When I was growing up, my Grandma used to remind me from time to time that all’s fair in love and war.  Lately I’m continually reminded of that, as I see the US government   (USG) toss out the rule book in their primarily, undeclared war on the entire world, including US citizens.  At least the rule book is tossed out from my perspective.  When one has the ability to change the rulebook as it suits them to win the war, then the rule book has been tossed out.  There are others, though, who still don’t even realize that they are at war, and pathetically try to play by whatever rules they’re given by their rule-maker/adversary.  Well, it’s only your freedom at stake.

I recently was forwarded some material, and found it really fascinating stuff.  It’s a January report entitled Tax Havens: International Tax Avoidance and Evasion.  It was issued by none other than the Congressional Research Service.  It wouldn’t be a worthy tentacle of the USG beast without a 3-lettered acronym, so we’ll call it CRS from here on out.

My first step was to find out a little bit about what I was reading, and that required that I know a bit about who the authors were.  The CRS brags that it has been “informing the legislative debate since 1914”.   The year of its formation is interesting in itself, since in 1913, the illegal 16th Amendment to the Constitution initiated the unconstitutional income tax, and in 1914 Benjamin Strong Jr. was selected to be the first president of the Federal Reserve Bank of New York.  I suppose that it’s sheer coincidence that World War I broke out that same year.

A Glimpse at who “They” Are

What I’ve been seeing lately makes me wonder if “they” aren’t planning a nasty centennial celebration, and I was very interested to learn a little bit more about who the CRS really is.  Here’s a copy/paste of the very 1st paragraph from the “About Us” page of the CRS website.

“The Congressional Research Service (CRS) serves as shared staff to congressional committees and Members of Congress. CRS experts assist at every stage of the legislative process — from the early considerations that precede bill drafting, through committee hearings and floor debate, to the oversight of enacted laws and various agency activities.”

I interpret that as – the CRS are unelected, and unaccountable bureaucrats, who wield the power to significantly affect the lives of the constituencies of those elected Congressman who are apparently subordinating their judgment to them.  In other words—“them”.  Those unseen faces behind the scenes to whom people refer to in many forms.  The “powers that be”, for example.

The next question I asked myself, when realizing that I just found at least a singular pocket of them, was to see what else I could learn about who they really are.  So I clicked on the most recent annual report, which was 2012, by the way, and which would be illegal for most companies, to be so delayed in their public reporting.  It was addressed specifically to the Joint Committee on the Library, United States Congress, and Pursuant to Section 321, Public Law 91-510.  Therefore, a creation of Congress in order to effectively pass off crucial policy-making decisions to unelected, and unaccountable bureaucrats.

I say that because you can be sure that the people at CRS have a particular political agenda, and as you know, most bills get passed without the voting Congressman so much as reading the bill upon which they are voting.  If you remain unconvinced of their power, this is taken from page 3 of the 2012 annual report regarding their activities:

CHALLENGES IN FY2012

Congress faced numerous unique and difficult challenges in FY2012

As the year progressed, the pace of legislative consideration increased.

Lawmakers addressed complex issues including the economy; the debt and the deficit; financial regulation and rulemaking; health care reform; immigration; preparation for reauthorization of the farm bill; and devastating natural disasters at home and abroad; as well as changing events in Egypt, Libya, and Syria; U.S. strategy in Afghanistan and Iraq; violence and political change in Mexico, and global economic and trade concerns including the rebalancing of foreign policy priorities toward Asia. In all these instances CRS experts worked with Members and congressional staff to inform the legislative debate.

And it was the CRS who told Congress how to vote on all of that.

I’ve often wondered who actually drafted something so insidious as FATCA, and now I have at least a partial answer.  I looked through the website, and the annual report, and nowhere could I find a physical address.  Try going to the bank to open a simple bank account without disclosing, and proving your physical address.  But it’s ok for the people who end up running your life.

Then I tried to follow the money.  Your money, as a matter of fact, and on page 38 of the 40 page annual “report”, I found this as the sum total of financial information:

“In FY2012 CRS had an appropriation of $106.79 million available for expenditure. More than 88 percent of the fiscal year’s expenditures supported staff salaries and benefits.”

Considering the complete lack of credibility of who we’re dealing with here, I’d like to, at the very least, see an independent auditor’s report attached to that.  Furthermore, considering the utter lack of detail or explanatory notes, I guess you should just trust them. So, you may not know if it was $100 million, or $2 billion, that they spent, nor what it was really spent on, but at least you can go home at night feeling the shrink of your personal freedoms at their hands, so take heart.

Of course, what we don’t know, is who these people are influenced by, and to whom they effectively report.  Whether it be directly or indirectly, you can be very sure that it’s clandestine.

