A “Wake Up Call” for U.S. Tax Policy – Inversions, Planning & Corporate Tax Rates http://t.co/xI9Qg2qY1r guest post by John Richardson
— U.S. Expat Canada (@USExpatCanada) October 9, 2014
Although U.S. tax rates are important and must NOT be uncompetitive, the recent discussion of “inversions” and of Americans abroad “renouncing citizenship”, should prompt a rethinking of how the U.S. tax system should work. Who should be subject to U.S. tax? For what reason? On what kind of income?
This article is a must-read as it draws interesting parallels between the plight of American corporations abroad and American citizens abroad. Commenting gives us an opportunity to bring attention to our situation. You can read and comment here.
Here is an excerpt from this ingenious article:
What “inversions” have done is to have drawn attention to BOTH the problem of high U.S. corporate tax rates AND the reality that the U.S. claims the right to tax “foreign profits” that are NOT earned in the United States. Yes, the U.S. is the only country in the world that claims the right to tax profits that are earned in other countries. In the same way that the U.S. requires American citizens who do NOT live in the U.S. to pay U.S. tax on earnings outside the U.S., American Corporations are required to pay tax on profits that are earned outside the U.S. Significantly Americans living abroad are renouncing their citizenship in unprecedented numbers. (In fact the U.S. Government has just increased the “renunciation fee” by more than 400%.) President Obama has implied that “inversions” are the corporate equivalent of “renouncing citizenship”. U.S. companies are performing “inversions” – renouncing citizenship – at an unprecedented rate.
It is important to note that these “renunciations of citizenship” (whether personal or corporate) are NOT the result of high U.S. tax rates. They ARE the direct result of the uniquely American policy of claiming the right to levy taxes on money earned in other countries and (at least in the case of Americans abroad) on people who are NOT residents of the U.S. (Because U.S. citizens abroad also pay tax in their country of residence, they may be subjected to significant double taxation.) Once again, the United States of America is the ONLY modern country that has such a tax policy.
Any news from the UN complaint?
See September 10, 2014 update at the Human Rights Complaint link on the upper right-hand corner of the home page: http://isaacbrocksociety.ca/2014/07/28/human-rights-complaint-on-behalf-of-all-u-s-persons-abroad-has-now-been-submitted/. The next meeting to consider submissions will next spring, as far as we can tell.
It was wonderful how adeptly John Richardson wove in citizenship-based taxation into his guest post about corporate taxation. It was plain to see the similarities between US companies and US individuals where US tax policy overreach is concerned. However I also like how JC in his comment pointed out the differences. Overall the guest post and the comments, so far, are top notch. The recent comment by QuitetheCentrist is interesting too.
I don’t want to be a pest, but is there anything you can add to your complaint as a result of your experience at the consulate afterwards? There’s only 62 complaints so far.
You make my point. I was pointing out that the Income tax is the most evadable tax ever invented. Cicero in 33 BC said ”an honest mant will pay more taxes on the same income, than a dishonest man will.
The modern version of the income tax is a tool invented by Karl Marx to strip wealth from the middle class and give it to the lower class. The lower class will then have no incentive to earn their own money. So the progressive income tax is evaded by the dishonest and it robs the one who earns it and disencentives the poor from ever earning for themselves, injuring all concerned.
I was not simply picking on all of a certain profession, but I was pointing out that those who earn most of their incomes in cash, will simply never declare all of it for taxation and you know I am telling the Gods honest truth!!!!
The best way to tax everyone except the low earning and truly poor who cannot by ability earn, is the FairTax. House Bill HR25 and Senate Bill SB122, has been introduced in every new congress since 1999 and has never had a hearing before the Committee on Ways and Means, the place where all tax bills start. The reason it hasn’t had a hearing is the Marxist Idea lets every member of the committee extort campaign contributions from the taxpayers who benefit from the ”Tax Extenders” that are voted on every 2 years which by design, their design, happens to be election years.
I am happy to stay American. I am half American Indian and the other half is English who immigrated here in 1656. I want to stay American, but I want back the America, before they went nuts in Washington D.C. and in every College and University whose professors are children and grandchildren of the Marxists sent by Lenin and Stalin to convert the civilized world to Marxism. I won’t leave it I want to change it…. The FairTax is the change I want to start with and a balanced budget with a loan payback provission thrown in scond and last I want some common sense to prevail in D.C. This may be too much for an old guy to aspire to but I hope to convince a bunch of young people to follow my lead.
If you are not guilty don’t be insulted, but if you are guilty, I hope to insult you often.
Noone: Sadly, there is no news yet from the UN on our Human Rights Complaint. If there is none we will likely look at resubmitting well in time for their next meeting which will likely be in the spring. Thanks for checking in!
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Another day, another inversion. Steris has agreed to acquire Synergy Health plc. A new company will acquire both companies with Synergy shareholders receiving cash and 30% of the new company.
“STERIS expects that New STERIS will have an effective tax rate of approximately 25% beginning in fiscal year 2016 and that the Combination will provide New STERIS with more flexible access to its global cash flows. The STERIS Board believes that the Combination will put STERIS in a stronger and more sustainable financial position to compete internationally.”
Apparently the new roadblocks for renunciants and inversions are not having the desired effect.
When you do anything there are always unintended consequences, but when you do realy dumb things the unintended consequences are really, really dumb. The Marxist Progressive Income Tax was a dumb idea and the consequences are so dumb that it is causing a worldwide financial crisis. When the U.S. sneezes the world catches pneumonia and I hear the U.S. sneezing and the world in crisis, with U.S. politicians are worrying about re election instead of trying to stop the world depression, we can see coming..
Getting back to the FATCA topic…. I commend this woman who wrote on this blog. http://fbariswrong.wordpress.com/2014/10/12/fatca-and-the-patriot-act-identify-innocent-us-citizen/