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"First they ignore you, then they laugh at you, then they attack you, then you win."
~ Gandhi |
In an interview with NPR, Internal Revenue Service Commissioner Doug Shulman insists most people have a positive experience with the IRS:
“When people hear the letters, ‘I-R-S,’ sometimes they have a negative connotation. But 80 percent of Americans get an average of a $3,000 refund. So most people actually have a very pleasant experience with us.”
1 – The U.S. tax code is now 3.8 million words long. If you took all of William Shakespeare’s works and collected them together, the entire collection would only be about 900,000 words long.
2 – According to the National Taxpayers Union, U.S. taxpayers spend more than 7.6 billion hours complying with federal tax requirements. Imagine what our society would look like if all that time was spent on more economically profitable activities.
3 – 75 years ago, the instructions for Form 1040 were two pages long. Today, they are 189 pages long.
4 – There have been 4,428 changes to the tax code over the last decade. It is incredibly costly to change tax software, tax manuals and tax instruction booklets for all of those changes.
5 – According to the National Taxpayers Union, the IRS currently has 1,999 different publications, forms, and instruction sheets that you can download from the IRS website.
6 – Our tax system has become so complicated that it is almost impossible to file your taxes correctly. For example, back in 1998 Money Magazine had 46 different tax professionals complete a tax return for a hypothetical household. All 46 of them came up with a different result.
7 – In 2009, PC World had five of the most popular tax preparation software websites prepare a tax return for a hypothetical household. All five of them came up with a different result.
12 – The United States is the only nation on the planet that tries to tax citizens on what they earn in foreign countries.
13 – According to Forbes, the 400 highest earning Americans pay an average federal income tax rate of just 18 percent.
14 – Warren Buffett had an effective tax rate of just 17.4 percent for 2010.
15 – The top 20 percent of all income earners in the United States pay approximately 86 percent of all federal income taxes.
18 – Some tax havens are doing a booming business in setting up sham headquarters for U.S. corporations. For example, the city of Zug, Switzerland only has a population of 26,000 people but it is the headquarters for 30,000 companies.
19 – In 1950, corporate taxes accounted for about 30 percent of all federal revenue. In 2012, corporate taxes will account for less than 7 percent of all federal revenue.
Last year, almost 1,800 people followed Superman’s lead, renouncing their U.S. citizenship or handing in their Green Cards. That’s a record number since the Internal Revenue Service began publishing a list of those who renounced in 1998. It’s also almost eight times more than the number of citizens who renounced in 2008, and more than the total for 2007, 2008 and 2009 combined.
But not everyone’s motivations are as lofty as Superman’s. Many say they parted ways with America for tax reasons.
The United States is one of the only countries to tax its citizens on income earned while they’re living abroad. And just as Americans stateside must file tax returns each April – this year, the deadline is Tuesday – an estimated 6.3 million U.S. citizens living abroad brace for what they describe as an even tougher process of reporting their income and foreign accounts to the IRS. For them, the deadline is June.
For those wishing to legally escape the filing requirements, the only way is to formally renounce their U.S. citizenship. Last year, IRS records show that at least 1,788 people did, and that’s likely an underestimate. The IRS publishes in the Federal Register the names of those who give up their citizenship, and some who renounced say they haven’t seen their name on the list yet.
The State Department said records it keeps differ from those published by the IRS. They indicate that renunciations have remained steady, at about 1,100 each year, said an official.
The decision by the IRS to publish the names is referred to by lawyers as “name and shame.” That’s because those who renounce are seen as willing to give up their citizenship primarily for financial reasons.
There’s also an “exit tax” for the very rich who choose to leave. During the last 25 years, a number of millionaires and billionaires have renounced their citizenship. Among them: Ted Arison, the late founder of Carnival Cruises, and Michael Dingman, a former Ford Motor Co. director.
But those of more modest means renounce, too. They say leaving America is about more than money; it’s about privacy and red tape.
LIABILITY, NOT PRIVILEGE
On April 7, 2011, Peter Dunn raised his right hand before a U.S. consular officer in Toronto and swore that he understood the consequences of giving up his U.S. citizenship. Dunn, a dual U.S.-Canadian citizen who has lived outside the United States since 1986, says he renounced because he felt American citizenship had become more of a liability than a privilege.
[Related: Top 10 Tax-Procrastinating Cities]
As an American, Dunn had to file tax returns and report all of his bank accounts – even joint accounts and his Canadian retirement fund. If he didn’t, he would be breaking U.S. law and could face penalties of up to $100,000 or 50 percent of his undeclared accounts, whichever is larger. Dunn says he was tired of tracking IRS policy changes, and he had no intention of returning to the United States. Renouncing his citizenship, as he puts it, was “a no-brainer.”
