if government was to use capital instead of debt it would have to tax more and spend less! That is, the same "basic" principle applies at the government level. It's not quite identical in that government doesn't produce (directly) and thus there is no "economic surplus" per-se, but in general it can either fund its programs with economic surplus (which it taxes from the people -- by definition economic surplus since if you can't pay and survive you cease to be a taxpayer) or it can replace economic surplus with debt.
The cessation of these policies begins with government.
We either do it now or we'll do it the hard way. Both paths suck -- we're only choosing which sucks less, and the longer we wait to do the right thing the worse it's going to be.
America has a terrible saving problem and a slumping economy. But our national mantra, underscored by last week’s payroll-tax cut, is spend, spend, spend.
Countries can’t spend their way to prosperity. This demand- side voodoo-economics approach is driving us further into hock. The right mantra should be save, save, save.
Countries can’t spend their way to prosperity. This demand- side voodoo-economics approach is driving us further into hock. The right mantra should be save, save, save.
Back to fundamental truths, my friends:
- [*]
That's the beginning and end of it economically. "Spend spend spend" can never work because capital formation requires saving and when you replace capital formation with debt you are guaranteed, in aggregate, to lose.
Noodle on those two basic principles above a bit and it will snap into focus: A lender of capital will always seek to charge more than the growth rate in the economy (otherwise he'd rather do something with the capital other than lend it to you) which means that when capital formation as the predicate for business formation and investment is replaced by debt -- what banks and the financial industry calls "credit" -- the spread guarantees that eventually the amount of debt will rise hyperbolically compared to output.
I know I've shown this chart dozens of times, but until we break this cycle we will never have actual economic prosperity.
That will always happen.
There's only one way to stop it -- don't do that. Don't rely on "credit" for economic expansion. Economically force expansion to be funded by economic surplus -- that is, capital formation.
People recoil in horror when I say "force", but in point of fact the government doesn't have to force anything. The "force" in question are natural economic forces and they act all on their own if the government stops backstopping and subsidizing the use of debt instead of capital.
Fannie, Freddie, the rescue of AIG, Student Loans, Medicare/Medicaid, the bailout of GM and Chrysler, backstopping Citibank as many times as you have fingers in the last 30 years, refusal to instantly jail all the officers of MF Global when the missing segfunds were discovered and more -- all come down to one thing: Government's intentional distortion of the markets.
This should not surprise -- after all, if government was to use capital instead of debt it would have to tax more and spend less! That is, the same "basic" principle applies at the government level. It's not quite identical in that government doesn't produce (directly) and thus there is no "economic surplus" per-se, but in general it can either fund its programs with economic surplus (which it taxes from the people -- by definition economic surplus since if you can't pay and survive you cease to be a taxpayer) or it can replace economic surplus with debt.
The cessation of these policies begins with government.
We either do it now or we'll do it the hard way. Both paths suck -- we're only choosing which sucks less, and the longer we wait to do the right thing the worse it's going to be.
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12-30-2011, 12:33 PM
#705
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...
Last year, I came up with a saying that “Bad Government Policy Begets More Bad Government Policy” and labeled it “Mitchell’s Law” during a bout of narcissism.
There are lots of examples of this phenomenon, such as the misguided War on Drugs being a precursor to intrusive, costly, and ineffective money laundering policies.
Or how about government healthcare subsidies driving up the price of healthcare, which then leads politicians to decide that there should be even more subsidies because healthcare has become more expensive.
But if you want a really stark example of Mitchell’s Law, the internal revenue code is littered with examples.
The politicians created a nightmarishly complex tax system, for instance, and then decided that enforcing the wretched system required the erosion of civil liberties and constitutional freedoms.
The latest example of this process involves the Foreign Account Tax Compliance Act, a piece of legislation that was imposed in 2010 because politicians assumed they could collect lots of tax revenue every single year by getting money from so-called tax havens.
