Advertisements

American taxpayers officially screwed under ‘fiscal cliff’ deal

Those earning $30,000 will pay more taxes than others earning $100,000 – $500,000

By HAYLEY PETERSON | MAIL ONLINE | JANUARY 4, 2012

Middle-class workers will take a bigger hit to their income proportionately than those earning between $200,000 and $500,000 under the new fiscal cliff deal, according to the nonpartisan Tax Policy Center.

Earners in the latter group will pay an average 1.3 percent more – or an additional $2,711 – in taxes this year, while workers making between $30,000 and $200,000 will see their paychecks shrink by as much as 1.7 percent – or up to $1,784 – the D.C.-based think tank reported.

Overall, nearly 80 percent of households will pay more money to the federal government as a result of the fiscal cliff deal.

‘The economy needs a stimulus, but under the agreement, taxes will go up in 2013 relative to 2012 – not only on high-income households, as widely discussed, but also on every working man and woman in the country, via the end of the payroll tax cut,’ said William G. Gale, co-director of the Tax Policy Center.

‘For most households, the payroll tax takes a far bigger bite than the income tax does, and the payroll tax cut therefore – as [the Congressional Budget Office] and others have shown – was a more effective stimulus than income tax cuts were, because the payroll tax cuts hit lower in the income distribution and hence were more likely to be spent,’ he added.

Advertisements

Taxed to Death Americans Renounce their Citizenships

REUTERS | APRIL 17, 2012

A year ago, in Action Comics, Superman declared plans to renounce his U.S. citizenship.

“‘Truth, justice, and the American way’ — it’s not enough anymore,” the comic book superhero said, after both the Iranian and American governments criticized him for joining a peaceful anti-government protest in Tehran.

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.

The National Taxpayer Advocate’s Office, part of the IRS, released a report in December that details the difficulties of filing taxes from overseas. It cites heavy paperwork, a lack of online filing options and a dearth of local and foreign-language resources.

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 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.

Read Full Article →

Decline of the United States of America: The Moral, Political and Economic Causes

by Rodrigue Tremblay
Global Research
September 7, 2011

“The deterioration of every government begins with the decay of the principles on which it was founded.” Montesquieu, (Charles Louis de Secondat)  (1689-1755)

“I am convinced that I am acting as the agent of our Creator. By fighting off the Jews, I am doing the Lord’s work.” Adolf Hitler (1889-1945), German politician and future German Chancellor, Mein Kampf, chap. 2, 1925

I believe that God wants me to be president.”George W. Bush, American 43rd president, speech in Washington D.C., June 1, 2004

“This economy of ours is on a solid foundation.” George W. Bush, American 43rd president, January 4, 2008 (N.B.: the U.S. economy was about to enter into recession.)

“I believe that the Iraqi people will greet us as liberators.” Sen. John McCain, March 20, 2003

“We used to hustle over the border for health care we received in Canada. And I think now, isn’t that ironic?” Sarah Palin, American politician and former governor of Alaska, (admitting that her family used to get treatment in Canada’s single-payer health care system, despite having demonized such government-run programs as socialized medicine that will lead to death-panel-like rationing, March 6, 2010)

“The Lord says be submissive. Wives, you are to be submissive to your husbands.” Michele Bachmann, Rep. of Minnesota and 2012 Republican presidential candidate, (on the question of submitting to the authority of her husband, 2006). Rep. Bachmann is also a graduate of Oral Roberts University.

“Let the woman learn in silence with all subjection. But I suffer not a woman to teach, nor to usurp authority over the man, but to be in silence.”
The Bible (New Testament), 1 Timothy 2:11-12

Think of the American economy as a large apartment block. A century ago—even 30 years ago—it was the object of envy. But in the last generation its character has changed. The penthouses at the top keep getting larger and larger. The apartments in the middle are feeling more and more squeezed and the basement has flooded. To round it off, the elevator is no longer working. That broken elevator is what gets people down the most.” Lawrence Katz, Harvard University economist, 2010

The American economy is in the Doldrums, the American Political System is Dysfunctional and Paralyzed

Around the world, many are baffled by what’s happening to the United States. It seems that all at once the wheels are going off the cart. The American economy is in the doldrums, the American political system is dysfunctional and paralyzed, and a series of elective, far away foreign wars is ruining the country.

The U.S. economy used to be an engine of economic growth and the American political system used to be a well-oiled checks-and-balances machine that was geared toward progress and that could accommodate both leadership and compromise. Moreover, Americans can be proud that their constitution, at least on paper, is one of the best in the world, having been crafted by enlightened founders who believed in individual and democratic freedom.

