=====================================
THE SOVEREIGN SOCIETY OFFSHORE A-LETTER
Your Link to Freedom, Privacy & Prosperity in the Offshore World
Tuesday, October 4, 2005 - Vol. 7 No. 200
=====================================
In This Issue:
* COMMENT: U.S. Needs Territorial Taxes.
* OFFSHORE: Australian Swiss Tax Surprise. Little Known Dominica.
* WEALTH: Cash Flows West to East. Bankruptcy Rush. Big Banks Bust?
* PRIVACY & RIGHTS: No to Bush Military Plan. Green Card Sex Trade.
=====================================
ADVERTISEMENT: Even though the White House says oil prices are headed down, they've made hush-hush plans to increase the Strategic Petroleum Reserve by 42% to ONE BILLION barrels of crude. If they think oil prices are going down, why are they so eager to add to the SPR when oil prices are high?
The ugly fact is there's only enough oil in the Strategic Petroleum Reserve to cover 70 days' worth of imports. And it's not enough! Every day, more forces fall into place that will push oil to $80, $100, and beyond. Start investing for the energy emergency now with a portfolio that can weather the gathering storm - 10 energy companies that will ride the coming surge in oil prices. You'll want to add them to your portfolio immediately - here's how:
LINK: http://www.agora-inc.com/reports/190SENGY/W190FA05/
=====================================
COMMENT: U.S. Needs Territorial Taxes.
Dear A-Letter Reader:
The United States is one of the few nations that doesn't have a tax system that is "territorial" -- that is, a system that only imposes taxes on economic activity within its own borders. That means that a US citizen or resident alien (a "green card" holder) is taxed on all income, no matter where in the world it is earned and no matter where in the world that person actually lives. The same goes for US corporations that are taxed at a rate of 35% on all income.
Many nations, such as the United Kingdom and Canada, release their citizens from paying most taxes when they move their residence to another country. Some nations, such as Panama, do not even tax individuals or companies located there on income earned outside that country.
The harsh reality of American territorial taxes has pushed many US companies to reorganize their corporate operations so that large portions of their income are derived from sources outside the US and outside US taxes. US law permits this and corporate managers would be foolish not to cut their costs (and increase their dividends) by taking advantage of this fully legal tax avoidance.
This legal tax reduction process requires the US corporation either to create offshore subsidiaries, or move their corporate presence to a tax haven such as Bermuda, the Cayman Islands or Panama. In those places, few or no corporate taxes are imposed. So why not pay no corporate taxes, instead of 35%US taxes?
Comes now a left-wing member of the US Congress who wants to abolish the right of "un-American" US corporations to go offshore and save on taxes. Rep. Richard E. Neal, (D. Mass). Neal echoes the hypocritical US Senator John Kerry who castigated "Benedict Arnold" companies who move offshore, while he and his wife both had offshore trusts and investments in such companies.
Andrew Quinlan of the Center for Freedom and Prosperity makes these points: 1) US chartered companies should have the right to escape the US anti-competitive worldwide tax system by re-domiciling in low tax jurisdictions; 2) an expatriating company does not reduce its taxes on US profits; 3) expatriation protects US jobs by allowing these companies to compete on a level playing field against their international rivals; and 4) allowing companies to choose where they charter promotes economic liberalization. This encourages all nations to improve their laws, leading to lower costs and efficiency.
Many US companies choose Bermuda because of its strong legal system and zero taxes. The Cayman Islands has attracted many companies for the same reasons. A company that moves to one of these jurisdictions no longer has to pay US tax on its overseas income. This enables a company, which still maintains substantial US operations and must pay US taxes on all income earned in America, to compete with foreign competitors.
The sooner the US reforms its tax laws and adopts a territorial approach to taxation, the sooner fairness will become a part of American tax law.
It's not now.
That's the way it looks from here.
BOB BAUMAN, Editor
=====================================
COMMENT LINKS:
* Fighting Fiscal Protectionism, Helping Companies Compete. LINK:
http://www.freedomandprosperity.org/memos/m05-01-02/m05-01-02.shtml
* Corporate expatriation protects American jobs.
LINK: http://www.heritage.org/Research/Taxes/em829.cfm
* US Rep. Neal files bill to restrict US firms. LINK:
http://www.theroyalgazette.com/apps/pbcs.dll/article?AID=/20050930/BUSINESS/109300126
=====================================
* FROM THE EDITOR'S DESK:
OFFSHORE:
* AUSTRALIAN TAX COLLECTORS SWISS SURPRISE
GENEVA: We previously have mentioned the witch hunt being conducted by the Australian Taxation Office and Australian Crime Commission aimed at a Geneva based firm. Foreign "tax fraud" is a crime in Switzerland, but tax evasion by foreign account holders is not. In any case, individual cases must be handled separately in a judicial system that allows notice and a chance to defend. There are no wholesale permissions for another nation's tax collectors to look at 500 persons' Swiss accounts en mass.You can be certain the Swiss are not going to jeopardize their standing with the world's investors by turning over records on this basis in violation of their traditional bank secrecy laws.
* Swiss banks fight for secrecy. LINK: http://www.theaustralian.news.com.au/common/story_page/0,5744,16794515%255E2702,00.html
* The IRS take on Swiss tax inquiries; not very likely.