This FATCA law basically imposes a huge regulatory burden on all companies that have international transactions involving the United States, and all foreign financial institutions that want to invest in the United States. It is such a disaster that even the New York Times has taken notice, recently reporting that:
…the Foreign Account Tax Compliance Act, or Fatca, as it is known, is now causing alarm among businesses outside the United States that fear they will have to spend billions of dollars a year to meet the greatly increased reporting burdens, starting in 2013. American expatriates also say the new filing demands are daunting and overblown. …The law demands that virtually every financial firm outside the United States and any foreign company in which Americans are beneficial owners must register with the Internal Revenue Service, check existing accounts in search of Americans and annually declare their compliance. Noncompliance would be punished with a withholding charge of up to 30 percent on any income and capital payments the company gets from the United States. …The I.R.S., under pressure from angry and confused financial officials abroad, has extended the deadline for registration until June 30, 2013, and is struggling to provide more detailed guidance by the end of this year. But beginning in 2012, many American expatriates — already the only developed-nation citizens subject to double taxation from their home government — must furnish the I.R.S. with detailed personal information on their overseas assets. …He said his sense was that Fatca required companies “to prove your innocence.” …Then there is a question of reciprocity: Would the United States accept the same demands for information from the tax authorities in other countries — say Russia or China?
It’s worth noting at this point that FATCA only exists because of bad tax law. If the United States had a simple and fair flat tax, there would be no double taxation of income that is saved and invested. As such, the IRS wouldn’t have any reason to care whether Americans had bank accounts and/or investments in places such as London, Hong Kong, and Panama.
But as is so often the case with politicians, they choose not to fix bad policy and instead decide to impose one bad policy on top of another. Hence, the crowd in Washington enacting FATCA and sending the IRS on a jihad.
By the way, the New York Times was late to the party. Many other news outlets already have noticed that the United States is about to suffer a big self-inflicted economic wound.
Indeed, what’s remarkable about Obama’s FATCA policy is that the world in now united. But it’s not united for something big and noble, such as peace, commerce, prosperity, or human rights. Instead, it’s united in opposition to intrusive, misguided, and foolish American tax law.
Let’s look at some examples.
Well, the only “benefit” anybody had identified is that FATCA will transfer more money from the productive sector of the economy to the government. Indeed, Obama argued during the 2008 campaign that cracking down on “tax havens” with proposals such as FATCA would give politicians lots of additional money to spend.
But when the legislation was approved in 2010, the Joint Committee on Taxation estimated that the new law would raise only $8.7 billion over 10 years, not the $100 billion that Obama claimed could be collected every single year. This video has some of the damning details.
One final point demands attention.
While it appears that the rest of the world is against FATCA, that’s not completely true. Some international bureaucrats in Paris, funded by American tax dollars, actually want the rest of the world to adopt the same Orwellian system. Here’s a blurb from the New York Times story.
Jeffrey Owens, a tax expert at the Organization for Economic Cooperation and Development, said catching tax evaders was “a concern that many member countries share.” If countries could agree to new global reporting standards for exchanging information, he said, then “maybe there’s a way forward.”
In other words, the pinhead bureaucrats at the OECD think FATCA’s such a swell idea that they want to create a global network of tax police. So not only would America erode the sovereignty of other nations because of our bad tax law, but those other nations would be able to impose their bad tax law on income earned in America!
And just in case you think that’s just irresponsible demagoguery, it’s already beginning to happen. Check out this IRS regulation, proposed by the Obama Administration, that would require American banks to put foreign law above American law.
There are lots of examples of this phenomenon, such as the misguided War on Drugs being a precursor to intrusive, costly, and ineffective money laundering policies.
Or how about government healthcare subsidies driving up the price of healthcare, which then leads politicians to decide that there should be even more subsidies because healthcare has become more expensive.
But if you want a really stark example of Mitchell’s Law, the internal revenue code is littered with examples.
The politicians created a nightmarishly complex tax system, for instance, and then decided that enforcing the wretched system required the erosion of civil liberties and constitutional freedoms.
The latest example of this process involves the Foreign Account Tax Compliance Act, a piece of legislation that was imposed in 2010 because politicians assumed they could collect lots of tax revenue every single year by getting money from so-called tax havens.
