Oh, won't somebody please think of Mitt Romney???

The bankers, billionaires, and wealthy elite are losing one of their favorite offshore tax havens. The Cayman Islands has finally agreed to cooperate with the U.S., and make it more difficult for the wealthy to stash money overseas. Officials in that nation have agreed to accept provisions of the Foreign Account Tax Compliance Act, which will take effect in July of next year. After that, the Caymans will have to alert our Treasury Department about Americans' who have more than $50,000 dollars stashed in tax-free accounts in that nation.

The FATCA was enacted in 2010, after a Swiss banking scandal revealed that wealthy Americans were hiding substantial fortunes overseas. According to Reuters, banks and financial institutions that refuse to comply with the new law will be hit with a 30 percent withholding tax, which would essentially freeze them out of U.S. financial markets. The deal between the U.S. and the Caymans also puts pressure on several other low-tax nations, like Luxembourg, Bermuda, and the British Virgin Islands, to sign on to similar plans meant to fight U.S. tax evasion.

As it becomes more difficult to hide money offshore, rich people will actually have to pay their taxes, and there will be incentive for the wealthy to invest here at home. The days of the rich skipping out on their patriotic duty of paying taxes could soon be over, and the wealthy may have to start contributing to the care of our commons, which made their vast fortunes possible in the first place.

Comments

Carson L's picture
Carson L 9 years 25 weeks ago
#1

Thom pretty much nailed this one, as usual! I'm gonna just spend some quiet time with each and every one of my different monotheistic devotions in order to know for certain that I've offered my deepest and most sincere gratitude to each divine influence which may have helped us mere mortals manifest this great moment for us all to bask in! And if this news flash happens to be bad news for you, then I'd just suggest you go bask in one of your yachts' jaccuzis and thank the heavens for any one of your millions of other blessings.

jpohl 9 years 25 weeks ago
#2

Odd, when I think of Mitt Romney I wonder what the response would have been if he was elected President and unilateraly decided to postpone some of the Obamacare imlpementation without the advise and consent of Congress.....

ckrob's picture
ckrob 9 years 25 weeks ago
#3

The unappreciated cancer in our economic system is the current disconnect between money and productivity. When the rich can make money on paper transactions and the rest of us make less and less on actual wealth production, the monetary system WILL collapse. It's as though carving Adam Smith's proverbial ax handle no longer produces wealth but selling someone a picture of the handle reaps a great deal of cash.

Gator Girl 9 years 25 weeks ago
#4

About damn time - and I can only HOPE that Mitt is caught up in this. But, somehow that weasel will get out of this somehow - mark my words. The biggest abusers will not suffer - just the lower level thiefs who have hidden their funds will pay the price.

historywriter's picture
historywriter 9 years 25 weeks ago
#5

I think of Mitt Romney frequently. As much as I deplore much of what is going on today, I think how godawful it would be under Mitt.

stecoop01's picture
stecoop01 9 years 25 weeks ago
#6

Since this law can only be used against foreign banks and financial institutions that have connections to the U.S. financial system, the wealthy will just move their money to places that have no connections to the U.S. financial system. And what about converting their wealth to other forms such as gold, or diamonds, or platinum, or other precious metals or gems? That would be harder for the U.S. government to track, especially if blackmarkets are involved. All this law will do is drive the wealthy deeper underground and into more creative methods of hiding their wealth.

dowdotica's picture
dowdotica 9 years 25 weeks ago
#7

threw us all a bone huh? not much meat on it though. tell ya what? i'll believe it when i see it. say, hmm when i pull the IRS tax revenues report say in 2015-16? if i see not just a sizable increase but a monster increase in revenues then i will be convinced. but until then? likely just more bullshit to appease us working stiffs laying the golden egz they stash in the caymens! funny how so much wealth is generated on the back of so many and how very little has trickled down. oh, which brings me to AMerican exceptionalism and what that clown said the other day about those who work the hardest "will" reep the rewards? i wanted to call into the radio show and say' uh, sorry pal it's more like those who exploit those working the hardest are the ones who reep the wealth!" I'm still waiting Mr! been working hard all my life trying to rise above....hm, funny, America...

michaelmoore052's picture
michaelmoore052 9 years 25 weeks ago
#8

But Thom, the Republicans said I could get rich too if I work hard and go shopping at the mall.! I'm going to want to stash my millions somewhere too! I like the Caribbean- can't they make an exception?

