Tuesday, July 30, 2013
Uncle Sam's latest attack on Americans abroad is faltering
It's a long established principle that when you move from one country to another, you pay tax in your new country, not in your old country. Americans are not so lucky. Uncle Sam still wants your money wherever you are -- as long as you remain a U.S. citizen. And they make it hard to renounce your citizenship too. The latest bit of enforcement is a law -- FATCA --that lays extensive reporting requirements on foreign banks -- although the U.S. has in fact no jurisdiction over what happens in other countries. Many foreign banks are however so leery of legal harassment by Uncle Sam that they are refusing to open accounts for Americans abroad. Other problems with this arrogant bit of legislation are also beginning to show -- JR
Since its passage in 2010, the Foreign Account Tax Compliance Act has been delayed multiple times. Most recently the Treasury Department has pushed back 6 months the beginning of FATCA’s withholding penalty for noncompliant institutions, from January 1, 2014 to July 1, 2014. This newest delay is further proof that FATCA is poorly conceived and unworkable, and should be repealed.
Under the guise of catching tax evaders, a dubious claim given that the law lacks any targeting of people or places prone to evasion, FATCA treats anyone who invests overseas as a criminal. Without need for a warrant, the government demands that foreign institutions spy on their US clients, while expecting individuals to report their entire holdings to the government. In light of the ongoing backlash over multiple instances of government invading the privacy rights of citizen, the complete erosion of financial privacy rights of anyone working or investing overseas should be cause for similar uproar.
Fighting the FATCA Menace
FATCA’s requirements that foreign financial institutions act as deputy tax collectors for the US government were flawed from the start. The US government lacks the moral and legal authority to justify the legislation, much less the resources to enforce the law as written, relying instead on its dominant position and a might-makes-right mentality to strong arm foreign governments into enforcing the law on their own institutions. Specifically, they’ve sought to sign “intergovernmental agreements” to outsource the invasion of privacy of US citizens to foreign governments, through whom the Treasury Department seeks to launder the sensitive information of Americans.
Scrambling to get FATCA implemented before Congress realizes the extent of its error and reverses course, Treasury officials have done their best to con foreign governments into relinquishing their sovereign authority. They’ve relied heavily on disinformation to give the effort an air of inevitability, and feed international media dubious claims such as that there are 50 IGA’s just around the corner. But the truth is far different. As James Jatras of RepealFATCA.com recently noted, Treasury “expected to sign 17 IGAs by the end of 2012. Instead, they had four. Here we are more than halfway through 2013, and they only have nine – barely half of their 2012 year-end target.”
Opposition Gaining Ground
The latest delays provide yet more time for opposition to FATCA to solidify. As awareness of the law grows, we hope thanks in part to CF&P’s education efforts on and off Capitol Hill, so too does the backlash against the government’s radical overreach. In the last few months alone, CF&P spearheaded a coalition of 22 free market, taxpayer protection and grassroots organization that endorsed legislation introduced by Rand Paul to repeal FATCA. Congressman Posey, a member of the House Financial Services Committee, sent a letter to Treasury Secretary Lew questioning the legitimacy of the IGA process and calling on a moratorium on FATCA enforcement. And last week, a former Deputy Assistant Secretary of State blasted FATCA in a Wall Street Journal op-ed.
Tax collectors at the Treasury Department will never openly admit that the unprecedented power and authority granted by FATCA was ill-advised, but their repeated delaying of the law speaks louder than words. FATCA is a mess, and Congress needs to step in and spare the world from its disastrous consequences.
There oughta be a law? Don't be so sure
by Jeff Jacoby
AMONG THE chattering classes these days, it is a popular lament that the 112th Congress has passed fewer bills than any in the last 60 years. But not everyone is joining in the breast-beating. When CBS newsman Bob Schieffer asked House Speaker John Boehner last week how he feels about presiding "over what is perhaps the least productive and certainly one of the least popular congresses in history," Boehner rejected the planted axiom that making laws makes lawmakers productive.
"We should not be judged on how many new laws we create," he said. "We ought to be judged on how many laws that we repeal."
To those of us who regard "Don't just do something, stand there!" as an excellent rule of thumb, above all for politicians, Boehner's response was refreshing. Complaints about "gridlock" and "dysfunction" are neverending, but getting things done in Washington was never supposed to be easy. Nor is it what voters want: That's why they returned a Republican majority to the House of Representatives last November, while keeping the Senate and the White House in Democratic hands.
"We've got more laws than the administration could ever enforce," Boehner said on CBS. "We deal with what the American people want us to deal with. Unpopular? Yes. Why? We're in a divided government. We're fighting for what we believe in."
Needless to say, the notion that Congress ought to be doing less — and undoing more — immediately drew flak.
"Did Speaker Boehner really say that the Congress should be judged on the number of laws they repeal not the number they pass?" tweeted White House aide Dan Pfeiffer. The speaker's remarks were "just embarrassing," the pro-Obama activist group Organizing for Action said scornfully; members of Congress weren't elected "to sit there and wind back the clock." The Democratic Congressional Campaign Committee quickly moved to exploit Boehner's comments in online ads aimed at 19 Republican incumbents Democrats hope to unseat.
Joe Gandelman, editor of The Moderate Voice, a political website, could barely contain his contempt: "Welcome to the new age of spin where you take a rotted, fetid, smelly, almost poisonous lemon and try to sell it not just as lemonade, but the best lemonade ever made."
Actually, Congress gets even lower marks when judged by Boehner's preferred metric. So far this year Congress has passed 15 laws; it hasn't actually repealed any. While the House has voted more than 30 times to repeal all or part of the Affordable Care Act, there is no chance that the Senate will go along. "Stop taking meaningless repeal votes," President Obama needled Republicans in a speech on Wednesday. "Repealing ObamaCare and cutting spending is not an economic plan."