This FATCA law basically imposes a huge regulatory burden on all companies that have international transactions involving the United States, and all foreign financial institutions that want to invest in the United States. It is such a disaster that even the New York Times has taken notice, recently reporting that:
…the Foreign Account Tax Compliance Act, or Fatca, as it is known, is now causing alarm among businesses outside the United States that fear they will have to spend billions of dollars a year to meet the greatly increased reporting burdens, starting in 2013. American expatriates also say the new filing demands are daunting and overblown. …The law demands that virtually every financial firm outside the United States and any foreign company in which Americans are beneficial owners must register with the Internal Revenue Service, check existing accounts in search of Americans and annually declare their compliance. Noncompliance would be punished with a withholding charge of up to 30 percent on any income and capital payments the company gets from the United States. …The I.R.S., under pressure from angry and confused financial officials abroad, has extended the deadline for registration until June 30, 2013, and is struggling to provide more detailed guidance by the end of this year. But beginning in 2012, many American expatriates — already the only developed-nation citizens subject to double taxation from their home government — must furnish the I.R.S. with detailed personal information on their overseas assets. …He said his sense was that Fatca required companies “to prove your innocence.” …Then there is a question of reciprocity: Would the United States accept the same demands for information from the tax authorities in other countries — say Russia or China?
It’s worth noting at this point that FATCA only exists because of bad tax law. If the United States had a simple and fair flat tax, there would be no double taxation of income that is saved and invested. As such, the IRS wouldn’t have any reason to care whether Americans had bank accounts and/or investments in places such as London, Hong Kong, and Panama.
But as is so often the case with politicians, they choose not to fix bad policy and instead decide to impose one bad policy on top of another. Hence, the crowd in Washington enacting FATCA and sending the IRS on a jihad.
By the way, the New York Times was late to the party. Many other news outlets already have noticed that the United States is about to suffer a big self-inflicted economic wound.
Indeed, what’s remarkable about Obama’s FATCA policy is that the world in now united. But it’s not united for something big and noble, such as peace, commerce, prosperity, or human rights. Instead, it’s united in opposition to intrusive, misguided, and foolish American tax law.
Let’s look at some examples.
o From the United Kingdom, a Financial Times column warns that, “This summer, the senior management of one of Asia’s largest financial groups is quietly mulling a potentially explosive question: could it organise some of its subsidiaries so that they could stop handling all US Treasury bonds? …what is worrying this particular Asian financial group is…a new law called the Foreign Account Tax Compliance Act…the new rules leave some financial officials fuming in places such as Australia, Canada, Germany, Hong Kong and Singapore. Little wonder. Never mind the fact that implementing these measures is likely to be costly. …Hence the fact that some non-US asset managers and banking groups are debating whether they could simply ignore Fatca by creating subsidiaries that never touch US assets at all. “This is complete madness for the US – America needs global investors to buy its bonds,” fumes one bank manager. “But not holding US assets might turn out to be the easiest thing for us to do.”
o From India, the Economic Times reports that, “FATCA, or the Foreign Account Tax Compliance Act, will require overseas banks to report U.S. clients to the Internal Revenue Service, but its loose definition of who is a U.S. citizen will create a huge administrative burden and could push non-residents to slash their U.S. exposure, some bankers say. …Bankers say the scheme will be extremely costly to implement, and some say that as the legislation stands, any bank with a client judged to be a U.S. citizen will be also obliged to supply documentation on all other clients. “FATCA will cost 10 times to the banks than it will generate for the IRS. It is going to be extremely complicated,” said Yves Mirabaud, managing partner at Mirabaud & Cie and Swiss Bankers Association board member.”
o Discussing the impact in Canada, Reuters notes, “The new regulation has drawn criticism from the world’s banks and business people about its reach and costs. ..”Hundreds of millions of dollars spent on developing compliance processes to target Canadian citizens would not be a useful exercise, and they are, for the most part, people who actually have no tax liabilities because they do not earn income in the United States,” [Canadian Finance Minister] Flaherty said.”
o A Taiwan news outlet said, “Taiwan’s domestic banks will reportedly reduce holdings of American bonds worth an estimated NT$100 billion (US$3.33 billion) due to the U.S. government’s recent decision to impose 30% tax on foreign-investment income in U.S. securities as bonds. Taiwan’s eight government-linked banks reportedly hold U.S. financial products worth over US$2 billion… On April 8, 2011, the U.S. government issued a notice advising foreign financial institutions to meet certain obligations under the Foreign Account Tax Compliance Act (FATCA), under which foreign financial institutions are subject to complex reporting rules related to their U.S. accounts.”
