tagged w/ Tax Shelter
Great article that will arm you with the facts!
They are the epitome of unfairness and injustice, leaving ordinary citizens to foot the bill for multinational corporations
by Paul Vallely
There is a building in the Cayman Islands that is home to 12,000 corporations. It must be a very big building. Or a very big tax scam. Tax havens are in the spotlight since the Chancellor, George Osborne, did a deal the other day with the Swiss authorities to slap a levy on secret bank accounts held there by British citizens. Opinions are divided on the move, which could net the Treasury £5bn, but which tacitly legitimizes bank accounts kept secret from the Inland Revenue. It is a de facto amnesty for those guilty of tax evasion crimes. And they will pay less than they would if they declared their income to the British taxman.
Are there any legitimate reasons why anyone would want to have a secret bank account – and pay a premium to maintain their anonymity – or move their money to one of the pink dots on the map which are the final remnants of the British empire: the Caymans, Bermuda, the Turks and Caicos and the British Virgin Islands?
The moral case against is clear enough. Tax havens epitomize unfairness, cheating and injustice. They replace the old morality embodied in the Golden Rule of reciprocity – that we should do as we would be done by – with a new version that insists that those who have the gold make the rules.
The old view, the neocon American Christopher Caldwell wrote recently, subscribes to a religious understanding of money that was universal in the Christian world before the rise of Protestantism, which acknowledges that people are alive but money is not, making it wrong for the latter to take precedence over the former – a notion as outdated as usury, he suggested tartly.
But what is the moral case for tax havens? We can dispense with the argument advanced by their administrators that if they didn't take the money it would simply move to more distant locations; that is the self-serving logic of a man who sells torture equipment to an oppressive regime. Apologists insist that tax havens protect individual liberty. They promote the accumulation of capital, fair competition between nations and better tax law elsewhere in the world. They also foster economic growth. So much so, the Institute of Directors has said, that Britain should not curb tax havens but emulate them, promoting the growth of more hedge funds in the UK.
Yet even if all that were true – and it is not – does it outweigh the ethical harm they do? The numbered bank accounts of tax havens are notoriously sanctuaries for the spoils of theft, fraud, bribery, terrorism, drug-dealing, illegal betting, money-laundering and plunder by Arab despots such as Gaddafi, Mubarak and Ben Ali, all of whom had Swiss accounts frozen.
The corruption spreads contagion, as the financial writer Nicholas Shaxson showed in Treasure Islands, his book about offshore finance which exposed secrecy, corruption and intimidation in places as seemingly innocent as that land of milk and money, such as Jersey in the Channel Islands.
But the moral bankruptcy of the tax haven runs deeper. Indeed it is intrinsic to its purpose. The British Virgin Islands is the global capital for the incorporation of offshore companies. Though it has a population of just 22,000, it has 823,502 registered companies which make vast amounts of money through the wonder of transfer pricing. It works like this. Suppose I manufacture a product in Africa and sell it in the UK. If I am a canny businessman I set up an intermediate company in a tax haven. It need do nothing except exist on paper. But through it I can buy all the products I make in Africa, dirt cheap, and then sell them, at a much higher cost, to my UK subsidiary. The African and British companies do not, thus, make much profit, so I have little or no tax to pay. All the money stays offshore, where taxes are low or non-existent. This is perfectly legal. But it distorts the world economy and means I pay no tax. I can also borrow where rates are lowest and keep my costs where they are most tax deductible.
The same tax schemes in Great Britain are the same here, for the rest of the article go to the link:Great article that will arm you with the facts!
They are the epitome of unfairness... more
"The hacker battle cry of “free” information reflects either ignorance of value and ownership, or active hostility to those concepts".
[ me ] ;
-DEATH TO PARASITES.
Uhm,....yes,....I think "actively hostile" sums it up.
from the post -
CNN reports that “whistle-blowing” Swiss banker Rudolf Elmer handed the banking information of two thousand clients over to WikiLeaks. The website says it will be able to “process” and release this information in “a matter of weeks.” Elmer is facing charges for violating Swiss banking secrecy regulations.
Elmer describes himself as an “activist/reformer/banker” who decided the Swiss banking system was “damaging our society in the way money was moved.” He’s never been able to get government authorities or universities interested in the data he pilfered from the banks, so he hit on the idea of handing it over to WikiLeaks.