Luis_L.'s picture
Luis_L. 9 years 25 weeks ago
#9

Rather than try to get rid of each tax haven one at a time Congress can end this with a comprehensive bill that prohibits Americans and American Corporations and Corporations the do business here to keep their income here and taxable. If they close the Caymans they will just move somewhere else and the cat and mouse game begins all over. There are plenty of small countries that would gladly take the money.

DAnneMarc's picture
DAnneMarc 9 years 25 weeks ago
#10

Bravo for Thom and our Country. Finally, a story that points our Nation in the right direction. Now we can raise some much needed tax revenue and encourage domestic investment that could generate domestic revenue. Hopefully, trade reform is just around the corner. If so, we might just be receiving the treatment that will stop the fatal hemorrhaging of our nation's lifeblood. I'll definitely drink to that.

Cheers!

DAnneMarc's picture
DAnneMarc 9 years 25 weeks ago
#11
Quote historywriter:I think of Mitt Romney frequently. As much as I deplore much of what is going on today, I think how godawful it would be under Mitt.

historywriter ~ I couldn't agree more with that. However, I have to think that Mitt's big downfall was his honesty. Coming out and saying, "I don't care about poor people...," or "We need to leave the banks alone and let them foreclose on people." Mitt had the one advantage of not beating around the bush, and telling us bedtime stories about how we would all live happily ever after on candy mountain. Sometimes I can't help but wonder what would be better--or worse--a lying gifted orator, or an honest scoundrel. The court is still out on that one. I suppose I should just relax and see what happens. After all, either I will deeply regret my criticism of The Obama Administration or I will deeply regret voting for the man. Either way, deep regret is on the horizon so I might as well say my peace while the sun shines.

bobcox's picture
bobcox 9 years 25 weeks ago
#12

30%? I think it should have been 40%.

Corporations that keep their cash overseas should also have penalties. I think it is all right for them to invest overseas in opportunities to bring raw materials back to U.S. territory (continuental, not or "protectorate"). The idea that they can use slave labor overseas and lay off American working people here and then keep their profits overseas to excape reasonable taxes is absurd. Any company doing this should be NOT allowed to do business or raise capital for investment here in the U.S.

2950-10K's picture
2950-10K 9 years 25 weeks ago
#13

Sounds great, in fact FATCA might turn out to be the best economic stimulus since the New Deal.

I've always been perplexed as to why someone receiving let's say two million per year in unearned income would be against at least a 50% tax rate. Considering that after $75,000 per year people's day-to-day happiness no longer improves, I would say that even the one million left after tax would cause more stress than it's worth.

As a kid who always had a paper route I recall that the lowest income families always tipped me more than the high income ones. In fact I remember the folks with more money than brains always seemed to be at the local bar.....maybe medicating their stress and unhappiness....John Boehner!!!

arky12's picture
arky12 9 years 25 weeks ago
#14

I was surprised when you mentioned this. I wonder what kind of backlash this will bring from the people who offshore their money. I'd love to be a fly on the wall.

DAnneMarc's picture
DAnneMarc 9 years 25 weeks ago
#16

A reply 2 chuckle8 from yesterday. I thought this deserved repeating today:

chuckle8 ~ What a lovely example. It makes perfect sense to me. Unfortunately, it is an example of fantasy. We aren't borrowing any money to invest in education in this Nation!! What planet are you from, anyway?