o From the Persian Gulf, the Bahrain Daily News noted, “A US law…has drawn the criticism of the world’s banks and business people, who dismiss it as imperialist and “the neutron bomb of the global financial system.” The unusually broad regulation, known as FATCA, or the Foreign Account Tax Compliance Act, makes the world’s financial institutions something of an extension of the tax-collecting Internal Revenue Service – something no other country does for its tax regime. …Even the European Commission has objected, and experts say other countries may create their own FATCA-style regimes for US banks or withdraw from US capital markets. In a barrage of letters to the Treasury, IRS and Congress, opponents from Australia to Switzerland to Hong Kong assail FATCA’s application to a broad swath of institutions and entities.”
o A story from Singapore finds, “For many years, thousands of foreign investors have put their money into American shares or other investments. Now, however, a somewhat obscure law called the Foreign Account Tax Compliance Act (FATCA) may make investments in the United States for everyone, from billionaires to the man on the street, here in Singapore far less attractive. …some banks or investment managers may advise customers not to invest in the US. … “private bankers are publicly advising their clients to clear their portfolios of all US securities”. A fund manager here told me his company is also advising clients to avoid US investments, and other companies may similarly start telling large clients as well as smaller ones the same story. Investors could then see recommendations not to invest in the US, and they may put their money elsewhere. …As consulting firm PwC said, “some institutions could decide that complying with the due diligence and verification provisions may not be cost effective” so they may stop making investments in the US. Banks or other asset managers may similarly decide it is easier not to offer US investments than to try and comply with the FATCA.”
o From Switzerland, a story “about the backlash from United States expats and the financial sector to the Foreign Account Tax Compliance Act (FATCA)” reports that, “Growing numbers of American expatriates are renouncing their US citizenship over a controversial new tax law and ever more burdensome fiscal and reporting obligations. …banks and business people who are supposed to enforce it on behalf of the US tax man are worried about its costly administrative burden… it’s just too expensive. The consequence will be that they cut out US clients and stop investing in the US. …Three or four years ago no one talked about renouncing nationality – now it’s an open discussion. That’s a major shift in mentality.
o Writing about the reaction from Europe, one columnist noted, “FATCA encourages foreign financial institutions to limit their exposure to U.S. assets. In a joint letter to the Treasury and the IRS, the European Banking Federation and the Institute of International Bankers, which together represent most of the non-U.S. banks and securities firms that would be affected by FATCA, warned that “many [foreign financial institutions], particularly smaller ones or those with minimal U.S. investments or U.S. customers, will opt out of U.S. securities rather than enter into a direct contractual agreement with a foreign tax authority (the IRS) that imposes substantial new obligations and the significant reputational, regulatory, and financial risks of potentially failing those obligations.” A widespread divestment of U.S. securities by institutions seeking to avoid the burdens of FATCA could have real and harmful effects on the U.S. economy.”
These press excerpts help demonstrate the costs of FATCA, but what about the benefits? After all, maybe the law will lead to lots of good results that offset the high regulatory costs and lost investment for the American economy.o From India, the Economic Times reports that, “FATCA, or the Foreign Account Tax Compliance Act, will require overseas banks to report U.S. clients to the Internal Revenue Service, but its loose definition of who is a U.S. citizen will create a huge administrative burden and could push non-residents to slash their U.S. exposure, some bankers say. …Bankers say the scheme will be extremely costly to implement, and some say that as the legislation stands, any bank with a client judged to be a U.S. citizen will be also obliged to supply documentation on all other clients. “FATCA will cost 10 times to the banks than it will generate for the IRS. It is going to be extremely complicated,” said Yves Mirabaud, managing partner at Mirabaud & Cie and Swiss Bankers Association board member.”
o Discussing the impact in Canada, Reuters notes, “The new regulation has drawn criticism from the world’s banks and business people about its reach and costs. ..”Hundreds of millions of dollars spent on developing compliance processes to target Canadian citizens would not be a useful exercise, and they are, for the most part, people who actually have no tax liabilities because they do not earn income in the United States,” [Canadian Finance Minister] Flaherty said.”
o A Taiwan news outlet said, “Taiwan’s domestic banks will reportedly reduce holdings of American bonds worth an estimated NT$100 billion (US$3.33 billion) due to the U.S. government’s recent decision to impose 30% tax on foreign-investment income in U.S. securities as bonds. Taiwan’s eight government-linked banks reportedly hold U.S. financial products worth over US$2 billion… On April 8, 2011, the U.S. government issued a notice advising foreign financial institutions to meet certain obligations under the Foreign Account Tax Compliance Act (FATCA), under which foreign financial institutions are subject to complex reporting rules related to their U.S. accounts.”