“If it was just me then it would be one thing,” says Dunn, a part-time investor who worried that having to share information with the IRS would deter future business partners – and upset his wife, who is Canadian. “Disclosing joint accounts I hold with my wife and anyone I ever want to do business with – that’s just too much. My wife’s account is none of their business.”
Dunn, who blogs about expatriation, takes issue with being characterized as a tax evader. He says the taxes he pays in Canada are higher than what he would pay in the United States, and he says he had always complied with the IRS before renouncing. But, Dunn says, the IRS approach to enforcing compliance is misguided. “It’s making life difficult for a lot of people,” he says. “It’s driving us away.”
OLD, NEW REGULATIONS
Dunn is referring to two filing requirements that affect Americans abroad: the Report of Foreign Bank and Financial Accounts – which has been around since 1970 but now carries penalties for noncompliance – and the Foreign Account Tax Compliance Act, passed in 2010 with the aim of reducing offshore tax evasion.
The first regulation requires all Americans, including those living abroad, with at least $10,000 in overseas bank accounts, to file a supplementary form disclosing all of their foreign accounts. That includes any accounts in which the U.S. citizen has a financial interest. That could include a joint account with a spouse or child, accounts for corporations in which the American owns more than 50 percent of the value of shares of stock, or any trust or estate that benefits the U.S. citizen.
Lawyers report that banking is a big reason why people renounce. “I hear about banking problems again and again and again,” says Phil Hodgen, an attorney who has been helping Americans expatriate since 2008. The new reporting rules, he says, pose “a huge administrative burden. It’s made Americans too expensive to keep.”
Francisca N. Mordi, vice president and senior tax counsel at the American Bankers Association, says she has received a number of calls from Americans in Europe complaining about banks closing their accounts. “They’re going to drop Americans like hot potatoes,” Mordi says. “The foreign banks are upset enough about the regulations that they’re saying they just won’t keep American customers, and it’s giving (Americans living abroad) a lot of sleepless nights.”
Genette Eysselinck, a friend of Laederich’s, renounced early this year. Her husband, a European Union civil servant, saw no good reason to share his account information with the IRS, she says. And after considering all her options, Eysselinck decided that renouncing was the best path.
“It created a lot of tensions around here,” she says. “Divorce seemed a little extreme, so I asked myself, ‘What am I gaining as an American?’ And the cons outweighed the pros.”
Eysselinck was born in Fort Bragg, North Carolina, and says she grew up on military bases all over the world. Her father, she says, was an Air Force pilot. Eysselinck has lived abroad for decades and no longer has any close connections in the United States.
(Read more)
Fantastic read. Please forward this to anyone involved in government labor offices.
The secret of professional happiness is to have no staff. It has taken me forty years to discover that.
I used to have 120 staff. Now I have none whatever. I don’t need any and I don’t want any. I’m happy as I am, on my own.
I was very fond of my staff. I selected them and trained them. I respected them for their skills and rewarded them for their creativity, imagination and enthusiasm. I paid them well.
They moved on when they got married or moved away. In my entire professional life I employed only six secretaries. I delegated to them and, in effect, they ran me. I saved a fortune in recruitment and training costs by having a stable staff.
I employed twice as many women as men, at all levels. That was not a deliberate policy. It just happened. I employed, paid and promoted on one criterion alone: talent.
I had no concept whatever of teamwork. It doesn’t work. I prefer to be a benevolent dictator. Teams reward incompetence and self-opinionation. I saw myself in a comparable position to that of a constitutional monarch. The crucial factor was not so much the power that I had but the power that I denied to anyone else.
I had a wonderful professional life and I am delighted to be in touch with most of my former employees.
Many have said that they would like to work with me again. But I don’t want that. I shall not employ staff ever again in the present political climate. Not one.
This entrepreneur is on strike. The interference by government has gone too far. I have every intention of working for another twenty years but I have no intention whatever of allowing myself to be controlled ever again by state-funded jobsworths.
With no employees, I am below their radar. I do not have to formulate policies and procedures and monitoring systems for them to inspect. I do not have to listen to the lectures and pontifications of people who have never created or run anything in their entire lives. I do not have to go on courses that have no value whatever to me but simply enable bureaucrats to tick their boxes. I’m free of all that.
