Another article on famous entrepreneurs switching citizenship!
The Apple co-founder has resided for some time in Australia has recently stated that he is applying for citizenship and intends to remain there permanently:
The author of this article seems to think that he become the next big tech person to renounce US citizenship, which I would imagine would result in a huge media storm in about a year’s time should his name appear on a quarterly registrar. What do you think? Is he trying to get ready for FATCA?
Readers who live in Australia – How has FATCA been impacting your daily life or banking activities up to this point in time?
Boy. I wonder if he is paying his Australian taxes on his U.S. Foreign holdings as well as filing his FBAR and paying his U.S. Taxes on Australian income. Australia and New Zealand, having copied some provisions of U.S. tax policy by taxing “offshore” U.S. accounts including Social Security and U.S. tax sheltered accounts like 401Ks. This is only attractive if you are willing to move all your money to their shores to avoid the double taxation. But, given his income I am sure he has good tax advice.
*This article assumes he intends to renounce his US citizenship, which would be the logical thing for him to do, but it does not so state. There is certaisnly nothing illogical about becoming a naturalized citizens of the country where you live. Thousands of foreigners become US citizens every year. So why should there be any more fuss abut an American living in a foreign country electing to become a citizens of that country? That is just exercising the UN Universal Declaration of Human Rights which guarantees EVERYONE the right to leave any country, incliding his own, and return to that country. It was none other than Eleanor Roosevelt who worked very hard to and was successful in convincing the United Nations to ratify that declaration backd in 1948.
But we all know there will likely be a fuss. That’s because the US, with its extraterritorial policy of levying and collecting taxes beyond its own borders; within the sovereign borders of other countries, effectively denies this Human Right to its own citizens unless they irrevocably renounce their US citizenship. And it was Susan Rice, the US Ambassador to the United Nations, that effective led the charge in the UN Security Council to condemn the extraterritorial policy of Eritrea for taxing its citizens who live in another country. Why? Because it is a gross violatoin of the the UN Universal Declaration of Human Rights.
Consistency thou art a jewel.
I wouldn’t mind becoming a citizen of New Zealand myself. I’ve never been there, but it has a great reputation.
Wozniak lives in SoCal, but he has set up a bug-out shelter in Australia. Could you blame him for wanting an insurance policy against
The grey economy: how retirees rort the pension
At this point I think the majority of welfare-state citizens cheat the system, just look how f*****-up Australia’s tax and pension system is. My father and mother in law in SoCal, both in their mid 80’s, have received so much free prosthetic surgery (8! hips between them, knees, shoulders, eye pars, you name it!) it boggles the mind. Each surgury requires MRI’s and numerous tests. They both take dozens of medications every day. All free. But they also both receive inflation adjusted pensions from the county where they worked that long ago exceeded their original retirement payments. Yet both insist that they have never received a dime of welfare!
This Peter Schiff Pod Cast (at the halfway mark) is about a guy in Danville, Ca. whose safe deposit box at BA was looted for the claimed reason that he had no “SS number” . FBAR also forces US citizens to list their gold held offshore so obviously the US is gathering information about its citizens wealth. When the US charges 28% tax on capital gains on real money (gold) it is no wonder why. Sweden even wants to phase out paper money and go 100% electronic
The welfare state is coming for you, slave. You cannot run, you cannot hide.
Governments of the developed world need to know everything you have in order to implement their upcoming one-time wealth tax on everyone of 30% or more.
*@Wellington, a one-time wealth tax? That would be somewhat of a prescendent. Countries which currently have wealth taxes collect them annually, not just one time. And they are in addition to, not in place of, income and VAT taxes.
Why make it a one-time tax? Socialist economies have to be fed with ongoing tax revenues even though they devour themselves by confiscating the wealth that produces the tax revenue.
Yes it would be unprecedented, but we live in times of unprecedented public and private debt, don’t you agree?
I’m not privy to what people in government are thinking or planning; I’m just saying that going forward, governments will continue to take steps to expropriate the wealth of citizens. Who would have thought of FATCA ten years ago?