o From the Persian Gulf, the Bahrain Daily News noted, “A US law…has drawn the criticism of the world’s banks and business people, who dismiss it as imperialist and “the neutron bomb of the global financial system.” The unusually broad regulation, known as FATCA, or the Foreign Account Tax Compliance Act, makes the world’s financial institutions something of an extension of the tax-collecting Internal Revenue Service – something no other country does for its tax regime. …Even the European Commission has objected, and experts say other countries may create their own FATCA-style regimes for US banks or withdraw from US capital markets. In a barrage of letters to the Treasury, IRS and Congress, opponents from Australia to Switzerland to Hong Kong assail FATCA’s application to a broad swath of institutions and entities.”
o A story from Singapore finds, “For many years, thousands of foreign investors have put their money into American shares or other investments. Now, however, a somewhat obscure law called the Foreign Account Tax Compliance Act (FATCA) may make investments in the United States for everyone, from billionaires to the man on the street, here in Singapore far less attractive. …some banks or investment managers may advise customers not to invest in the US. … “private bankers are publicly advising their clients to clear their portfolios of all US securities”. A fund manager here told me his company is also advising clients to avoid US investments, and other companies may similarly start telling large clients as well as smaller ones the same story. Investors could then see recommendations not to invest in the US, and they may put their money elsewhere. …As consulting firm PwC said, “some institutions could decide that complying with the due diligence and verification provisions may not be cost effective” so they may stop making investments in the US. Banks or other asset managers may similarly decide it is easier not to offer US investments than to try and comply with the FATCA.”
o From Switzerland, a story “about the backlash from United States expats and the financial sector to the Foreign Account Tax Compliance Act (FATCA)” reports that, “Growing numbers of American expatriates are renouncing their US citizenship over a controversial new tax law and ever more burdensome fiscal and reporting obligations. …banks and business people who are supposed to enforce it on behalf of the US tax man are worried about its costly administrative burden… it’s just too expensive. The consequence will be that they cut out US clients and stop investing in the US. …Three or four years ago no one talked about renouncing nationality – now it’s an open discussion. That’s a major shift in mentality.
o Writing about the reaction from Europe, one columnist noted, “FATCA encourages foreign financial institutions to limit their exposure to U.S. assets. In a joint letter to the Treasury and the IRS, the European Banking Federation and the Institute of International Bankers, which together represent most of the non-U.S. banks and securities firms that would be affected by FATCA, warned that “many [foreign financial institutions], particularly smaller ones or those with minimal U.S. investments or U.S. customers, will opt out of U.S. securities rather than enter into a direct contractual agreement with a foreign tax authority (the IRS) that imposes substantial new obligations and the significant reputational, regulatory, and financial risks of potentially failing those obligations.” A widespread divestment of U.S. securities by institutions seeking to avoid the burdens of FATCA could have real and harmful effects on the U.S. economy.”
Well, the only “benefit” anybody had identified is that FATCA will transfer more money from the productive sector of the economy to the government. Indeed, Obama argued during the 2008 campaign that cracking down on “tax havens” with proposals such as FATCA would give politicians lots of additional money to spend.
But when the legislation was approved in 2010, the Joint Committee on Taxation estimated that the new law would raise only $8.7 billion over 10 years, not the $100 billion that Obama claimed could be collected every single year. This video has some of the damning details.
One final point demands attention.
While it appears that the rest of the world is against FATCA, that’s not completely true. Some international bureaucrats in Paris, funded by American tax dollars, actually want the rest of the world to adopt the same Orwellian system. Here’s a blurb from the New York Times story.
Jeffrey Owens, a tax expert at the Organization for Economic Cooperation and Development, said catching tax evaders was “a concern that many member countries share.” If countries could agree to new global reporting standards for exchanging information, he said, then “maybe there’s a way forward.”
In other words, the pinhead bureaucrats at the OECD think FATCA’s such a swell idea that they want to create a global network of tax police. So not only would America erode the sovereignty of other nations because of our bad tax law, but those other nations would be able to impose their bad tax law on income earned in America!
And just in case you think that’s just irresponsible demagoguery, it’s already beginning to happen. Check out this IRS regulation, proposed by the Obama Administration, that would require American banks to put foreign law above American law.
Last edited by Braineack; 12-30-2011 at 12:45 PM.