That’s about all you’re allowed to know about who “they” are.  Undoubtedly for reasons of your own security.  So with those initial questions answered to the extent possible, I started fanning through the sixty page report: Tax Havens: International Tax Avoidance and Evasion  purportedly issued by Jane G. Gravelle, Senior Specialist in Economic Policy, and dated January 15, 2015.

How They are Influencing Congress with Half-Truths, Spin, and All-Out Lies

This report is intended to educate your elected officials about how the USG is losing money it considers theirs.  According to the CRS summary of the report, “Numerous legislative proposals to address both individual tax evasion and corporate tax avoidance have been advanced.”  This is page 1, right up front, and it sets an ugly tone for the remaining 59 pages.  The complete report can be found here http://isaacbrocksociety.ca/2015/03/23/37922/

Although the report later correctly defines the difference between avoidance (legal) and evasion (illegal), it asserts right from first one-page summary, probably the only page most Congressmen will read, that individuals are criminals, while corporations play by the rules.  That is repeated throughout the report, while spending 80% of the report demonstrating a myriad of ways that huge multinational corporations use to avoid taxes.  Just one of the many laughable “facts” being provided to Congressmen on the matter, is that while Multi-billion dollar corporations are shifting every penny possible to low, or no tax jurisdictions (legally), that they are somehow costing Uncle Sam less than those thieving individual taxpayers are, who have much less money.

This has the effect of causing one who is ignorant about the totality of the facts, e g your Congressmen, to walk away believing that the corporate taxes being lost to the likes of multi-$ billion Google or Amazon, are small potatoes in comparison to what those guys with $2-300,000, in offshore bank accounts are costing them.  I guess the fact that Google and Amazon have the legal ability to fund Congressmen’s re-election campaigns has nothing to do with that.

That’s why you need to insist on term limits for Congress.  Jefferson et al really blew that one.

Trying to summarize, the report is dealing with two issues.

  1. Corporate inversions, whereby pharma giants, along with AT&T Bell Labs, and more recently Burger King, are making the fiscally prudent move to get offshore, and have their Parent companies domiciled in a jurisdiction where overall corporate taxes can be minimized. Simplified, this is achieved via a series of complex transactions which they legally shift revenues to low-tax jurisdictions, and expenses to high-tax jurisdictions.  Thereby keeping overall taxable income, as calculated separately, yet differently, in each jurisdiction, to a minimum, and,
  2. Individuals, who insist on their basic human right to personal privacy, and who don’t have the ability to complicate their accounting for simple lack of such financial activity, and who are, in the eyes of CRS, and therefore the USG, not in compliance with the absurd citizenship-based tax laws. According to the CRS, it seems that 100% of such people who dare be as prudent as corporations are thieves.  That at least is the assumption being made in this completely biased report.

The corporate inversions make perfect sense.  If you and I had a few $Billion to play with, we’d have several floors filled with top notch accountants and lawyers, in each jurisdiction of “operations”, doing the same things for us.  This report correctly spells that out for the congressmen (not in the summary however), placing the blame squarely with Congress for making it legal, and offering a few  patches, which don’t include the logically required total revamp, and simplification of the IRC.

Now on to the remaining 20% of the report that very much affects you and me in group 2 above.  Again, I’ll summarize, here, which isn’t that hard to do in this case.  The report uses a lot of words to say very little.

The primary concerns of the CRS, and therefore the USG, are the following.  Take notes:

  1. Individuals can evade taxes on passive income, such as interest, dividends, and capital gains, by not reporting income earned abroad
  2. In addition, because interest paid to foreign recipients is not taxed, individuals can evade taxes on U.S. source income by setting up shell corporations and trusts in foreign haven countries to channel funds into foreign jurisdictions. There is no general third-party reporting of income as is the case for ordinary passive income earned domestically; the Internal Revenue Service (IRS) relies on qualified intermediaries (QIs). In the past, these institutions certified nationality without revealing the beneficial owners.

apend xxl-1

Their Own Numbers Belie Their Bias Against You

That’s it.  Two items of such great concern, somehow equate to $60 billion in estimated losses of tax revenues?  What these clowns aren’t spelling out, is that if I have $200,000 in a bank account, that money represents after-tax savings.  The taxes have been paid, and it’s all my money.  It doesn’t represent taxable revenues year after year.  I guess when you exist in the Wonderland of these morons, where you can 1) Legally steal, and 2) Print more money, than such pie-in-the-sky forecasts make sense.

