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LOW COST AIRLINES SERVICE ACCESS INCREASES PROPERTY VALUES, SAYS SURVEY
New Web service aims to provide unbiased financial analysis of overseas investment opportunities.
A survey carried out by Savills Research with Holiday-Rentals.co.uk has shown a price and rental premium for properties located near airports served by low cost airlines. This was one of the key findings of the survey which questioned over 12,000 owners of overseas property who use Holiday-Rentals.co.uk to advertise their properties.
Analysis of the sample of properties included in the survey showed that the average price of a property located within 10 miles of an airport served by a low cost airline is 39% higher than for similar properties within the same distance to an airport without a low cost airline carrier. The research showed that the impact of low cost airlines on property prices reduced as the distance from an airport increased – there was only a 2% difference in the average price of properties situated over 80 miles from an airport. The survey revealed that properties served by low cost airlines had higher average rents than those without low cost airlines. The difference in average rent was as much as 30% for properties within 10-20 miles of airports.
The rental potential of holiday properties was one of the most important factors owners considered when buying foreign property, which highlights the fact that many are looking to rental income to help cover the costs of the investment. Ross McGowan, sales director, www.Holiday-Rentals.co.uk comments. “Marketing a holiday property on the Internet is the most efficient way to reach a large number of potential renters. It also eliminates the need to employ a property management company that will take up to 30 per cent or more of profits through commission, charges and fees.”
In terms of the factors influencing price growth, well over half of respondents recognized that new emerging holiday destinations, characterized by a growing number of flights and low cost airlines, offered the greatest opportunity for price growth. Said Jacqui Daly of Savills, “Interestingly the established medium distance destinations such as Cyprus and the Canary Islands, where the flight time is about 4 hours, reflect the greatest premium in terms of capital value because of the availability of low cost flights.”
Another UK web-site launched a new service this week tailored to the needs of the individual overseas property investors. Invest2Gain.co.uk aims to ensure that potential investors make the most informed choices on where to put their money to get the best return – by providing professional and unbiased financial analysis of investment opportunities overseas. Managing Director Terry Pentland explained, “Based on personal experience, many of the expensive brochures issued by developers (and there are a lot of them) paint a very rosy picture and this is not surprising. However, a more detailed analysis can strip the gloss from some of these ‘opportunities.’ Investments that look attractive at the outset, can produce some very nasty surprises further down the line! ... We provide a level of detail not only on the entry costs, but more importantly, the EXIT costs. Unless an investor is able to assess the whole picture in detail, their hopes of an early retirement may be dashed!!”Link here.
BEARER SHARES ARE ALIVE AND WELL AND LIVING IN SEVERAL COUNTRIES
The OECD just hates bearer shares! They have gone out of their way to brand any country that allows bearer shares as “uncooperative”. But they have a problem. In the words of the comic strip character Pogo, “we have met the enemy and they is us!” Switzerland is an OECD member and many major Swiss corporations still issue bearer shares, and such shares are regularly traded. Another well-known OECD member nation is the United States, one of which, Nevada, allows bearer share corporations. There are some other less known jurisdictions that have still retained bearer shares as well. These include the Marshall Islands, Uruguay, and several other Latin American countries.
Bearer shares are certificates which convey corporate ownership to whomever possesses them. Such shares can be transferred by simply handing them to another person. To better understand how bearer shares work, think of another more common bearer instrument, paper money. It has value, and the presumptive owner is the person in whose possession it is found. Depending upon the jurisdiction in which the company has been founded, bearer shares may need to be temporarily exchanged for voting shares at shareholders meetings, and the person voting those shares may need to be identified – in such cases, the person voting the shares will ordinarily be an attorney so that the confidentiality of the beneficial owner of the shares can be protected. Now you can more fully understand why the OECD hates bearer shares. They provide real privacy – if they are properly used.
Properly does not include brazenly. Anyone who follows the advice of certain “corporate specialists” from Nevada who advise you to simply deny ownership of the bearer share company, even though you very publicly operated it, is an idiot! If you try that in a court of law you will at best, be cited for contempt, and at worst will find yourself in prison for perjury. In Uruguay for example, bearer shares are the norm, and registered shares – those with someone’s name on them – are the exception. As such, one can even open a bank account for a Uruguay company, at some banks in Uruguay, without ever being asked about the beneficial owner.