In this short article, I will identify what I think to be the two major causes of America’s current decline. (I welcome comments.)

-The first cause is a moral one: it is related to the widespread corruption that permeates many institutions and sectors of the U.S. society, the most corrupt of them all being the political system and the corporate system. It is no accident that the epicenter where these two corrupt systems meet is at the Pentagon, an agency that reports upon reports picture as a cesspool of corruption.

The result of that widespread corruption is that the United States is now generating a sub-standard class of politicians to administer its affairs who are not the servants of the common good, but who rather serve happily the narrow money interests that finance them. The U.S. corporate elite, for the most part, has abandoned all loyalty to its country while it roams the world in order to make short-term profits at all costs and avoid paying taxes in its country of origin.

The result: wacky politicians and greedy business people are in charge.

The same can be said about the biased corporate media who have also abandoned all pretenses of neutrality and objectivity in informing the people and who have rather donned the mantle of unadulterated propaganda in order to cynically manipulate information and public opinion, to the delight of their money masters.

Things were never perfect in the past, but I would argue that the current level and scope of corruption in the U.S. society is unprecedented and is a root cause of the decline of the United States.

The second cause of American decline is more structural and more economic in nature. It is related to a widespread ignorance of the practical consequences of economic and financial globalization that began under the Nixon Republican administration (1969-1973) and which accelerated under the Republican administrations of Ronald Reagan (1981-1989) and of George H. Bush (1989-1993).

I shall tackle each of these causes separately.

I-  The U. S. has abandoned its Democratic Ideals and the Quality of its Politicians is Sub-Standard

Let’s talk first about the moral and political causes of American decline.

British Prime Minister Winston Churchill (1874-1965) once quipped that “democracy is the worst form of government, except for all the others.”! Indeed, democracy is a very fragile political system that can sometimes fail the very people it is designed to serve. American president Abraham Lincoln (1809-1865) defined it as “a government of the people, by the people, and for the people.”

But democracy is at its worst when an oligarchy takes control of a country’s institutions and imposes its agenda. Such is the case with today’s United States. Money interests, not the sovereign people, control the political system today; they control the corporate media system, they control the U.S. Supreme Court and much of the judicial system and, I would argue, they control a large chunk of the academic system.

The results are everywhere to be seen. The United States has reached levels of inequality in wealth and income that used to be seen only in some backyard third-world countries.

Another form of political corruption and of intellectual decay is the widespread refusal nowadays to abide by article VI of the U.S. Constitution. Indeed, article VI expressly stipulates that “no religious Test  shall ever be required as a Qualification to any Office or public Trust under the United States.” This would seem to me to be clear enough.

Some fifty years ago, in 1960, Sen. John F. Kennedy was elected president of the United States, stating that his religious beliefs were his own personal affair and that, as an elected official for all the people, he was going to use his best judgment in his public decisions, and not be obligated to follow the diktats of any established religion, not even of his own, the Roman Catholic Church, nor its foreign Pope.

As an indication of how much the United States has regressed on the question of separation of Church and State, consider that a presidential candidate of the quality of Sen. John F. Kennedy would most likely not be elected to office today with such a stand of intellectual independence. Mind you, most of the Fathers of the U.S. Constitution could not be elected either, a clear indication that the United States has strayed away from its founding principles.

Consider what President James Madison (1751-1836) had to say about religion in politics: “The number, the industry, and the morality of the priesthood, and the devotion of the people have been manifestly increased by the total separation of the Church from the State.” Do you really believe that President Madison could be elected today? Nowadays, in fact, religious zealots dominate the Republican party while some half of democrats think that a presidential candidate must have “strong religious beliefs” to be considered for public office. The only problem is that such a view is in direct conflict to what the U.S. Constitution says!

Mixing personal and official religion with democratic politics is a form of intellectual corruption. —It’s dynamite. If the United States continues in the same destructive direction that many theocratic Muslim countries have followed for centuries, with disastrous results, I would not hesitate to predict that the U. S. will self-destruct.

II- The Widespread Confusion Between What Works in an Open Economy as Compared with a Closed Economy

Let’s talk economics.

The U. S. economy, like most industrial economies, is an open economy. This means that goods and services can be exported and imported while facing a minimum of border taxes and other barriers to international trade. For a quarter of a century now, it has also meant that the U. S. economy is part of the economic globalization model. The latter goes much further than free trade: it means that corporations and banks can move their capital, technology and production plants around the world in search of the greatest profit and the best investment environment. I happen to believe that this globalization model has been pushed too far and has become a major cause of economic stagnation in the industrial economies.