Once again, we see a lone “activist” violating the property and privacy rights of many others, in the belief his wisdom transcends the judgment of those he could never convince to act upon his stolen data. I’m second to none in my criticism of hidebound government bureaucracies… but where, exactly, do the Swiss go to vote against Rudolf Elmer or WikiLeaks, if they disagree with their notions of secrecy or transparency?
Are we supposed to believe that all 2000 of the accounts Elmer gave WikiLeaks belong to evil villains conspiring to dominate the world? Don’t they “own” their banking data, and therefore have some right to decide how it would be disseminated?
LINK - - -
graphic-"The hacker battle cry of “free” information reflects either... more
The life-insurance industry has enjoyed beneficial tax treatment for its products for nearly a century. Whenever Congress tried to change that, insurers always had a mantra at the ready: We protect widows and orphans.
Life insurance needs to be free from income taxes, the industry said, because of its special social function. It keeps survivors from a life of penury when a chief breadwinner dies.
But in a development all but unnoticed outside the industry, life-insurance companies gradually have shifted away from their broad historical base of middle-class households. Instead, statistics show, an increasing portion of insurers' business consists of selling large policies to wealthier Americans, often as part of complex estate-tax plans.
The shift means that a growing proportion of the tax benefits of life insurance goes to the well-off, not to the middle class that once was the industry's backbone.
The industry's safety-net role is eroding just as Congress is scouting for new revenue sources amid gaping budget deficits, raising concern among insurance executives that lawmakers could revisit the industry's tax advantages.
High-end policies for $2 million and up, which can carry annual premiums of $20,000 or more, made up nearly 40% of the face value of new whole-life and universal-life policies sold in 2007, according to an analysis done for The Wall Street Journal by Limra, an industry-funded research group. Such large policies accounted for just 10% a decade earlier, and 1% two decades ago.
Meanwhile, the percentage of American families owning life insurance continues to fall. Thirty percent have no life-insurance coverage of any kind, a four-decade high, according to a Limra survey.
Permanent life insurance has "become a tax shelter for the rich," said Charlie Smith, a former head of an international association of insurance managers, who in 2003 to 2005 was chairman of an insurance-industry task force on flagging middle-market sales. "If the industry no longer has a significant presence on Main Street, it loses its political clout in Congress and can't defend the tax benefits."
Whole and universal life's tax benefit could become still more important to affluent families if their income-tax rates rise, as they would under Obama administration plans to restrict the extension of the Bush-era tax cuts.
Meanwhile, middle-class families have been getting a smaller portion of the overall tax benefits, in part because they tend to hold less-costly "term" insurance, which provides coverage just for a designated period and doesn't involve a tax-advantaged investment account.
According to Federal Reserve survey data, 22% of assets accumulated tax-free in whole-life and universal-life policies were held by the wealthiest 1% of U.S. families in 2007—those with more than $8.4 million in net worth. More broadly, 55% of the assets in such policies were held by the wealthiest 10% of families. The bottom half by net worth held 6.5% of these assets.
Some of the largest life insurers, seeing the trend, are concerned about a failure to meet what some consider the industry's social mission to ensure that families have life coverage.
Prudential Financial Inc., which historically has focused on the middle class, says 31% of its new-policy sales in 2009 were to its most affluent slice of customers, households with investable assets over $250,000. That puts them in roughly the top 15% of U.S. households measured by financial holdings, according to Fed figures. A decade earlier, 19% of its policies in force were in that high-end segment.
"If all we do as an insurance industry is focus on the affluent, then I think we can lose sight of the original tenets of life insurance," said Mark Hug, a Prudential executive.
There is more at the website....The life-insurance industry has enjoyed beneficial tax treatment for its products for... more
The joke goes, The economy is so bad Exxon Mobil laid off 25 Congressmen. If only.