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12-30-2011, 12:49 PM
#706
Wikipedia has an excellent article on that.
http://en.wikipedia.org/wiki/Sixteen...s_Constitution
Cliffs: Repeatedly supported by the supreme court, amendment properly ratified across 42 states, power granted in the constitution.
http://en.wikipedia.org/wiki/Sixteen...s_Constitution
Cliffs: Repeatedly supported by the supreme court, amendment properly ratified across 42 states, power granted in the constitution.
-U.S. District Court Judge,
James C. Fox, 2003”
The irs tax code does not define income.
wow that sure makes things confusing.
In the Eisner vs Montgomery case the supreme court defined income as gains or profits from corporate activity.
The supreme court has repeatedly said that the 16th amendment gave no new power of taxation.
And how come does the definition of what a voluntary tax according to the author of the tax code NOT line up with what the irs.gov site says?
The Truth: The tax law is found in Title 26 of the United States Code. The requirement to file an income tax return is not voluntary and it is clearly set forth in the Internal Revenue Code (IRC) Sections 6011(a), 6012(a), et seq., and 6072(a). IRS was established July 1, 1862 by an act of Congress. Our system of taxation allows taxpayers to determine the correct amount of tax and complete the appropriate forms "voluntarily" rather than have the government do it for them. However, any taxpayer whose income falls below the statutory amount, does not have to file a return.
http://www.irs.gov/compliance/enforc...106375,00.html
so what does this mean?
can i just mail in a blank 1040 and my w2 and let them figure it up for me?
i have no deductions to take whatsoever
therefore i am considering doing that this year just to see what happens
skip to the 1:50 mark to see how the author of the tax code defines "Voluntary Compliance"
as you will see it is NOTHING like what the irs.gov website claims the definition to be
not to mention the fact that the requirement to fill out a 1040 is a violation of our right not to incriminate ourselves since we can be jailed for what we put down on it.
that clip from youtube is from a documentary by Aaron Russo titled Freedom to Fascism. Just look it up if you are interested in learning more. The full version can easily be found on youtube
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12-30-2011, 12:50 PM
#707
After signing the federal reserve act.
"I am a most unhappy man. I have unwittingly ruined my country. A great industrial nation is now controlled by its system of credit. We are no longer a government by free opinion, no longer a government by conviction and the vote of the majority, but a government by the opinion and duress of a small group of dominant men."
-Woodrow Wilson 9-25-1919
"I am a most unhappy man. I have unwittingly ruined my country. A great industrial nation is now controlled by its system of credit. We are no longer a government by free opinion, no longer a government by conviction and the vote of the majority, but a government by the opinion and duress of a small group of dominant men."
-Woodrow Wilson 9-25-1919
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12-30-2011, 12:57 PM
#708
Boost Czar
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it was only like 4 states. Virginia included.
The amendment was subsequently ratified by the following states, bringing the total number of ratifying states to forty-two of the forty-eight then existing:
37. New Mexico (February 3, 1913)
38. Wyoming (February 3, 1913)
39. New Jersey (February 4, 1913)
40. Vermont (February 19, 1913)
41. Massachusetts (March 4, 1913)
42. New Hampshire (March 7, 1913), after rejecting the amendment on March 2, 1911
The legislatures of the following states rejected the amendment without ever subsequently ratifying it:
Connecticut
Rhode Island
Utah
Virginia[23]
The legislatures of the following states never considered the proposed amendment:
Florida
Pennsylvania
37. New Mexico (February 3, 1913)
38. Wyoming (February 3, 1913)
39. New Jersey (February 4, 1913)
40. Vermont (February 19, 1913)
41. Massachusetts (March 4, 1913)
42. New Hampshire (March 7, 1913), after rejecting the amendment on March 2, 1911
The legislatures of the following states rejected the amendment without ever subsequently ratifying it:
Connecticut
Rhode Island
Utah
Virginia[23]
The legislatures of the following states never considered the proposed amendment:
Florida
Pennsylvania
Last edited by Braineack; 12-30-2011 at 01:22 PM.
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12-30-2011, 01:06 PM
#709
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After signing the federal reserve act.
"I am a most unhappy man. I have unwittingly ruined my country. A great industrial nation is now controlled by its system of credit. We are no longer a government by free opinion, no longer a government by conviction and the vote of the majority, but a government by the opinion and duress of a small group of dominant men."
