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THE SOVEREIGN SOCIETY OFFSHORE A-LETTER
Your Link to Freedom, Privacy & Prosperity in the Offshore World
Tuesday, August 5, 2003 - Vol. 5 No. 92
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In This Issue:
* COMMENT: U.S. Expats Tax Target
* OFFSHORE: Brit Tax Collectors Greed. No to EU Tax Control.
Expat Banking. Commons Backs Gibraltar. Swiss Secrecy Backed;
Financial Crimes Costly. Hong Kong Bounces Back; Tang Is In;
Democracy Grows. Shanghai for Sale. Singapore Expats.
Nauru Takes Heat. South Africa Banks, Amnesty, Apartheid.
* WEALTH: IRS Amnesty a Success? Offshore Gambling Forfeiture.
IRS Attacks Deferred Taxes. Global Fraud. Everbank.
Economic News: US, Europe, Argentina, France, Japan.
* PRIVACY & RIGHTS: Dangerous Extradition Treaty. UK ID Killed.
EU Constitution Curbs Economy. No Fly Lists Grow. Poindexter Out.
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COMMENT: U.S. Expats Tax Target
Dear A-Letter Reader:
Without much fanfare, on July 25, legislation (HR 2896) was introduced in the US House of Representatives by Rep. William M. Thomas (R-CA),powerful chairman of the tax-writing Committee on Ways and Means.
Overall, the bill is aimed at removing and revamping certain so-called "tax benefits" long available to US corporations that do business offshore. These traditional US tax breaks were ruled to be subsidies by the World Trade Organization (WTO), followed with a threat from the European Union of multi-trillion dollar trade sanctions.
The thrust of the Thomas proposal is to end the offshore tax breaks, but replace them with domestic incentives and tax cuts for small business.In cutting corporate taxes, the bill recognizes that US business taxes are the second highest in the world, just behind Japan.
But tucked away in the bill is an ominous Sec. 2005, entitled "Revision of Tax Rules on Expatriation of Individuals."
This section in effect continues the punitive attack on US citizens and long-time US resident aliens first launched under Pres. Clinton in 1994.That demagogic crusade has continued since, aimed at US persons who seek to reduce income taxes by relinquishing their US citizenship after obtaining a second citizenship elsewhere.
A detailed explanation of the Thomas bill can be found in the LINKS below, (as well as a history of this continuing political hot potato).
It's enough to restate that the US Constitution guarantees rights to end US citizenship, to live and travel abroad freely, to acquire dual citizenship from other nations. Every one of these rights have been affirmed by US Supreme Court decisions.
The repeated attacks by media-courting politicians notwithstanding,the real issue here is exorbitant taxation, confiscatory rates that drive away those wealthy Americans who pay most of the taxes, do the investing, and create needed jobs.
Instead of expat tax punishments, Congress should adopt real tax reform and stop playing for headlines at the expenses of those who pay most of the taxes -- because they'll leave and pay no more.
That's the way that it looks from here.
Bob Bauman, Editor
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COMMENT LINKS:
* Thomas seeks reform of international tax rules. LINK:
http://www.sunspot.net/business/bal-bz.corptax26jul26,0,2813497.story
* Text of Rep. Thomas bill; go to web site and enter "HR 2896"
LINK: http://thomas.loc.gov/
* US Congress Review of Tax Treatment Of Relinquishment
of Citizenship And Termination Of Long-Term Residency.
LINK (pdf download): http://www.house.gov/jct/s-2-03.pdf
* Official lists of former US citizens who relinquished citizenship.
LINK: http://www.frissell.com/taxpat/taxpats.html
* Assaults Drive More Wealth Offshore. John Gaver.
LINK: http://www.actionamerica.org/terror/hideflag.html
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* OFFSHORE *
U.K. TAX COLLECTORS GREED MAY HURT BRITISH BADLY
LONDON: Plan to end non-domiciled foreigners tax breaks could kill thousands of jobs, cut £5 bn - £10 bn off Britain's GDP. LINK:
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2003/08/03/ccdoms03.xml&sSheet=/money/2003/08/03/ixcoms.html
* UK will not surrender tax control to European Union.
LINK: http://www.tax-news.com/asp/story/story.asp?storyname=12850
* UK private equity breathes again; proposed harsh tax dropped. LINK:
http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1059478679221
* Offshore UK expats face banking, savings difficulties. LINK:
http://www.telegraph.co.uk/global/main.jhtml?xml=/global/2003/08/04/fibuisoc204.xml&sSheet=/global/2003/08/04/home.html
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U.K. HOUSE OF COMMONS AFFIRMS GIBRALTAR STATUS
LONDON: MPs reject joint SPANISH-U.K. sovereignty deal for Gibraltar.
LINKS: http://www.tax-news.com/asp/story/story.asp?storyname=12847
http://www.telegraph.co.uk/news/main.jhtml?xml=/news/2003/08/01/wgib01.xml&sSheet=/portal/2003/08/01/ixportal.html
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SWISS NATIONAL POLL SUPPORTS BANK SECRECY
BERN: 58% support continued financial secrecy laws. LINK:
http://www.news24.com/News24/Finance/Economy/0,,2-8-25_1384050,00.html
* Economic crime costs Switzerland dearly; $4 billion each year. LINK:
http://www.swissinfo.org/sen/Swissinfo.html?siteSect=111&sid=4093421
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HONG KONG IS BOUNCING BACK
* A new sense of optimism is abroad in this major Asian offshore center.