LINK (scroll down): http://www.irs.gov/irm/part9/ch13s02.html
-----
* SECOND CITIZENSHIP IN 90 DAYS
ROUSSEAU, Dominica: Not only is it a tourist mecca, but one of the only two nations in the world that offers instant economic citizenship. Here you might be able to get a second passport in 90 days.
* The Caribbean's Best Kept Secret For Expatriates. LINK: http://www.escapeartist.com/efam/74/Information_On_Dominica.html
* The Dominica Citizenship Program.
LINK: http://www.henleyglobal.com/dominica0.htm
* Learn more about dual citizenship & second passports.
Click here for the latest edition of 'The Passport Book'
LINK: http://www.agora-inc.com/reports/190SGOPS/W190FA03/
-----
* PANAMA FIRST IN GLOBALIZATION
Thanks to its high degree of trade, Panama captured the top slot in the First annual Latin American Globalization Index.
* Panama leads 2005 Latin American Globalization Index. LINK:
http://www.latinbusinesschronicle.com/reports/reports/lagi100305.htm
* We tell you all about Panama business in "Panama Money Secrets."
https://www.isecureonline.com/secure/FORM1.CFM?PUBCODE=190SPMON&PCODE=E190GB22&ALIAS=99
====================================
WEALTH:
* HUGE EU CASH FLOW WEST TO EASY
Foreign investment in Central and Eastern Europe jumped by 70% in 2004, with cash flowing to 10 new low tax EU nations form the high tax west.In the west, direct investment dropped 40%.
* Money flowing out of Old Europe and into lower tax New Europe.
LINK: http://euobserver.com/?aid=19983&rk=1
-----
* How EU offshore expats can avoid the perils of the EU tax directive.
LINK: http://www.bangkokpost.com/Yourmoney/03Oct2005_money10.php
----
* Debt ridden Americans rushing to file before Oct. 17 deadline. LINK:
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2005/10/02/PENDER.TMP
-----
* BIGGER THEY ARE, HARDER THEY FALL
The A-Letter last week exposed the shaky posture of too many American banks (9/26 & 9/28). Now we hear of more mergers. Just wait until the
real estate boom goes bust.
* Big banks to get bigger?
LINK: http://www.washtimes.com/business/20051002-093344-3306r.htm
====================================
PRIVACY & RIGHTS:
* U.S. GOVERNORS SAY NO TO PUSH MILITARY
WASHINGTON: There's almost no support among the nation's governors for President Bush's suggestion that the Pentagon could take the lead in responding to catastrophic natural disasters
* Governors to Pres. Bush: No Need for Military. LINK:
http://www.usatoday.com/news/washington/2005-10-02-gov-survey_x.htm
-----
* U.S. IMMIGRATION AGENCY A MESS
The agency charged with admitting immigrants to the US is in disarray, with employees facing thousands of charges of misconduct, including bribery and trading sex for green cards.
* U.S. probes 'green cards for sex' LINK:
http://www.washtimes.com/national/20051003-122319-3501r.htm
====================================
ADVERTISEMENT: HOW TO LEGALLY OBTAIN A SECOND PASSPORT
AND LIVE THE LIFE OF YOUR DREAMS
Own a 16th century farmhouse in the French countryside...a villa along the Spanish or Italian Riviera...an oak beamed cottage on a secluded mountain range in the center of Europe...Countries all over the world are filled with extraordinary possibilities- most of which are never even explored, considered or carried out by the average individual.
Find out more about what a second passport can do for you, click here:
LINK: http://www.agora-inc.com/reports/190SGOPS/W190FA03/
=====================================
THE SOVEREIGN SOCIETY OFFSHORE A-LETTER.
* Bob Bauman, Editor * Daniel Aponte, Jr. Editorial Asst.
SUBSCRIBE to The A-Letter FREE or send to a friend at
LINK: http://www.sovereignsociety.com/
Please DO NOT respond directly to THE A-LETTER.
Send E-mail to: INFO@THESOVEREIGNSOCIETY.COM
====================================
* The A-Letter provides accurate information on the subject matter covered and advertisements displayed, so far as we can ascertain. We cannot certify the absolute accuracy of referenced articles nor do we necessarily endorse products advertised herein. The Sovereign Society advocates full compliance with all applicable tax and financial reporting laws. All LINKS are operative at time of publication.
* Nothing herein should be considered personalized investment advice Although our employees may answer general customer service questions, they are not licensed under securities laws to address your particular investment situation.
* LEGAL NOTICE: This document is based on SEC filings, current events, interviews, press releases and knowledge gained as financial journalists and may contain errors. Investment decisions should not be based solely on this document. The Sovereign Society expressly forbids its writers from having financial interests in securities they recommend to readers. Sovereign Society, its affiliated entities, employees and agents must wait 24 hours after an initial trade recommendation published on the Internet, or 72 hours after a direct mail publication is sent, before acting on that recommendation.
====================================
THE SOVEREIGN SOCIETY Ltd., 5 Catherine St., Waterford, Ireland
TEL: 353-51 844 068 FAX: 353-51 304 561
All contents COPYRIGHT (C) 2005 by Sovereign Society Ltd. All rights
reserved. Reproduction of all or part of this document in any form is
prohibited without express written consent of Sovereign Society.
Protected by US copyright laws 17 USC 101 et seq., 18 USC 2319;
violations punishable by 5 years imprisonment and/or $250,000 in fines.
====================================