When it comes to economic policies, what can work in a closed economy does not necessarily work in an open economy. Consider macroeconomic policies to stimulate a stagnant economy. In an open economy, keynesian-type stimulus policies of deficit government spending or of tax reduction do not work properly, essentially because stimulus policies of this type are the equivalent of heating a house in winter with the windows and doors wide open. The new deficit spending may help the world economy, since much of the new spending ends up abroad, but the domestic multiplier effect of such spending can be very low. This means that such an economic stimulus in an open economy may not be as effective in stimulating economic activity as hoped and, in some circumstances, it can do more harm than good.

Nevertheless, many politicians (and some economists!) cling to the old idea that lowering taxes for the rich when the government is in deficit or new non-infrastructure government deficit spending can stimulate the economy. This obviously does not work, at least not if the new deficit spending is not focused domestically. Spending deficit money in Afghanistan or in Iraq doesn’t much stimulate the U.S. economy!

What works in an open economy are policies geared toward changing relative prices in order to encourage domestic production and employment. First of all, a lowering of the real exchange rate can encourage net exports and stimulate domestic production and employment, provided the government does not sustain excessive domestic absorption through unproductive large deficits.

Another approach to skew relative prices in favor of domestic production and employment is to use the tax system accordingly. Presently, many American corporations are hardly taxed at all on their profits when they operate abroad. Some appropriate taxation of these profits can encourage repatriation of capital and support additional domestic investments. It may be argued that the American political system is not flexible enough to allow for the use of tax policies to encourage domestic production and employment. If so, this would be another indication that the current state of the political system in the U. S. is inimical to economic progress.

These are only a few examples of public policies that can have a positive impact on the functioning of the economy.

In general, and that will be my conclusion, I would say that it is in the interest of any country to avoid giving power to idiots, ignoramuses, incompetents, devious and delusional characters or to demagogues. If not, watch out. —More countries are destroyed by their own politicians than by foreign armies.

Rodrigue Tremblay is professor emeritus of economics at the University of Montreal and can be reached at rodrigue.tremblay@yahoo.com. He is the author of the book “The Code for Global Ethics” at: www.TheCodeForGlobalEthics.com/

U.S Government secretely passed gold coin tax

Amendment Slipped Into Health Care Legislation Would Track, Tax Coin and Bullion Transactions 

ABC

 Those already outraged by the president’s health care legislation now have a new bone of contention — a scarcely noticed tack-on provision to the law that puts gold coin buyers and sellers under closer government scrutiny.

 The issue is rising to the fore just as gold coin dealers are attracting attention over sales tactics.

 Section 9006 of the Patient Protection and Affordable Care Act will amend the Internal Revenue Code to expand the scope of Form 1099. Currently, 1099 forms are used to track and report the miscellaneous income associated with services rendered by independent contractors or self-employed individuals.

 Starting Jan. 1, 2012, Form 1099s will become a means of reporting to the Internal Revenue Service the purchases of all goods and services by small businesses and self-employed people that exceed $600 during a calendar year. Precious metals such as coins and bullion fall into this category and coin dealers have been among those most rankled by the change.

 This provision, intended to mine what the IRS deems a vast reservoir of uncollected income tax, was included in the health care legislation ostensibly as a way to pay for it. The tax code tweak is expected to raise $17 billion over the next 10 years, according to the Joint Committee on Taxation.

 Taking an early and vociferous role in opposing the measure is the precious metal and coin industry, according to Diane Piret, industry affairs director for the Industry Council for Tangible Assets. The ICTA, based in Severna Park, Md., is a trade association representing an estimated 5,000 coin and bullion dealers in the United States.

 “Coin dealers not only buy for their inventory from other dealers, but also with great frequency from the public,” Piret said. “Most other types of businesses will have a limited number of suppliers from which they buy their goods and products for resale.”

 So every time a member of the public sells more than $600 worth of gold to a dealer, Piret said, the transaction will have to be reported to the government by the buyer.

 Pat Heller, who owns Liberty Coin Service in Lansing, Mich., deals with around 1,000 customers every week. Many are individuals looking to protect wealth in an uncertain economy, he said, while others are dealers like him.

 With spot market prices for gold at nearly $1,200 an ounce, Heller estimates that he’ll be filling out between 10,000 and 20,000 tax forms per year after the new law takes effect.

 “I’ll have to hire two full-time people just to track all this stuff, which cuts into my profitability,” he said.

 An issue that combines gold coins, the Obama health care law and the IRS is bound to stir passions. Indeed, trading in gold coins and bars has surged since the financial crisis unfolded and Obama took office, metal dealers said.