As the article mentions, a one-time wealth tax of an expropriationist nature on the world’s population might be one way of reducing current unpayable debt levels to a more manageable size. This is not the only idea I’ve heard. Another might be for the government to buy gold at 10,000 an ounce (or do what it can to “encourage” the price to rise to that level), forbid private ownership of it, and then devalue the Dollar to a corresponding extent. And the debts? Poof!
See also what the West German government did directly following WWII, with the “Zwangshypothek,” in which everyone owning and renting property had to pay a huge one-time wealth tax.
I don’t doubt that something along these lines is coming.
*I am afraid that a one-time wealth tax, not accompanied by massive cuts in government spending, would only servie to destroy our productive base. Goivernments would have to repeat the “one time” tax next year. That is about as productive as expecting a snowball to survive in Hell.
It is like burning the furniture to heat the house. What do you do when there is no more furniture left to throw on the fire?
Remember when PanAm sold its profitable Intercontinental Hotels subsidiary to generate cash to keep its money-losing airline in the air? That didn’t work either.
Bankruptcy proceedings is a good way to think about the problem. When a corporation goes bankrupt, it obtains court protection from creditors while raising cash (selling assets) to pay off loans. The Western governments are there now; they are utterly bankrupt in a declining world economy with shrinking tax receipts. They have massive debt overhang that is further burdening their economies. At some point, sooner or later, those debts will have to be paid.
You can think of this way. It will take s**t to hit the fan in order for governments to take the necessary steps to pay off their debt all at once (either by “unprecedented” expropriation, destroying the currency, or both). While the debt grows in size, things will gradually get more painful for the populace (and governments, therefore). All other solutions heretofore would have failed, and interest rates would start to rise, inflicting further pain. Governments would be simultaneously facing the existing and growing debt overhang (both deficits and unfunded liabilities), as well as the pointlessness of further spending to increase that debt. I believe there will be a moment when their survival will be threatened and they will finally bite the bullet to get the debt off their books. This may be a painful experience for all involved.
A government that goes through the pain of declaring bankruptcy and starting anew has a good chance of reigning in their spending, after having witnessed where their empty socialist promises have led. At least for a while. This is where I disagree with your analogy of burning the house to keep warm. Repayment of debt by expropriating wealth or destroying the currency would probably be a one-off event.
@Wellington: I didn’t read the BCG piece but I agree with the Zero Hedge analysis. I see either a one time wealth tax or a debt jubilee. The first option would mean that savers (wealth holders) would fractionally punished, the second means that everyone’s slate would be wiped free, including anyone holding any fractional reserve currency (since all fractional reserve currency is is really just someone else’s debt ).
I think that everything points to the one time wealthtax as the elites preferred option, here are some random facts that point in this direction:
– FATCA. Yes, this is the real reason for FATCA, it is the same as Argentina’s “corralito”.
– OECD acceptance of FATCA without protest. This has been discussed and agreed upon at Davos, BIS, Jacksonhole, IMF, etc.
– Holland’s push for a 75% income tax and the way that the majority of French seem to support this
– AML laws and recent AML enforcements on HSBC, etc
– Coordinated ECB, FED, Japan CB printing. This shows that they are ready to perform coordinated theft from their respective citizenry.
But the real looming issue is, as you pointed out, how they will handle gold. Simply revalue and let all those hoarders get rich without paying the onetime wealth tax? I think not. I’ll bet that they are going to institute some kind of coordinated gold transaction tax. Or perhaps all of the OECD would outlaw private possession of gold. Lets just hope that Jordan (Switzerland) grows a pair, and quick.
I agree, FATCA (especially in the way it leads to coordinated inter-government information sharing) is obviously part of the information gathering process on citizens. All the brouhaha about tax “fairness” is simply a marketing sheen for the real purpose of punishing and expropriating the wealth of the middle (and lower) class of citizens that live or have money abroad – not just the ultra-wealthy.
As for gold hoarders, I guess their fate will depend on what their respective governments (and national populations) want to do. I have reason to be optimistic about Switzerland, as there are popular movements to reinstitute gold currency.