Turns out the economy is never really bad for the oil giant, and the last thing they would want to do is cut off support to members of Congress who allow them to pull off the remarkable trick of making $45 billion in profits last year but paying no federal income tax. Think Progress reports the stunning news, which, sadly, is not a Steve Martin routine:
Last week, Forbes magazine published what the top U.S. corporations paid in taxes last year. “Most egregious,” Forbes notes, is General Electric, which “generated $10.3 billion in pretax income, but ended up owing nothing to Uncle Sam. In fact, it recorded a tax benefit of $1.1 billion.” Big Oil giant Exxon Mobil, which last year reported a record $45.2 billion profit, paid the most taxes of any corporation, but none of it went to the IRS:
Exxon tries to limit the tax pain with the help of 20 wholly owned subsidiaries domiciled in the Bahamas, Bermuda and the Cayman Islands that (legally) shelter the cash flow from operations in the likes of Angola, Azerbaijan and Abu Dhabi. No wonder that of $15 billion in income taxes last year, Exxon paid none of it to Uncle Sam, and has tens of billions in earnings permanently reinvested overseas.
Mother Jones’ Adam Weinstein notes that, despite benefiting from corporate welfare in the U.S., Exxon complains about paying high taxes, claiming that it threatens energy innovation research. Pat Garofalo at the Wonk Room notes that big corporations’ tax shelter practices similar to Exxon’s shift a $100 billion annual tax burden onto U.S. taxpayers. In fact, in 2008, the Government Accountability Office found that “two out of every three United States corporations paid no federal income taxes from 1998 through 2005.”The joke goes, The economy is so bad Exxon Mobil laid off 25 Congressmen. If only.... more
The BLM is rounding up wild horses for their protection....Is this true? Or is big Oil removing the Majestic animals to remove protections imposed on the land they want to drill on.
With the advent of laws that allow horizontal drilling, and the unnecessary removal of protected species, the almost obsolete industry of fossil fuels is once again flexing its muscles to rob the american citizen its indigenous people and its current inhabitants (man and beast) of the right to be left alone.Madeleine Pickens, wife of Oil BILLIONARE make a bold proposition to purchase 1million acres...The wild horses reside on MillionsThe BLM is rounding up wild horses for their protection....Is this true? Or is big Oil... more
Offshore tax shelter? Check. Income hidden from tax authorities? Check. New IRS unit specifically set up to target taxpayers with tens of millions or dollars? Check.
IRS Commissioner Doug Shulman told the American Institute of Certified Public Accountants Monday that the agency has set up a unit specifically set up to deal with rich Americans who are hiding assets.
"We will take a unified look at the entire web of business entities controlled by a high-wealth individual," Shulman said. "At least initially, we will be looking at individuals with tens of millions of dollars of assets or income."Offshore tax shelter? Check. Income hidden from tax authorities? Check. New IRS unit... more
The United States has reached an outline settlement with Switzerland's most powerful bank, UBS, on their long running $20bn (£12bn) tax evasion dispute that has severely damaged relations between the two countries.
It is thought that UBS will be ordered to hand over to US investigators about 5,000 American accounts suspected of tax evasion. Originally the US demanded 52,000 accounts from UBS in a move that forced the Swiss government to intervene.
If Switzerland does hand over accounts, it will in effect end any pretence of Swiss bank secrecy and may prompt an increase in cash withdrawals as the super-rich rush to protect their identities.
The case dates back two years when US tax investigators arrested Florida real estate tycoon Igor Olenicoff for tax evasion. Olenicoff accepted an offer of a reduced sentence in return for information about who organised the tax fraud.
His evidence established that UBS personnel devised sham companies to hide wealth and even smuggled diamonds in toothpaste tubes through customs.
In February, UBS paid $780m to settle criminal charges that it helped wealthy Americans evade taxes on nearly $20bn in offshore accounts. One day later, it filed the civil suit seeking to force UBS to disclose 52,000 client names.
There is no guarantee that an outline agreement will lead to a settlement, however. On Friday US secretary of state Hillary Clinton will meet Swiss foreign minister, Micheline Calmy-Rey.
Andreas Missbach of the Berne Declaration, a Swiss economic justice campaigner, said the increasing involvement of the Swiss foreign ministry in the dispute was a sign that the country's more confrontational ministry of finance had failed to head off the row.
Switzerland has also attracted co-ordinated international action for its role as a tax haven and has pointedly not been invited to participate in G20 meetings to restore the world's economy. UBS, is not commenting on the case.The United States has reached an outline settlement with Switzerland's most... more