On the one hand, I have long favored flat taxation (ideally in the form of a national sales tax, as this taxes consumption rather than production and allows for easy adjustment by type of consumption, such as MN sales tax not applying to clothing or unprepared food) with no write-offs, no tax shelters, and no other way for the wealthy or well-connected to cloak their otherwise-taxable transactions. So I'm definitely no fan of allowing tax evasion through the use of offshore havens.
On the other hand, this needs to be addressed in a manner which is less onerous to 'middle-class' Americans who happen to have significant assets or conduct business outside the US:
As an expatriate American, I owe income tax to the IRS just as if I were still living in the US, even if I have no actual connection to the country aside from carrying its passport. If I were to decide that this pissed me off enough that I chose to forfeit my US citizenship because of it, I would remain liable for these taxes as a non-resident, non-citizen for another five years. (Fortunately, the US has tax treaties which allow most other nations' income taxes to be applied as credits against US income taxes. Since I live in Sweden, where the tax rate is higher, this leaves me owing $0 in US income taxes, but I still have to file each year and, if that policy should ever change, I may find myself required to pay over 100% of my income in taxes.)
Due to the requirements for tracking funds internationally, both to guard against tax evasion and against money laundering, if you were to pay me $5, I would technically be required, as an expatriate US citizen, to get your social security number from you. While I doubt it would ever be enforced on that level, this makes it noticeably more difficult for me to conduct business as a freelancer than it was when I lived in the US.
Because the relevant laws are all aimed at catching the wealthy and ensuring that they feel it, if I were to get caught failing to correctly account for that $5, I would face a statutory minimum fine of 100,000 Euro (or was it 1,000,000?), or about $130,000, which must be paid in full within 30 days. Never mind that I've never made more than about half that amount within a year.
I'm all for shutting down tax havens and making tax evaders pay up, but can we at least try to avoid trampling the little guys who aren't doing anything wrong in the process, just because they happen to live somewhere else?
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branchandroot
(no subject)
Date: 2009-04-16 06:30 pm (UTC)(no subject)
Date: 2009-04-16 08:33 pm (UTC)(no subject)
Date: 2009-04-16 10:15 pm (UTC)(no subject)
Date: 2009-04-16 11:50 pm (UTC)(no subject)
Date: 2009-04-17 12:54 pm (UTC)On the one hand, I have long favored flat taxation (ideally in the form of a national sales tax, as this taxes consumption rather than production and allows for easy adjustment by type of consumption, such as MN sales tax not applying to clothing or unprepared food) with no write-offs, no tax shelters, and no other way for the wealthy or well-connected to cloak their otherwise-taxable transactions. So I'm definitely no fan of allowing tax evasion through the use of offshore havens.
On the other hand, this needs to be addressed in a manner which is less onerous to 'middle-class' Americans who happen to have significant assets or conduct business outside the US:
I'm all for shutting down tax havens and making tax evaders pay up, but can we at least try to avoid trampling the little guys who aren't doing anything wrong in the process, just because they happen to live somewhere else?