Its about a lot more than “punishing and expropriating the wealth of the middle (and lower) class of citizens that live or have money abroad“, FATCA is about reporting, compliance and making sure the capital never leaves the country or the currency.
I am not so sure about Switzerland, they already sold half of their gold, UBS gave up its seat on the LBMA, and they haven’t used all their excess FX reserves to buy gold. Jourdan and the SNB are part of the CB cartel and Switzerland is likely to get sucked down the toilet bowl with all the other FED/US allies.
*As much of a worrier as I am, I nonetheless doubt if Western governments would suddenly impose a one-off 30% wealth tax on virtually everyone’s assets; there would be riots in the streets and complete societal breakdown. I could, however, see western currencies being substantially debased which is already taking place with all the money printing. We’re slowly being effectively robbed of our assets through quantitative easing but discretely enough so that the ‘man in the street’ will not comprehend this!
Right, FATCA is also about capital controls. Forgot to mention that. Jordan and his ilk, like Bernanke and all other CB employees worldwide, are minions of the owners of the worldwide equity tranche. However, in Switzerland there seems to be strong, fiscally conservative winds blowing, which I haven’t observed in other countries. Jordan is an appointee of the Swiss political class, which gives me hope that little Switzerland won’t follow the rest of the West down the toilet bowl.
Currency debasement is the most politically palatable option for tackling the financial crisis. I’m afraid however that creating 85 billion dollars a month, via the current QE program, is far from adequate for paying down our debts and getting back on sound footing. What we’ve seen so far is nothing compared to what’s coming down the pike. They will have to commit a real devaluation that everyone will immediately notice via prices rising overnight by a factor of 10 or more.
*@monalisa1776, You are so right. Printing money devalues what assets we have and thus confiscates them in a less perceptable way. But the end result is exactly the same. Over the past year a bowl of Chili at Wendy’s has gone from $0.99 to $1.29, and I paid $3.99 today for a papaya that about a year ago was $1.79 at that sasme store.
@Roger, Lisa, Wellington:
Currency debasement as it is happening does not extinguish debt it merely changes the subordination and adds yet more layers of debt. That is the problem as described by the BCG/ZH where they come up with 180% as some magical number. You cannot solve a debt problem with more debt. The FED could print dollars and give them directly to US persons, and then these persons could use it to pay down debt. It could be a partial jubilee. But would the sheeple pay down debt and would that stimulate the economy? And what would be in it for the banks? And foreign creditors?
On the other side of the coin we see this relentless OECD class warfare jihad. We see the socialists and communists refusing “austerity” and governments buckling at any sign of dissent. Even Romney and Ryan are insisting that the Republicans won’t cut SS or Medicare. They are not choosing austerity while they setting up capital controls. Believing their propaganda and not their actions could be very hazardous to your financial health.
Currency debasement would pay down debts. Look at every hyperinflation example in history. The government has liabilities fixed in Dollar amounts. Print 10x or 100x and then pay those fixed liablities. When you say, “you cannot solve a debt problem with more debt,” you obviously haven’t read my earlier posts. This is not what we’re talking about. We got to this point (i.e., growing debts) because governments were trying to solve debt problems with more debt. But the debt only grew as a result. I am arguing that at some point, they will have to pay the debts off. This means through currency devalution/destruction, wealth expropriation, or a combination of both.
I don’t understand what you mean by me “believing their propaganda and not their actions.” Come on, man. We’re both posting here so I think neither of us is ODing on Kool Aid.
@Wellington, somewhere our wires got crossed. I agree completely with your last post, they will try to “retire” debt, and they will turn on the sheeple.
No worries. Reading your post again, I notice you wrote “currency debasement as it is happening.” Yes, the current QE program doesn’t really help the government’s agenda much in retiring their debt. It’s a shame that so few people seem to be aware of what’s happening.
