Farewell America

http://www.zerohedge.com/article/farewell-america-switzerland

by Flemlord • 17 years ago

41 62 17 years ago

jhancock21• 17 years ago

As near as I can tell, this article says "The U.S. won't turn a blind eye to private banking tax evasion schemes anymore, so we're out of here".

So long and please don't come back. As long as there exist large loopholes for high-net-worth folks to evade taxation, we will never get to bottom of "what is fair and reasonable taxation".

thras2• 17 years ago

To be fair, they're also saying that people shouldn't pay taxes to the U.S. because Bush was evil.

jhancock21• 17 years ago

I'm not sure I agree with that. Especially when you consider Swiss banking history and their willingness to hide money for just about anyone.

Obama is in a tight spot. Tax revenues are _way_ down. The U.S. not only needs to pay for ongoing costs, but for bad debts in our economy. Offshore private banking should have been stopped long ago, before it started. Would Obama be going after them so hard if the U.S. was not in such a tight spot? Its hard to say as its always a hard call to go after this level of wealth. At this point, I think he has little choice.

cakeface• 17 years ago

It seemed to me that a large part of their argument was that foreigners were required to pay inheritance tax on the value of all US assets, even though they weren't us citizens. That doesn't really seem fair to me.

ajross• 17 years ago

Why? The US Government taxes activity within its borders. It's not different than foreigners paying sales tax on stuff bought in the US.

Now, I know next to nothing about international inheritance and estate tax policy, but I'd have to assume many, many other nations have identical policies, no?

jhancock21• 17 years ago

Even if their argument was _only_ that one tax issue, its still a legitimate U.S. tax. Allowing non-U.S. citizens to participate in transaction without taxation of U.S. property, yes, private property, amounts to forcing U.S. citizens to carry a larger part of the tax burden.

However, this is just their stated issue. The real reasons are much larger than this one taxable interest.

If Swiss citizens (or any other doing biz with this "neutral" country) don't want to pay U.S. taxes, they can buy and sell property in Switzerland or some other country that doesn't mind its citizens carrying the tax burden for non-citizens.

run4yourlives4• 17 years ago

US Tax code is the most unfair set of laws I've ever seen to be honest. Most countries wouldn't even dream of demanding the levels of indentured servitude that the IRS feels is their right to collect.

In fact, I'd say the only state that is worse at screwing foreigners is - surprise - Switzerland.

steveplace3• 17 years ago

I'll take the downside. The ability to move capital outside of nations is, in my opinion, critical to freer government and society.

jhancock21• 17 years ago

It is useful (I won't agree with critical) in some respects for overall wealth creation. For example, leveraging outside wealth into our stock markets. It does amount to U.S. citizens paying tax on the same transactions that non-citizens avoid.

anigbrowl2• 17 years ago

You can still move capital out of the US. If you do not wish to pay taxes on your capital gains, you can move yourself outside and take up the citizenship of another country, while renouncing that of the US.

As far as I am aware, there is nothing preventing you moving (say) a million dollars of your personal, post-tax income to Switzerland and just parking it there if for some reason you feel it's not secure here. You have to declare the fact but it's not like there are capital controls in place that prevent you from doing so - I'm quite willing to be corrected on this if you know otherwise.

jhancock21• 17 years ago

I've thought about your comment some more since I first read it. Can you back this up? I mean real numbers? Especially since you are going down a path of comparing an education bubble with a property bubble. I'm not criticizing your article, I thought it was well written and deserves to be fleshed out more. I expect some real numbers to show how moving capital around so liberally betters all society.

I have watched the effects of China free trade. There is certainly some value created. But lots of negatives, In the last ten years (since WTO membership), the clean ground water in China has gone from over 50% to less than 5%. Imagine that, 50++ years of "Communism" didn't kill all the ground water, but less than 10 years of "Capitalism" did. I see the wealth gap in China growing to a point where what has been a growing "democracy" of sorts is getting clamped done due to the "middle class" waking up and saying, "hey, where's my share?".

I want to see real numbers instead of hand waving econo-speak. Can you provide any of that? I've been listening to the "don't worry, this derivative stuff is good for you" bullshit for 20 years (I was lead architect for several very large software systems for them in the 90s). I have yet to hear some smart person be able to back this up.

potatolicious• 17 years ago

> "So long and please don't come back."