 The buying of actual gold, as opposed to futures or options tied to the price of gold, has been a particularly popular trend among Tea Party supporters and others who are fearful of Obama’s economic policies, gold industry members such as Heller and Piret said.  

Read more details…

Greece Selling Islands to “Save Its Economy”

As any other consolidation scheme created by the bankers, the control and acquisition of Greek lands and resources is well on its way.  Greece asked for financial aid to the very bankers it was in debt with.  Now, as part of the deal, Greece is giving away its land.  How much can an undeveloped island cost in the middle of a depression these days?  Little enough for billionaires and bankers to buy it for pennies on the Euro.

Elena Moya

Desperate attempt to repay debts also driven by inability to find funds to develop infrastructure on islands

There’s little that shouts “seriously rich” as much as a little island in the sun to call your own. For Sir Richard Branson it is Neckar in the Caribbean, the billionaire Barclay brothers prefer Brecqhou in the Channel Islands, while Aristotle Onassis married Jackie Kennedy on Skorpios, his Greek hideway.

Now Greece is making it easier for the rich and famous to fulfill their dreams by preparing to sell, or offering long-term leases on, some of its 6,000 sunkissed islands in a desperate attempt to repay its mountainous debts.

The Guardian has learned that an area in Mykonos, one of Greece’s top tourist destinations, is one of the sites for sale. The area is one-third owned by the government, which is looking for a buyer willing to inject capital and develop a luxury tourism complex, according to a source close to the negotiations.

Potential investors also looking at property on the island of Rhodes, are mostly Russian and Chinese. Investors in both countries are looking for a little bit of the Mediterranean as holiday destinations for their increasingly affluent populations. Roman Abramovich, the billionaire owner of Chelsea football club, is among those understood to be interested, although a spokesman denied he was about to invest.

Greece has embarked on the desperate measures after being pushed into a €110bn (£90bn) bailout by the EU and the IMF last month, following a decade of overspending and after jittery investors raised borrowing costs to unbearable levels.

The sale of an island – or convincing a member of the international jet-set to take on a long-term lease – would help to boost its coffers. The Private Islands website lists 1,235-acre Nafsika, in the Ionian sea, on sale for €15m. But others are on for less than €2m – less than a townhouse in Mayfair or Chelsea. Some of the country’s numerous islands are tiny which could barely fit a single sunbed.

Only 227 Greek islands are populated and the decision to press ahead with potential sales has also been driven by the inability of the state to develop basic infrastructure, or police most of its islands. The hope is that the sale or long-term lease of some islands will attract investment that will generate jobs and taxable income.

Told by the Guardian that such sales or leases were in prospect, Makis Perdikaris, director of Greek Island Properties, said that he would be unhappy at the prospect of any outright sale of state land: “I am sad – selling off your islands or areas that belong to the people of Greece should be used as the last resort,” he said. But he was not necessarily against long-term leases: “The first thing is to develop the economy and attract foreign domestic investment to create the -necessary infrastructure. The point is to get money.”

In its battle to raise funds, the country is also planning to sell its rail and water companies. Chinese investors are understood to be interested in the Greek train system, as they already control some of the ports. In a deal announced earlier this month, the Greek government also agreed to export olive oil to China.

After the socialist government of prime minister Geórgios Papandreou responded to the IMF bailout with draconian budget cuts, rioters took to the streets, costing three lives in May.

In the midst of the crisis, the German chancellor, Angela Merkel, delayed her support as she faced local elections and popular opposition to any public-funded help to Greece.

As strikes almost paralysed the country and hedge funds bet against the economy, German politicians called for Greece to start selling islands, historic buildings and artworks. It now appears that the Greek government has heeded their demands.

The City, where investors are increasingly shunning Greek investments, welcomed any island sales. “It’s a shame if it has come to this but it does at least demonstrate that Greece is prepared to take all actions necessary to try and meet its obligations,” said Gary Jenkins, a credit analyst at Evolution Securities.

Property prices have fallen between 10% and 20% since the May riots in Athens, as bad publicity has drawn visitors away, Perdikaris said.

“We have experienced a very slow booking season. Most tour operators offer hugely discounted rates,” he said. Britons account for more than 60% of his company’s property sales.

• This article was amended on 25 June 2010. The original heading – Greece puts its islands up for sale to save economy – went beyond what the story said. This has been corrected. More context has been added to a quotation from Makis Perdikaris, director of Greek Island Properties, to make clear that he was not expressing knowledge of existing Greek government sales of island land.