-Woodrow Wilson 9-25-1919
"I am a most unhappy man. I have unwittingly ruined my country. A great industrial nation is now controlled by its system of credit. We are no longer a government by free opinion, no longer a government by conviction and the vote of the majority, but a government by the opinion and duress of a small group of dominant men."
-Woodrow Wilson 9-25-1919
the first two sentenses were never spoken by him. the remaining were things he said in various campaign speeches in 1912, before he signed the law.
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12-30-2011, 01:17 PM
#711
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the quote is never sourced; it was fabricated.
This is a real quote:
"A great industrial nation is controlled by its system of credit. Our system of credit is privately concentrated. The growth of the nation, therefore, and all our activities are in the hands of a few men who, even if their action be honest and intended for the public interest, are necessarily concentrated upon the great undertakings in which their own money is involved and who necessarily, by very reason of their own limitations, chill and check and destroy genuine economic freedom."
and so is this:
"We have restricted credit, we have restricted opportunity, we have controlled development, and we have come to be one of the worst ruled, one of the most completely controlled and dominated, governments in the civilized world--no longer a government by free opinion, no longer a government by conviction and the vote of the majority, but a government by the opinion and the duress of small groups of dominant men."
both said before signing the act into law.
This is a real quote:
"A great industrial nation is controlled by its system of credit. Our system of credit is privately concentrated. The growth of the nation, therefore, and all our activities are in the hands of a few men who, even if their action be honest and intended for the public interest, are necessarily concentrated upon the great undertakings in which their own money is involved and who necessarily, by very reason of their own limitations, chill and check and destroy genuine economic freedom."
and so is this:
"We have restricted credit, we have restricted opportunity, we have controlled development, and we have come to be one of the worst ruled, one of the most completely controlled and dominated, governments in the civilized world--no longer a government by free opinion, no longer a government by conviction and the vote of the majority, but a government by the opinion and the duress of small groups of dominant men."
both said before signing the act into law.
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12-30-2011, 01:45 PM
#714
from what i read on this wiki article
http://en.wikipedia.org/wiki/America...dom_to_Fascism
the two quotes only discredit the first two sentences about being most unhappy and unwittingly .
while i can not find when his book The New Freedom was written i think it came out in 1913
so you are likely right about when it was written vs when the act was passed though i can not confirm it
http://en.wikipedia.org/wiki/America...dom_to_Fascism
the two quotes only discredit the first two sentences about being most unhappy and unwittingly .
while i can not find when his book The New Freedom was written i think it came out in 1913
so you are likely right about when it was written vs when the act was passed though i can not confirm it
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12-30-2011, 02:21 PM
#716
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Bollocks. I accidentally the whole thing and lost my first draft response so this is going to be less awesome than usual.
This comes down to interpretation, influenced by biases. I did not read her statement the same way. As members of the 99.99%, all taxpayers in a society benefit from community-wide services to some degree - sewage, military, roads, trash pickup, public education, etc. If you take from the pot, she expects you give to the pot.
Lots of details in between, but that basic premise makes sense.
1) A reduction in the tax burden of households need not be exclusively linked to "spend, spend, spend." In fact, it hasn't been - much to the chagrin of monetarists. Facilitating a private sector surplus allows for the reduction in the debt that has been built up over the past decade.
2) If you believe that the US government has to borrow dollars to fund its spending, then a LOT of people are "lending money at an intentional loss" right now.
3) I agree that there are numerous instances of government distortions in markets via intervention.
4) I reject the idea that there is a choice in funding the spending of the US government either by taxes or by increased debt.
I think it would be awesome if all the nations that run trade surpluses with the USA stopped buying Treasury securites. You would see a lot of either neo-chartalists or hyperflationists do this:
because someone would finally be proven correct.
My objection to her statement is when she says "the rest of us" she is alluding to the government, not the productive fellow taxpayer. This also make it seem like she doesn't believe the person building the factory doesn't contribute the same taxes, if not MUCH more.
Her last sentense alludes that, with the government's consent, we are allowed to keep a "big hunk" of our own property because apparently we live in and benefits from a society to whose creation many other people have contributed. Had they not "help" would they take the big hunk and leave us with the small?
Her last sentense alludes that, with the government's consent, we are allowed to keep a "big hunk" of our own property because apparently we live in and benefits from a society to whose creation many other people have contributed. Had they not "help" would they take the big hunk and leave us with the small?