When I lived in Brazil in the late 1970s inflation was 80% per month. Large supermarkets has 150 checkout countres that were fully occupied only twice per month; on the mornings of the 15th and 30th of the month, which was payday. Grocery and other prices were increased generally twice a day, so on payday everyone rushed to the supermarket in the morning to turn their paychecks into groceries, knowing that the prices would be increasee about noon and their cash would buy less in the afternoon. Those indeed were very turbuolent times. But Brazil elected some corageous and capable leaders that turned things around. Today Brazil is not without problems, but it is one of the brighter spots in the world economy. Recently published information indicated that the #1 country from which persons are emigrating and obtaining Brazilian residence visas is the USA.
Taking the long view, all fiat currencies eventually die (yes, even the US Dollar will go the way of the Brazilian Cruzeiro). But let’s look at the bright side. Brazil is what it is today precisely because the Brazilian government at one point imposed the pain necessary to get out of its debt hole. Look at numerous other countries that did the same (Germany, Serbia, etc). Many of them rose out of their ashes, Phoenix like, to be the economic powerhouses they are today. Please don’t get me wrong – I am not trying to romanticize hyperiflation, war, or any of that. I am just saying that those who believe that countries that hyperinflated somehow died and ceased to exist, are wrong. Governments survived, real assets remained (but maybe changed ownership), and price discovery was finally allowed to do its business.
I also believe that what you described concerning Brazil will one day happen in the US (I know, <gasp>). It’s inevitable. US society and its political class are in denial, and meanwhile debt levels not seen since WWII are piling up. Something has to give.
*Wellington, here are some interesting statistics:
are 192 countries in the world. Guess which country has the largest current
account surplus? It is China. And number 2 is Germany, a tiny nation with only
1/5 the population and GDP of the US.
which country has the smallest current account balance (the largest deficit) and
is 192 on this list? The United States. The US current account deficit of the
US is 6 times greater than #191 on this list, which is Turkey.
is a real eye opener to rgw precarious financial situation of the US. If you
don’t think we are headed for a cliff, please look at the
numbers on this link.
are 2011 year-end statistics published by none other than the US Government. Rest assured that the US current account balance has increased substantially during 2012.
Wow, that statistic about the US is an eye-opener. I didn’t realize the current account deficit was so bad. That figure may change in the future when America returns to its roots (i.e., resuming domestic manufacturing, exporting energy in all forms, and letting its currency fall to a more realistic, post reserve currency level). Right now if anything the current account deficit figure shows how unsustainable America’s trade flows are.
*The US is still the largest manufacturer in the world, but these numbers clearly demonstrate the absolute unsustainability of its failure to export. And one of the key factors in this failure to export is its fiscal punishment of its citizens who relocate abroad to sell what we make through its repressive citizenship based tax policy (with all the high-cost tax assistance citizens who live and work abroad must employ in order to avoid massive penalties), as well as the double taxation of repatriated foreign earnings of subsidiaries abroad that have to be established to sell and service them. These are not tax revenue enhancers but tax revenue killers.
Look at the other end of the table and there is Germany with its massive positive balance of payments surplus. The difference is tax policy. Germany considers its citizens who create jobs at home by going abroad and capturing foreign markets as patriots. Germans are not double taxed to keep them home.
But practically every Senator and Congressman in Washington will tell you that every American who lives and works abroad is a tax-evading traitor. And while criticizing US industry for failing to export, they go out of their way to punish them tax-wise if they invest abroad to sell and support what is exported. So they don’t even try. It is the US Government, not China, that has tipped the playing field against us. If that is not the case, then explain what it is that China does to block exports from the US that it does not do to block imports from Germany? Germany has the largest trade surplus and positive balance of payments in its history and the lowest unemployment rate in 20 years. What a contrast in comparison to the US.
The bottom line of this crazy policy is massive trade deficits and a totally out of control balance of payments deficit.. Without exporting to pay for imports, we have to borrow from others; mainly China.How much longer can this go on? We don’t have a position of strength in getting tough with China, regardless of what both Romney and Obama seem to think.
We are going to have to learn the lesson of Greece before we know it. And that will not be fun. My days are numbered, but I fear for my children and grandchildren.
You reap what you sow. The law of the harvest, like the law of gravity, is not subject to Congressional or Presidential repeal.