So, if I assume, like the CRS does, a 15% tax rate, then they are assuming that there are $400 Billion ($60 Billion / .15) of unreported taxable earnings somewhere out there, related solely to those US individual citizens who have offshore funds, and who don’t report any income earned on it.  Note that I’m not even considering the fact that the first $100k of earnings for those living offshore is legally deducted.  That’s a whole lot of unreported interest, dividends, and capital gains.

What Jr. High School did Ms. Gravelle graduate from?  A very simple reasonableness test indicates that any number in the vicinity of $60 Billion in lost tax revenues from US persons with funds offshore is completely ridiculous.  It seems as though the earning of $400 Billion might get on the radar somehow?  Especially when limited to only US individuals? That would have to mean that the principal required to generate $400 Billion in earnings, if each and every US citizen who was offshore was fortunate enough to earn a 10% return on their total portfolio, would have to be $4 Trillion? ($400 billion / .10)  Where is all of that US citizen money again?

That is also assuming that not a single person reports a single thin dime of earnings, nor bank accounts offshore.  As I work in the business, and help people maintain compliance regarding their offshore entities and earnings, I happen to know that’s another lie, and a very large one.   The vast majority of those with offshore funds have them there for protection from illegal confiscation by the rogue government.  They tend to be rather skittish when it comes to breaking the law, even unconstitutional ones, and are in full compliance with reporting requirements.

So we know the report lacks basic common sense, and therefore credibility, right from the start.   The report does however, correctly acknowledge that the United States, the UK, the Netherlands, Denmark, Hungary, Iceland, Israel, and Portugal, are the biggest “offshore” tax-free destinations in the world for foreigners, and encourages Congress, again, to clean up its own back yard before throwing stones.

Also reported is that there “are a number of smaller countries or areas in countries, such

as Campione d’Italia, an Italian town located within Switzerland, that have been characterized as tax havens.”    Oh, maybe that’s where the $4 Trillion has been hiding.  On a positive note, I’ve already contacted my Italian partner to investigate how we can offer companies, and possibly bank accounts, in such a principled jurisdiction, and will keep you informed.  I’ve always acknowledged that Uncle Sam is my biggest promoter, and marketing tool, and I pay close attention to his advice.

Uncle Sam Says—“You’re Screwed”

Also on page one, in the summary which the Congressmen will actually read, is this startling attention-grabber: “Provisions (in current proposed legislation) to address individual evasion include increased information reporting and provisions to increase enforcement, such as shifting the burden of proof to the taxpayer, increased penalties, and increased resources (more police). Individual tax evasion is the main target of the HIRE Act, the proposed Stop Tax Haven Abuse Act, and some other proposals.”  Then it moves into that boring table of contents spelling out all of the crap that they don’t take the time to read.

There you have the real crux of the report.  The CRS is teaching the Congressmen they instruct, on what lies to use in order to officially legislate away due process of law.  So, back to square one.  There are no rules in love and war.  Grandma was right.

I think you can see that what we spout here has no spin.  It doesn’t need to.  The facts are spelled out very clearly.  We just disseminate the truth.  We have done what we think is the only smart thing left to do:

  • Followed Uncle Sam’s advice, and got our assets beyond his greasy grasp, at least legally.
  • Took concrete steps to get citizenship, in any other country, in order to be free from totalitarian moves like restriction, or even prevention, of travel,
  • Learned how to live a better, less stressful life outside the curtain, and in freedom.

Cheers from South America (lately Brazil).

paul-seymour

Paul worked for several years with Big 4 CPA firms in both the US and Saudi Arabia, and then spent many years as a multi-national corporate Controller and CFO in places like Florida, Riyadh, Abu Dhabi, Cairo, and Medellín. In his second, freer life, he has found a natural home in the offshore industry following almost 2 decades as a permanent expat from the former America.

 An offshore company and bank account can be established for as little as $1,900 including apostils required to open bank accounts, and charges to send original documents to you.  There’s never any need to visit the jurisdictions personally, although they’re very nice places, and we recommend a visit.  With our established agency agreements, we can do everything via e-mail.  We maintain long-term relationships with our clients, and remain available for consultation on an ongoing basis.

PS – He’s currently on a 2 year journey throughout South America scouting out every corner with a view towards writing a book, aimed at future emigrants from the collapsing industrialized world, to the sprouting and blooming countries of South America.  The focus is on the incredibly diverse cultures, and a compare/contrast of same, in addition to local economies, governmental tendencies, customs etc.  told via an anecdotal style.  You can preview the book in the newsletter archives http://assetprotectionexperts.chsletter-archive.html   Look for Gringo Motorcycle Dairies for an idea of what to expect on Colombia, Ecuador, Perú, Chile, Argentina, Uruguay, Brazil, Paraguay, and Bolivia.