ObamaCare remains highly unpopular, more Americans than ever want it repealed, and only 13 percent think the law will personally help them, while three times as many expect it to hurt them. A key Senate Democrat warned months ago that the law's rollout would cause "a huge train wreck," and the White House this month put off for another year the enforcement of a key ObamaCare provision. As you contemplate this legislative dog's dinner, is it really so absurd to suggest that repealing laws may be a better test of congressional effectiveness than passing them in the first place?
"There oughta be a law!" is more likely to be an emotional reaction than a considered judgment, but we live in an age that has turned worship of government into an unofficial state religion, so resisting demands for more laws is treated as heresy. The belief that whenever there is a problem more government must be the cure flies in the face of experience – especially the experience of all the problems governmental cures made worse. It was "There oughta be a law!" that gave us the Fugitive Slave Law and Prohibition, uncommonly silly bans on contraception and out-of-control drug laws, tuition subsidies that make tuition more expensive and immigration "reforms" that caused an illegal immigration crisis.
On becoming president of the Massachusetts Senate in 1914, Calvin Coolidge offered his colleagues some timeless advice: "Don't hurry to legislate. Give administration a chance to catch up with legislation." Making laws, Coolidge knew, is no proof that lawmakers are productive. As he wrote to his father, a Vermont legislator: "It is much more important to kill bad bills than to pass good ones."
He was right. And so, on this score, is Boehner. Action isn't the same as accomplishment — least of all in Congress, which often does its best work when it does nothing at all.
Middle class has been left behind by Obamanomics
"Even though our businesses are creating new jobs and have broken record profits," President Obama said in his economics address last week, "nearly all the income gains of the past 10 years have continued to flow to the top 1 percent."
It's odd that Obama touts these facts, because the facts indict his policies. This is even stranger: Many Republicans want to downplay these facts, even though they provide the GOP with an opening.
Obama's first term, with all its tax hikes, regulations, mandates, subsidies and bailouts, saw stock markets rise, corporate earnings break records and the rich get richer, while median income stagnated and unemployment remained stubbornly high.
Obama rightly calls the last few years "a winner-take-all economy where a few are doing better and better and better, while everybody else just treads water."
Median household income has fallen by 5 percent since 2009 — when the recession ended and Obama came into office — as the Wall Street Journal pointed out after Obama's speech. But corporate profits and the stock market keep hitting record highs.
How does Obama think these are points in his favor?
If he's using this data to prove he's no Marxist, fine. Point granted. But Obama seems to think that middle-class and working-class stagnation under Obamanomics somehow calls for more Obamanomics.
The unstated premise is this: More government means more equality, while the free market favors the rich and tramples on the rest.
Liberals and mainstream journalists believe this, but so do some Republicans. When Mitt Romney dismisses the lower 47 percent of earners as hopelessly liberal, he's buying the notion that free enterprise is a system for the wealthy.
But Obama's own facts help undermine that: Government grows, the wealthy, the big, and the well-connected pull away, and the rest of us struggle.
One reason: Obamanomics leans heavily on trickle-down economics. How does Obama promise to create jobs? With more loan guarantees to sell jumbo jets and more subsidies to make solar panels — taxpayer transfers to the big companies with the best lobbyists, with some crumbs hopefully falling to the working class.
Also, Obama's regulations crush small businesses, protecting the big guys from competition. This hurts Mom & Pop and would-be entrepreneurs, but it also hurts the working class. New businesses are the engine of job growth, but new business formation has accelerated its decline in the last few years, hitting record lows.
This gives Republicans an opening to explain that they can deliver on Obama's promises of helping the middle class and the working class, but they can do it by reversing Obamanomics — cutting everyone's taxes, undoing the most onerous regulations, ending trickle-down corporate welfare and so on.
Call it free-market populism, or libertarian populism.
Trig's Supermarkets, in Wisconsin, is an emblematic victim of Obamanomics. Trig's employs about 1,100 people, with about two-thirds working part-time, according to local TV station WJFW. Under Obamacare, anyone who works more than 30 hours per week is considered full time, though, and Trig's will be forced to provide health-care coverage for them.
The company crunched the numbers and decided this would spell bankruptcy. So, they told their workers their hours would be cut to below 30 per week. Nobody is happy with this, but the alternative was laying off all 1,100.
In a couple of ways, this story shows how Obamanomics undermines its stated goals and creates an opening for free-market populism.
Big-government regulations are supposed to hold big business accountable. But Trig's story shows how they often do the opposite. Recall Walmart loudly supported Obamacare's employer mandate, and Costco's founder — who also spent at least $180,000 trying to elect Obama — publicly lobbied for Obamacare.
Walmart and Costco can afford the costs of government — and Costco even got a shout-out from Obama in his economics speech. Smaller employers aren't so lucky.
Government tends to benefit the big and well-connected, and that's not Mom & Pop. Every small-business owner is a potential Republican if the GOP becomes the party of free-market populism.
More important, though — and more numerous — are the hundreds of Trig's employees seeing a reduction in hours. Obamacare was supposed to help them. Obama, on his economic-policy tour, suggests more government intervention will help them. But Obamacare is hurting them. Why should more of the same help?
Obama is right about the middle class being left behind. The working class is faring even worse. This doesn't call for more Obamanomics. It calls for unrigging the game that Washington has rigged.
There is a new lot of postings by Chris Brand just up -- on his usual vastly "incorrect" themes of race, genes, IQ etc
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Posted by JR at 12:35 AM