Most of all, I value being free from the sense that I was contributing to political ideas that I do not support. Even in the fully private sector, my work supported the State. It was my taxes, and those of staff in jobs that I created, that kept the State in funds so that it could waste them on projects that I do not believe in. (Read more)
US currency used to be issued in denominations running up to $10,000 (including also $500; $1,000; $5,000 notes). There was even a $100,000 note issued for transactions among Federal Reserve banks. The United States stopped printing large denomination notes in 1945 and officially discontinued their issuance in 1969, when the Fed began removing them from circulation. Since then the largest currency note available to the general public has a face value of $100. But since 1969, the inflationary monetary policy of the Fed has caused the US dollar to depreciate by over 80 percent, so that a $100 note in 2010 possessed a purchasing power of only $16.83 in 1969 dollars. That is less purchasing power than a $20 bill in 1969!
Despite this enormous depreciation, the Federal Reserve has steadfastly refused to issue notes of larger denomination. This has made large cash transactions extremely inconvenient and has forced the American public to make much greater use than is optimal of electronic-payment methods. Of course, this is precisely the intent of the US government. The purpose of its ongoing breach of long-established laws regarding financial privacy is to make it easier to monitor the economic affairs and abrogate the financial privacy of its citizens, ostensibly to secure their safety from Colombian drug lords, Al Qaeda operatives, and tax cheats and other nefarious white-collar criminals
Now the war on cash has begun to spread to other countries. As reported a few months ago, Italy lowered the legal maximum on cash transactions from €2,500 to €1,000. . . .
US currency used to be issued in denominations running up to $10,000 (including also $500; $1,000; $5,000 notes). There was even a $100,000 note issued for transactions among Federal Reserve banks. The United States stopped printing large denomination notes in 1945 and officially discontinued their issuance in 1969, when the Fed began removing them from circulation. Since then the largest currency note available to the general public has a face value of $100. But since 1969, the inflationary monetary policy of the Fed has caused the US dollar to depreciate by over 80 percent, so that a $100 note in 2010 possessed a purchasing power of only $16.83 in 1969 dollars. That is less purchasing power than a $20 bill in 1969!
Despite this enormous depreciation, the Federal Reserve has steadfastly refused to issue notes of larger denomination. This has made large cash transactions extremely inconvenient and has forced the American public to make much greater use than is optimal of electronic-payment methods. Of course, this is precisely the intent of the US government. The purpose of its ongoing breach of long-established laws regarding financial privacy is to make it easier to monitor the economic affairs and abrogate the financial privacy of its citizens, ostensibly to secure their safety from Colombian drug lords, Al Qaeda operatives, and tax cheats and other nefarious white-collar criminals
Now the war on cash has begun to spread to other countries. As reported a few months ago, Italy lowered the legal maximum on cash transactions from €2,500 to €1,000. . . .
As one “expert” on underground economies instructs us, “If people use more cards, they are less involved in shadowy economy activities,” in other words, secreting their hard-earned income in places where it cannot be plundered by the state. . . . (Read more)
¶ The Hyundai Motor Company, the automaking subsidiary of Hyundai, the South Korean conglomerate, has quietly ended its business dealings with Iran, where it had extensive operations, including a joint venture to make cars. United Against Nuclear Iran, an American group that has advocated economic sanctions to pressure Iran over its disputed nuclear program, has reclassified Hyundai Motor, putting it in the “withdrawn” category on a list the group has compiled of foreign businesses that deal with Iran. Hyundai Motor officials did not respond to requests for comment. A strict new American law is putting pressure on foreign companies to reduce or eliminate their operations in Iran or risk penalties in the United States market. Hyundai is the second big foreign automaker in a week to pull back from Iran. Last week, General Motors said its French partner, PSA Peugeot Citroën, had suspended shipments of components to the Iran Khodro Industrial Group, an Iranian vehicle maker, to comply with American restraints on Iran trade. (Read more)
Tax dollars at work:
The FDA has won its two-year fight to shut down an Amish farmer who was selling fresh, raw milk to eager consumers in the Washington region, after a judge this month banned Daniel Allgyer from selling his milk across state lines, and he told his customers he’ll shut his farm down altogether.
The decision has enraged Mr. Allgyer’s supporters, some of whom have been buying from him for six years and who say the government is interfering with their parental rights to feed their children. But the Food and Drug Administration, which launched a full investigation complete with a 5 a.m. surprise inspection and a straw-purchase sting operation against Mr. Allgyer’s Rainbow Acres Farm, near Lancaster, said unpasteurized milk is unsafe and said it was exercising its due authority to stop its sale from one state to another. (Read more)
They may just be the hardest drugs on the market, if the FDA are to be believed.
A company which sells walnuts has been told they are dealing in drugs because their packaging suggests health benefits which the Food and Drug Administration has not approved, it has been reported.