We aren't incurring debt on this planet from sending students to college, you see, Earthlings in the United States are currently debating how much interest they should charge on student loans. They are PROFITING not INVESTING!! The two are DIFFERENT!!There are no current National loans related to education. Education is a scam that is run by domestic loan sharks that turns a good profit at the expense of our next generation and the good of our nation. Good thing too! Because there are no jobs that demand an education left. "Would you like fries with that order, Sir?" does not require a four year term in an university. Sorry my friend but I don't buy your thesis. RTI 6X on student loans? Do the graduates know this? I know some that are still paying off their loans 10 years after graduation. 6X RTI? Really??? Is this monthly, annually, or in a lifetime? How has this incredible windfall not balanced our budget? You are doing a great job at supporting your claims; but a piss poor job at explaining reality. Maybe one of these 6X RTI students would care to write a comment on just how this happened? I am more than curious--and confused? Last I looked, most victims of student loan extortion were trapped working two menial labor jobs or more a day to pay down their debt and support themselves. Their education went to waste as their careers went overseas.

Quote chuckle8:Some of these cases based on history. FDR tried to balance the budget in 1936 and within a few months he woke up to what a bad idea it was; unemployment start rising again. Another example, Clinton balanced the budget and 1 year later the stock market collapsed.

Chuckle8 ~ Either you are intentionally making up history; or, did you just accidentally mixed these facts up? The Stock market crash of 1929 made it impossible for FDR to balance anything without raising revenue--which he did magnificently. When he did unemployment ceased to exist. A booming Stock market helped Clinton balance the budget during his term. However, the manufacturing industry which Clinton destroyed made balancing the budget after his terms impossible.

Your accounts of history make a good bedtime story for someone from another planet but do little to change my opinion. To restore prosperity to this Nation we must reestablish our revenue generating system, we must eliminate our deficit, and above all, we must pay our debt. There is no other way; and, inventing history while making up flakey theoretical voodoo nonsense about the economy is not going to do anyone any good--especially your own credibility.

Palindromedary's picture
Palindromedary 9 years 25 weeks ago
#17

jkh6148: Thanks for that link. Funny!!! And that's trickle down alright! Thank goodness for Ed Asner!

Palindromedary's picture
Palindromedary 9 years 25 weeks ago
#18

Guess what! The US is not the only ones with drones. Many other countries and even organizations like Hezbollah now have them. They even have a 5.5 pound drone that can easily be launched by one man and it is accurate and deadly. They even flew one towards an Israeli nuclear reactor just to see how close they can get. Iran has the capability of flying drones to Israel...and much further.

Now everyone has drones...ones that are weaponized. The pandora's box has been opened and drone warfare may be soon upon us. Those Japanese biological weapon balloons that they launched against us during WWII may not have been very effective but a barrage of drones (hard to shoot down because of their size) could easily carry miniaturized nukes. Yes, and they have those too!

http://www.youtube.com/watch?v=543EU5F14uE

ckrob's picture
ckrob 9 years 25 weeks ago
#19

When we start jamming the control signals from human drone operators, the drones WILL be programmed to kill without a human in control. Anyone think that may be an eventual problem? Also drones cobbled together with off-the-shelf components will not have an identifiable country of origin. So who do we shoot back at? All they/we need is a tactical nuke and a GPS coordinate.

DAnneMarc's picture
DAnneMarc 9 years 25 weeks ago
#20

ckrob ~ Put the tactical nuke inside the drone and let it blow itself up along with the target. You could have USA written all over the drone and no one would know where it came from because it would be completely disintegrated. Good point!

DAnneMarc's picture
DAnneMarc 9 years 25 weeks ago
#21

Palindromedary ~ Very informative! Thanks for that link! I often wonder what would happen if when my teacher in 3rd grade caught me chewing gum in class and asked, "Did you bring enough for everybody?" And I replied, "Yep! I sure did!," and got up and started handing out gum to all the other kids and finally handed the teacher the last piece, "And this ones for you, Teacher." I wonder if that would have shut her up or got me sent to the Principal's office? In either event, she would think twice about asking that stupid question again in the future.