Lots of details in between, but that basic premise makes sense.
2) If you believe that the US government has to borrow dollars to fund its spending, then a LOT of people are "lending money at an intentional loss" right now.
3) I agree that there are numerous instances of government distortions in markets via intervention.
4) I reject the idea that there is a choice in funding the spending of the US government either by taxes or by increased debt.
I think it would be awesome if all the nations that run trade surpluses with the USA stopped buying Treasury securites. You would see a lot of either neo-chartalists or hyperflationists do this:
because someone would finally be proven correct.
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12-30-2011, 03:29 PM
#717
Christ all mighty!! You guys have way too much time to debate each other over politics.
I like Ron Paul. I like his ideas, I like what he stands for and I like what he says he'll do.
Hopefully, our current president doesn't have a chance in hell at a 2nd term, but you never know.
The politicians in this country are so corrupt and misleading that its hard to believe a single one of them, but I really do feel like Ron Paul is a genuinely good guy that would help get us back on our feet.
We need to stop giving handouts to all the losers and start rewarding the workers. Start helping small business instead of killing them. Legalize pot and tax the **** if you want. Pull the troops out of the foreign lands and lets work on protecting our own land, maybe by starting with the mexican border. Etc etc.
I like Ron Paul. I like his ideas, I like what he stands for and I like what he says he'll do.
Hopefully, our current president doesn't have a chance in hell at a 2nd term, but you never know.
The politicians in this country are so corrupt and misleading that its hard to believe a single one of them, but I really do feel like Ron Paul is a genuinely good guy that would help get us back on our feet.
We need to stop giving handouts to all the losers and start rewarding the workers. Start helping small business instead of killing them. Legalize pot and tax the **** if you want. Pull the troops out of the foreign lands and lets work on protecting our own land, maybe by starting with the mexican border. Etc etc.
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12-30-2011, 04:11 PM
#718
It's much like the "conservatives" in our government. They aren't conservative. But it's in one specific area in the US where they've tried to subvert the meanings.
tax stuff
Sixteenth amendment invalid income tax not legal
Thomas is a tax protester, and one of his arguments is that he did not need to file tax returns because the sixteenth amendment is not part of the constitution. It was not properly ratified, Thomas insists, repeating the argument of W. Benson & M. Beckman, The Law That Never Was (1985). Benson and Beckman review the documents concerning the states' ratification of the sixteenth amendment and conclude that only four states ratified the sixteenth amendment; they insist that the official promulgation of that amendment by Secretary of State Knox in 1913 is therefore void.
Benson and Beckman did not discover anything; they rediscovered something that Secretary Knox considered in 1913. Thirty-eight states ratified the sixteenth amendment, and thirty-seven sent formal instruments of ratification to the Secretary of State. (Minnesota notified the Secretary orally, and additional states ratified later; we consider only those Secretary Knox considered.[13]) Only four instruments repeat the language of the sixteenth amendment exactly as Congress approved it. The others contain errors of diction, capitalization, punctuation, and spelling. The text Congress transmitted to the states was: "The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration." Many of the instruments neglected to capitalize "States," and some capitalized other words instead. The instrument from Illinois had "remuneration" in place of "enumeration"; the instrument from Missouri substituted "levy" for "lay"; the instrument from Washington had "income" not "incomes"; others made similar blunders.
Benson and Beckman did not discover anything; they rediscovered something that Secretary Knox considered in 1913. Thirty-eight states ratified the sixteenth amendment, and thirty-seven sent formal instruments of ratification to the Secretary of State. (Minnesota notified the Secretary orally, and additional states ratified later; we consider only those Secretary Knox considered.[13]) Only four instruments repeat the language of the sixteenth amendment exactly as Congress approved it. The others contain errors of diction, capitalization, punctuation, and spelling. The text Congress transmitted to the states was: "The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration." Many of the instruments neglected to capitalize "States," and some capitalized other words instead. The instrument from Illinois had "remuneration" in place of "enumeration"; the instrument from Missouri substituted "levy" for "lay"; the instrument from Washington had "income" not "incomes"; others made similar blunders.
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12-31-2011, 05:02 PM
#720
just out of curiosity then
i am wondering how it is you feel about voluntary compliance
what does it mean to you?
and why is there a big difference in how irs.gov explains it and how the tax code author explains it?
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