Obama Plans U.S. Financial Prison

November 18, 2008

The day after the national elections on November 6th, The Economist magazine commented editorially: "Should President Obama give in to some of the wilder partisans in Congress, it is easy to imagine an ugly time ahead — and not just for the Democrats in the 2010 mid-term elections. America could fatally lapse into protectionism, or re-regulate business and finance to the point at which innovation is stifled, or 'spread the wealth' (to quote the next president) to the extent that capital is prudently shifted overseas."

Well, the president-elect himself rightfully can be said to be among the "wilder" when it comes to offshore tax havens. One class of wealth Obama definitely does not want to spread around, (at least not offshore), is the private capital belonging to, until now, Americans free to invest and do business abroad as they pleased. He wants to keep it where he can tax it.

As we have been warning for the past year, president-elect Barack Obama is about to fulfill his campaign promise; he is reported ready to crack down brutally on international tax havens as soon as he assumes office on January 20, 2009.

He Told You So

As we often have reported ( see October 24, 2008, Obama Says: "Shut Down" All Tax Havens) the junior senator from Illinois was one of a few co-sponsors of the "Stop Tax Haven Abuse Act" legislation introduced in 2007 which seeks to severely restrict presently legal transactions by Americans with over 40 alleged "tax haven" jurisdictions the bill blacklists because of their low taxes and financial privacy laws.

He and his transition aides equate low taxes and privacy with rampant tax evasion — for which their only proof is their own leftist opinions.

The radically left Tax Justice Network is cheering Obama on, reminding the world that one of the projects which has Obama's backing is his plan to pass legislation against tax havens and tax shelter abuses.

"This is a basic issue of fairness and integrity," Obama said, as co-sponsor, when the bill was introduced. Ignoring the fact that there are more than enough laws on the books now, he piously intoned: "We need to crack down on individuals and businesses that abuse our tax laws so that those who work hard and play by the rules aren???t disadvantaged."

Alleged $50 Billion Missing!

According to media reports, aides to Obama say he will have introduced similar anti-tax haven measures within weeks of taking power in a bid to capture what his aides claim is an estimated US$50 billion in supposedly lost U.S. annual tax revenue.

The public relations excuse for this major disruption of past free capital flow and trade policies will be its inclusion in a wide-ranging revenue-raising and tax "reform" package.

After all, the argument will go, who can oppose grabbing an alleged $50 billion from tax evaders when the U.S. budget and economy are in such terrible shape? Just as Bush used the 9-11 terror attacks as false justification for the unconstitutional PATRIOT Act, Obama will use the domestic and world financial crisis as cover for this socialistic currency control scheme.

Radical Plans

Key provisions in this radical plan are said to include full disclosure on ownership of trusts that are now private, restrictions on fees for specified offshore tax services by U.S. professionals and "tighter surveillance," (whatever that means), of offshore jurisdictions which refuse to kowtow to IRS demands for accessing offshore tax information. Washington sources say leading accountancy and legal professionals, expecting a fierce battle to improve the worst of these proposals, have already hired lobbyists.

This all fits in with growing international pressure to outlaw tax havens as a part of "reforms" to the world's faltering financial system. The leaders of the world's 20 most powerful economies, many of them socialist big taxers, gather for a major conference in Washington next weekend. Look for the meeting's agenda to include an attack on tax havens and an endorsement in principle of Obama's anti-haven plans.

Two Tax Radicals Lead the Way

The two prime members of the Obama transition team leaking all these glorious plans include: 1) Joseph H. Guttentag, former chairman of the OECD Committee on Fiscal Affairs who twice served in the U.S. Treasury Department, most recently as Deputy Assistant Secretary for International Tax Affairs under President Bill Clinton;

2) Professor Reuven Avi-Yonah, who helped draft Obama's anti-tax haven legislation. He is professor of law and director of the International Tax Master of Law Program at the University of Michigan Law School and holds a JD (magna cum laude) from Harvard Law School and a PhD in History from Harvard University.

The professor blithely told The Observer (UK): "It is expected that something like this will happen. There is a sense that if you can raise revenue by doing this, it will not be controversial."

That's what he thinks! But then again, a radically left Congress probably will go along with this without even considering the abrogation of freedom it entails.

Far Out Professor

Professor Avi-Yonah apparently invented (or endorsed) the mythical $50 billion annual tax loss in 2006 Senate committee testimony that reads like a wish list of the radical left when it comes to destruction of tax havens and American financial freedoms. You can read it here and weep.

In his own words he advocates, among other monstrosities, "refusing to allow deductions for payments to designated non-cooperating tax havens or restricting the ability of financial institutions to provide services with respect to tax haven operations."

Currency controls here we come!

Indeed the professor equates alleged tax evasion with terrorism, to wit: "These types of [offshore] transfers are also used by terrorists and it would be advisable to use the well developed expertise of the IRS to combat both tax evasion and terrorist financing activities."

Act Now: Time Is Running Out

So friends and neighbors, you have about 60 days before the hammer of federal tyranny falls. Better get your financial house in order and move quickly. The Soveregn Society can help, and you can become a member by clicking here.

* While you can there still are many legal ways to bank and save taxes offshore; I tell you Where To Stash Your Cash: Click Here. And if you're interested in Switzerland, Click here for Swiss Money Secrets.

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