Back to drones. Palindromedary you are always very pessimistic about these things. Look on the bright side. Iran has the capability of hitting Tel Aviv anonymously--yet, they haven't. Hezbollah had the opportunity to take out an Israeli nuclear reactor--yet, they didn't. The Taliban has the capability to take out an American city with a hand held nano nuclear device--yet it hasn't happened. All these facts show that "our" enemies--unlike the USA--may actually value life--even the lives of their enemies--more than we do. After all, are we not the only ones who use new weapon technology immediately after we perfect it just to see how many people we can kill? How many other countries use drones to kill people? How many other countries have used nuclear weapons on people? Far too often we project our own evil on others without cause. Then we become fearful of our own evil. I think there is a name for that--Bad Karma :-0

I think that most of the time the only thing we have to fear is ourselves. That is why the only behaviors we should be worrying about are our own. Funny thing about Karma--you always have complete control over it and no one to blame but yourself when you upset it.

That drone flown by the nuclear reactor was meant as a demonstration only. A ha ha look at what we can do, just like the Chinese surface to air missile that took out a US satellite a couple of years ago. No one practices a surprise attack on location. In addition, Hezbollah knows better than to attack a nuclear reactor, it would poison the region for everyone there as well as pose a huge hazard for people all over the middle east, Europe, Africa and Russia with the radioactive cloud that would result depending on which way the air was blowing. Hezbollah's reputation as the good guy over there would be lost in nanoseconds with such a catastrophic blunder. In addition, Israel would then have the green light to immediately make a big crater out of Tehran. The only group that really stands anything to gain from taking out an Israeli nuclear reactor is Israel.

Using a drone to take out Tel Aviv is another story altogether. So is using drones to take out people in Tel Aviv, Jerusalem, or anywhere else in Israel. That may be a serious real threat. The best indicator of that eventuality is the fact that it hasn't happened yet. Let us all hope it stays that way. Time will tell. Let's work on keeping our Karma happy ;-)

SteveS's picture
SteveS 9 years 25 weeks ago
#22

FATCA is a good first step, but, oh, how slow is the pace of progress.

ikeberltersen's picture
ikeberltersen 9 years 24 weeks ago
#23

A picture of the ax handle is right. I would add that many Americans are complicit in this sham, being more concerned with having the latest smartphone than having real goods that they can build their lives on.

dpille's picture
dpille 9 years 24 weeks ago
#24

From what I've heard there are allegedly 18,000 American Businesses doing Business out of the Cayman Islands. Funny thing is, that the population of the Cayman Islands is just under 52,000. Which means that there are 2.8 people working for each of these 18,000 American Companies. I can't think of too many Companies that can operate with just 2 people working there. 95% of these companies have to be just shell companies. We have to make that practice illegal.

dpille's picture
dpille 9 years 24 weeks ago
#25

I really think it's dumb that we encourage people and businesses to invest money overseas by not taxing it. We need to charge a 50% tax on money made overseas. We need to encourage American Businesses and wealthy individuals to begin investing money in America again. Money collected on those taxes can be invested in rebuilding our roads and schools, and putting people back to work.

We also need to pass a law that no Government monies, (ie Grants, subsidies, and contracts) be wasted on companies that pay excessive bonuses to their executives. The same law should apply to companies that send American jobs overseas.

Palindromedary's picture
Palindromedary 9 years 24 weeks ago
#26

DAnneMarc:
There is a Canadian company that is ramping up production of a 4 bladed helicopter drone that can not only be controlled remotely to fly to some destination, hover, send real-time videos back using wireless or bluetooth, and can also have a programmed itinerary to do it all even without being controlled remotely. It runs off of batteries and when it senses a low charge condition it can fly back to a landing pad where the batteries will be charged through induction (ie: it doesn't have to make electrical contact). All this can be yours for just over $500.00.

What better way of spying on your neighbors? But some neighbors are ready to shoot them down!

chuckle8's picture
chuckle8 9 years 24 weeks ago
#27

ckrob -- Love it!

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