LINK: http://search.ft.com/search/article.html?id=030804000368
* New financial boss named in HK, Henry Tang.
LINKS: http://news.bbc.co.uk/2/hi/business/3122299.stm
http://reuters.com/newsArticle.jhtml?type=worldNews&storyID=3213779
* Momentum gaining for Hong Kong's democratization. LINK:
http://www.heritage.org/Research/AsiaandthePacific/wm318.cfm
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* Booming SHANGHAI open for business - and graft.
LINK: http://www.sunspot.net/bal-te.shanghai04aug04,0,7720339.story
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* SINGAPORE: 800,000 expat workers under employment pressures.
LINK: http://www.dailyexpress.com.my/news.cfm?NewsID=20724
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TINY NAURU FEELS THE HEAT FROM U.S.A.
Offshore banking and passports out; clean money in. LINK:
http://www.nzherald.co.nz/storydisplay.cfm?storyID=3515973&thesection=news&thesubsection=world
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REPUBLIC of SOUTH AFRICA:
* New anti-money laundering laws curb new bank accounts 50%. LINK:
http://www.businessreport.co.za/index.php?fSectionId=561&fArticleId=200769
* To repatriate or not repatriate; that is the question. LINK:
http://www.persfin.co.za/index.php?fSectionId=590&fArticleId=200740
* South African government says dismiss apartheid lawsuits. LINK:
http://www.swisspolitics.org/en/news/index.php?page=story_inhalt&story_id=4083310
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* WEALTH *
I.R.S. OFFSHORE AMNESTY NOW CALLED SUCCESSFUL
U.S. Senators retract criticism of IRS; mistaken numbers.
LINKS: http://www.tax-news.com/asp/story/story.asp?storyname=12846
http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1059478635990
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U.S. PROSECUTORS HIT OFFSHORE GAMBLING OPERATORS
Prosecutors want to forfeit assets of accused offshore gamblers.
LINK: http://www.post-gazette.com/localnews/20030802forfeit0802p8.asp
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I.R.S. CLAMPS DOWN ON INSURANCE WRAPPERS, ANNUITIES
Limits on investor's deferral of taxes on offshore investments.
LINKS: http://www.tax-news.com/asp/story/story.asp?storyname=12829
* Malpractice lawsuits drive US professionals offshore. LINK:
http://www.ctnow.com/news/custom/newsat3/hc-hospinsure.artaug02,0,587893.story?coll=hc-headlines-newsat3
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GLOBAL, SWISS FRAUD CASES GROWING
Fraud cases surge amid global recession; 37% of businesses hit. LINK:
http://www.swissinfo.org/sen/swissinfo.html?siteSect=105&sid=4017553
* US insurers lead fight against fraud as police allies. LINK:
http://www.delawareonline.com/newsjournal/business/2003/08/03insurersleadfig.html
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GLOBAL INTERNET BANKING
Everbank's offerings cross all borders.
LINK: http://www.bayarea.com/mld/cctimes/business/6453573.htm
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AMERICA & EUROPE; OCEANS APART
* U.S. on the rebound; Europe lags behind. LINK:
http://www.economist.com/agenda/displayStory.cfm?story_id=1971048
* FRANCE a basket case; government accounts for 53.4% of GDP. LINK:
http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1059478671629
* ARGENTINA didn't fall on its own; Wall Street pushed debt. LINK:
http://www.washingtonpost.com/wp-dyn/articles/A15438-2003Aug2.html
* JAPANESE depositors scramble amid rumors of bank account freeze.
LINK: http://www.japantoday.com/e/?content=kuchikomi&id=260
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* PRIVACY & RIGHTS *
DANGEROUS NEW U.K.-U.S. EXTRADITION TREATY
Pact removes or restricts key protections for accused defendants.
LINK: http://www.statewatch.org/news/2003/jul/25ukus.htm
* U.K. Financial Services Authority wants power to arrest. LINK:
http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1059478637145
* P.M. Tony Blair shoots down U.K. ID card scheme.
LINK: http://www.theregister.co.uk/content/6/32106.html
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E.U. CONSTITUTION MAY STRANGLE ECONOMY
BRUSSELS: EU reforms to curb economic flexibility. LINK:
http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1059478671107
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U.S. NO-FLY LISTS EXPANDING
Will you be allowed on an airplane after this background check? LINKS:
http://www.sfgate.com/cgi-bin/article.cgi?file=/news/archive/2003/07/30/national1624EDT0669.DTL
http://www.washingtonpost.com/wp-dyn/articles/A4978-2003Jul30.html
* TSA admits antiwar activists on special "no-fly" list. LINK:
http://news.independent.co.uk/world/americas/story.jsp?story=430073
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* U.S. Suspends No-Visa Air Travel Pass-thru Programs. LINK:
http://www.washingtonpost.com/wp-dyn/articles/A15400-2003Aug2.html
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* Adm. Poindexter to leave Pentagon research job. (About time!) LINK:
http://www.washingtonpost.com/wp-dyn/articles/A10810-2003Jul31.html
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THE SOVEREIGN SOCIETY OFFSHORE A-LETTER. *
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