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25.1.12

F.U.B.A.R.

Interesting article popped up on Drudge today saying that the number of US citizens renouncing their citizenship between 2008 and 2010 increased 1000-fold.  In the first half of 2011, the number was running at over 1,000, which indicated a possible doubling over 2010 numbers.

According to the article, the primary reason given for this rather dramatic move was the IRS.  It wasn't the level of taxes, which is bad enough, but the fact that the IRS lies to people about agreements it makes with them to settle past claims, and the overall nightmare that is known as the US Tax Code (code being the operative word here, since it is designed to keep anyone from knowing it).

Most folks don't realize that the US is the only country in the world that requires its citizens to file returns every year, regardless of whether they live and work in the US, or not.  On top of that, new regulations require the revealing of every asset, bank account and financial holding a person has outside the US.

Oh sure, some will say, that's because so many rich people, like Newt Gingrich and Mitt Romney, hide their money in tax havens, and they need to 'pay their fair share.'  Of course, the law doesn't affect people like that.  They know what holes were written into the law to permit them to get away with hiding their assets.

If you know what you are doing, all you have to do is set up a couple of dummy corporations in the few remaining 'tax havens' and POOF!  You money disappears off the IRS radar.  Corporations know this and use it to their advantage, as well.

An example?  A US corporation, we'll call it CorpX, registers in Delaware, which has lots of corp-friendly laws.  It then sets up a wholly-owned shell corp in someplace like the Virgin Islands or one of the other Caribbean ghost nations.  It hangs out a shingle and pays some lawyer to get mail dropped at his office.  The shell corp then does business around the world.  Through accounting quackery, all profits are offshored in low-tax jurisdictions, while all losses are repatriated to the mother corp, which then uses them to offset income and avoid taxes at home.

This is how massive corporations with billions in income pay absolutely no taxes in the US, even though they are US-registered entities.

But this is off track a little.  They point here is that the tax code has become so onerous and heinous that people are literally forced to renounce their citizenship in order to stay out of bankruptcy due to tax burdens.  They little guy doesn't know or can't afford all the little comforts written into the code to protect the Big Guys.

The fact is that most expats pay taxes on income in the jurisdiction where they live, and most countries leave their citizens alone when they live outside the home jurisdiction.  Not the US.  It's long arm reaches out, and even when the expat doesn't owe taxes, due to local payment and tax treaty provisions, the IRS still wants paperwork.  If you don't know all the thousands of applicable rules, you are liable to quite easily miss one or two (hundred).  And when you do, the IRS comes down like vultures on a rotting carcass and eat you alive with penaties and fines and other fun things.

Of course, even renouncing citizenship doesn't protect you.  The US Code provides that any and all taxes and penalties that were due up to the point a person dropped their citizenship are still due in perpetuity.  Believe me, you made a mistake somewhere and they will hold it againt you until you die.  And then they'll take it from your heirs.

The mafia only wishes it had the 'power' and thuggery available to that bunch of thieves.

Recently, Indonesia strengthened its laws regarding citizens living and working abroad.  Any income they receive while working outside the country is not reportable at home, as long as it is taxed in the foreign jurisdiction.  It also allows folks to discontinue their NPWP, which is the local version of the Social Security Number (SSN) for a variety of reasons, including extended stays outside the country.  Granted there's a pretty stiff set of requirements, including an immediate audit by the tax man, but try that under any circumstances with an SSN.  You are virtually branded in the US at birth and can not extract yourself for any reason.  Even residents in the US who get an SSN while they are living and working in that country are stuck with it for life, and the IRS can and will come after their income and assets anywhere in the world.

I wouldn't have such a great problem with all this, except the code is written to protect the Big Guys and shaft the little guys.  The BGs pay little or no taxes by playing 'hide the sausage' in various jurisdictions and through various entities.  The LGs are the ones who get the sausage broken off on the relative pittance that they earn, and the pitiful bank accounts and occasional beach house in Tahiti.

If ExxonMobil or GlaxoWellcome or Citibank paid their 'fair share,' I'd feel a lot better about getting stiffed.  But when the burden rests on us little guys because the Big Guys lobby their way out of billions in liabilities, it rubs salt in the wound.

All taxes anywhere are a sham.  After all, what exactly has any government ever done to help you make money?  All I have ever witnessed anywhere in the world are a bunch of lazy do-nothings on the public teat sucking my life-blood for...what?  Does the government make any laws that help you or me earn a living?  Au contraire.  Does government protect us from predatory practices that threaten our livelihoods?  Banish the thought...they are a major part of the problem.  Does government do anything at all to aid and abet us little guys in creating and amassing wealth?  Hahahaha!

So just exactly what are we paying all these taxes for?  What services do they render us?  What benefit do they buy us?  In fact, outside of paying a bunch of lard-assed bureaucrats, bloated militaries and non-productive members of society, what do we get for all the trouble and money we go through to pay our 'fair share?'

Apparently, there are a couple of thousand people a year, and growing, who think that at least one country is so screwed up that it is easier to switch citizenship than fight the corruption and greed at home.  That's a sure sign of a sick system.

Having paid taxes in a few countries, I know that most have a fairly straight-forward system with a single-page form.  It takes all of a few minutes to work up your annual dues and settle up.  I have never had to file less than ten pages in the US, and it takes the better part of a week or two to calculate and re-check everything before filing (God help you if you make a mistake).

What makes it even more egregious is that the IRS is nothing more than the collection arm for a private banking cartel called the Federal Reserve.  Sorry, but none of your taxes is paid to the US Treasury.  US citizens spend all that time and effort and money on tax preparation firms to pay back the Fed for all the money Congress has borrowed.

And here's the Big Problem...the US debt stands at around $15 trillion dollars, and there's not nearly enough money in circulation to ever pay it back.  It's an eternal game of 'bend over the barrel,' and we're on the receiving end.  Come next April 15th, remember whose fault it is that has caused you so much pain.  It was Congress who set up the Fed and Congress who borrowed the money and stuck you with the bill.

It's enough to make a guy want to renounce his citizenship.  Glad I'm a Texian!

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