A fiercely-worded letter from the agency allegedly insisted Diamond Foods, from Stockton, California, remove the health claims or send off for a new drug application if it did not wish to be closed down.
The nut company has been selling its products with packaging which states the omega-3 fatty acids in walnuts have been shown to reduce the risk of heart disease and some types of cancer.
But while the claims are backed up by research, including 35 published medical papers supporting assertions that eating walnuts improves vascular health and may reduce risk of heart attacks, the FDA is said to have insisted the company is ‘misbranding’ its foods because the ‘product bears health claims that are not authorised by the FDA’. (Read more)
As the sport of Mixed Martials Arts (MMA) continues to grow at a rapid pace, marked improvements have been made in all areas of the industry with only one exception that stands as a potential impediment to MMA’s continued meteoric rise – judging and refereeing. Not surprisingly, judges and referees are both aspects of the various state athletic commissions that sanction MMA, and as such, no competition is allowed in this area. One of the many cumbersome regulations the state athletic commissions mandates is that you must use the judges/referees assigned to you.
The atrocious judging, which UFC president Dana White has said is the greatest threat to the continued growth of the sport, is due to two factors: the incompetency of the judges assigned to MMA events (many are simply recycled boxing judges with little to no understanding of the sport of MMA) and the nonsensical 10 point must scoring system imposed upon MMA. It should not be too surprising that mandating the use of another sport’s scoring system for the sport of MMA may not produce the most desirable results.
Even worse than judging, is the refusal to allow the many free market solutions that have already cropped up, to provide competent referees. As referees are literally tasked with protecting the fighter from serious injury, or even death, one would think that refereeing competency would be set at the highest level, with little to no tolerance for inadequate performance. The reality is almost the exact opposite. Here is the most recent example (of which there are so many) of gross referee incompetency that directly endangers the safety and welfare of the fighter: From popular MMA website, Cage Potato’s recap of last night’s fight, Strikeforce: Tate vs Rousey – The good, the bad, and the ugly under the section for “the bad”:
– The referee in Tate vs. Rousey not stopping the fight until about eight seconds after Tate’s arm had grown a new elbow. Tate showed her warrior heart by not tapping until the pain was overwhelming; the ref showed his ignorance by not stopping the fight until that moment. (Read more)
I want very badly to remain in the voluntary sector of the economy. I’ve had enough violence.
ars were also found next to bodies lying in coffins for viewing by relatives the next day, police said.
A businessman and a morgue attendant have been arrested. The businessman was said to be renting part of the morgue for his funeral services firm.
They told police the caviar had been intended to personal use during the pending new year celebrations.
The red and black caviar, weighing 175kg (385lb), apparently comes from endangered species. The red caviar, which made up most of the haul, was stored in five containers marked “Aviation Security. Inspected”.
Police also found caviar in a fridge in a morgue workers’ rest area and among the businessman’s belongings.
It is unclear whether the men, aged 64 and 42, will face charges as possession of caviar is not illegal. Such a large amount would have cost a fortune on the open market and much of the trade in Russia is on the black market. (Read more)
Arab farmers will be granted egg production quotas for the first time in the history of the State of Israel. The cabinet decided to grant such quotas a year ago based on a recommendation from the Agriculture Ministry in a bid to prevent intervention from the High Court of Justice.
Six Arab farmers who met the ministry’s quality standards have now been chosen. However, other Arab farmers are complaining that the conditions set for receiving an egg quota make it financially not worthwhile.
Unofficially, milk and egg production have always been considered “Zionist agricultural branches” and have been chosen to provide a significant part of the livelihood for Jewish agricultural settlements – and Arabs and other minority group farmers have been consistently excluded from these sectors for years with various justifications. The production of milk and eggs and their sale in Israel requires licenses from the Agriculture Ministry or other statutory bodies under the ministry’s auspices.
The Knesset Economic Affairs Committee met on Tuesday to discuss and approve the Agriculture Ministry’s regulations for the production and sale of eggs for 2012. In 2011, 3,000 hen houses for egg production produced 1.9 billion eggs, and the plans for 2012 forecast similar numbers.
. . . .
Only Israeli citizens qualify for the quotas, say the farmers, and the quotas are available only in “national priority areas,” and the farmers must have land zoned for raising livestock and zoned for chicken coops. In addition, the growers must meet veterinary requirements and other restrictions. (Read more)
Green is the new color of corruption. “There’s just one problem: ‘Outside a handful of laboratories and workshops,’ the New York Times reports, cellulosic ethanol ‘does not exist.’
This has not, however, prevented the Environmental Protection Agency from levying penalties on petroleum companies for failing to purchase this nonexistent fuel.”
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