I'd like to know where they intend to go. No western, industrial country wants their profiteering behinds amongst its citizenry, and certainly Canada and all of industrialized Europe would frown on their shenanigans.

Their only options are tin-pot tropical banana republics or the former Soviet bloc.

borism3• 17 years ago

Would you consider Netherlands, Luxembourg (or Switzerland for that matter) tin-pot tropical banana republics?

JabavuAdams• 17 years ago

Did you read the part about foreign non-resident aliens being subject to US inheritance tax law, simply because they own shares of US companies?

It's nice to have different countries with different laws and customs. I don't want to be subject to US law just because at one time I had an interaction with some US entity. This opens the door to all kinds of over-reaching.

Adam503• 17 years ago

Good.

A person who personally profits from owning shares of a US corporation should pay taxes on those profits.

jhancock21• 17 years ago

Can you provide references? Are you saying that the U.S. transactions (includes equities) may be subject to U.S. taxes? If so, that seems fine. I don't see any claims to non-U.S. property.

steveplace3• 17 years ago

Be aware: reading Zero Hedge may be hazardous to your health.

borism3• 17 years ago

I have to agree. It does have some good tidbits every now and then, but mostly spits out some derogatory non-sense. Does more harm than good.

It's somehow considered very professional and underground, but from what I've read by real pros in the field, the guy mostly doesn't seem to have any clue what he's writing about.

njl• 17 years ago

Best guess on the street is that it's actually a collective of about 40 people.

bitwize• 17 years ago

The gold fringers posting in the comments don't seem to help the site any.

toxoplasma• 17 years ago

Can anyone out there recommend good econ blogs/sites? I'm an econ novice. Thanks!

hristov• 17 years ago

So the "article" consists of one sentence which links to another article and says I should read the other article. This is such blatant hit farming that even Slashdot would be ashamed of it. I am sure the other article is a fine and important one, but I am just not going to click on it out of principle.

I wish I could mod stories down. How much karma does one need for that?

jhancock21• 17 years ago

I'm guessing you need admin access to the database to mod things down. Flagging is all there is so far as published info.

teeja• 17 years ago

"...over the last 60 years has unquestionably been one of the most aggressive nations in the world .... With breathtaking moral duplicity, the USA maintains enormous offshore havens ..."

Thanks to Noam Chomsky ... and almost noone else ... I already knew all that.

lucasvo• 17 years ago

Most of you miss the point. I grew up in Switzerland and have a U.S. passport because my father is american. I know countless other people who have U.S. passports but haven't been in the U.S. for years. They will never be in need of medicare nor do they care what the americans do, never the less they have to pay US taxes to pay for politics that they don't neccessarily support in a country they have never lived in.

This has been accepted by the other nations and they have tried to comply with these rules as much as possible. Switzerland has stricter privacy laws which allows people to evade taxes easily. The problem is, the swiss still pay their taxes even though they aren't forced to – and there are numerous studies suggesting that not forcing people to do something actually works better. I can completely understand nations who want the swiss to close this loophole.

Recent events, this was confirmed a friend managing relations with the U.S. at a big swiss bank, made a lot of people rethink whether they still want to keep their U.S. passports and are getting rid of them. These people are have been living in Switzerland for years made their fortune in Switzerland and plan to retire here. Is there really any reason why they should pay taxes, just because they were born in the US?

However you should read the second part, in which they start talking about estate tax. In this example he talks about non-US citizens, people who have invested their money in the U.S. Obama now wants to make a law that will tax estate in the U.S even if the owner is not in possession of a U.S. passport or a greencard. Doing an MBA in the states is reason enough to being taxed. This means that a wealthy individual who owns US property or stocks & bonds and spent some time in the US now has to pay up to 45% of estate tax in the U.S. on his U.S. property. Just because you own German stocks, should Germany get access to all your financial accounts and be able to freeze the assets when you pass away to determine if you should be taxed in Germany? This is absolutely ridiculous and as they mentioned in the letter, the additional tax revenue will not create enough tax revenue to solve the problems of the U.S. That's why they are suggesting that their clients should withdraw from investing in the US, because that 2 month vacation in California suddenly means, that they'll take 45% of your Apple shares when you pass away.

Farewell America

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