One of the more interesting bearer share stories is the way in which the Marshall Islands was able to keep its bearer shares. The main registry for Marshall Islands nonresident companies is, for all practical purposes, located a short distance west of Washington, D.C. It is fair to say that the U.S. has more than a little influence over its operations. However, the Marshall Islands Registry is privatized. It is owned by a group of very savvy, very influential Americans. The founder was Edward R. Stettinius, U.S. Secretary of State during the latter part of World War II. Consequently, it has survived and prospered while others have crashed and burned.
The Marshall Islands gave up forming international trusts as part of a deal with the U.S. which allowed it unhampered operation of the rest of its offshore companies. Consequently, Marshall Island corporations can have bearer shares, and Marshall Islands LLCs are among the finest in the world. Worried that the Marshall Islands’ negotiations with the U.S. government means collusion? Think again. the Marshall Islands Registry requires no client information whatsoever. Since it has no information, it cannot betray any trust. If that were to change, so would my recommendation concerning the Marshall Islands.
So contrary to what you may have been told, bearer shares do exist, and when used judiciously are an excellent tool in the offshore practitioners toolbox.Link here.
A NEW YEAR AND POSSIBLE NEW U.S. TAX LEGISLATION
Heavy penalties on U.S. offshore “promoters” have been proposed previously. Will they be enacted?
Hopefully, the new year will be both prosperous and free of further restrictions on our liberties, but I am somewhat apprehensive about the latter. With a Congress controlled by the Democrats, the prospects for beneficial tax and economic legislation is not favorable – particularly in the international part of the tax law. I make no claim to having a cyrstal ball or a good track record at making prognostications, but here are a few personal observations about what we might expect in the next two years.
Regarding the reduced personal income tax rates, it seems unlikely they will be repealed with new laws. The expansion of the 10% bracket clearly favors lower income taxpayers and is likely to be retained for at least the next two years. The expansion of the 15% rate bracket for married couples is scheduled to expire after 2010 but it does not seem likely to be a target for the Democrats who claim to be advocates of the middle class and the poor. The increased exemption for the alternative minimum tax (AMT) is scheduled to expire after 2010 and if the Democrats are still in control of the Congress, it probably will not be extended. On the other hand, repeal of the expanded exemption is unlikely in the next two years.
The estate tax is due to expire in the year 2010 but will be automatically reinstated in 2011 to the levels of the 2002 rates and exemptions if it is not extended. Some of the Democrats may attempt to change the law before then to reduce the exemption and increase the rates, but I suspect changes in the estate tax will not even get to the President’s desk in the next two years. After 2008, it will depend on the shift in power resulting from the 2008 elections. Some speakers at estate planning conferences have suggested that the eventual outcome will be a compromise to keep the estate tax but with a much larger exemption than in the past. They speculate that we may end up with an exemption amount of $2 to $3 million.
What does seem to be at risk are some of the international tax rules. High on that list is an attempt to impose a tax on unrealized gains of assets for those who expatriate. (A similar law exists in Canada.) Some of the Democrats want to repeal the foreign earned income exclusion, but that will be resisted with extensive lobbying by large corporations, by the CPAs and by the tax bar. There are proposals in the Congress to require tax preparers to be more “diligent” in seeking information about clients who have foreign accounts or foreign trusts, but that is being resisted by the tax accountant and tax law organizations.
Some influential members of Congress do not seem to believe that the present laws are adequate to deter U.S. taxpayers from evading taxes with foreign trusts and foreign corporations, so they are proposing heavy penalties on promoters. The definition of a promoter would include anyone who is involved in any way in helping a taxpayer to establish a foreign financial account, a foreign trust or a foreign corporation. Needless to say, the lawyers and accountants are strongly opposed to such rules. If these laws were passed it would have the effect of imposing a gag order on financial and legal advisors. Without the benefit of informed advice, taxpayers would end up relying on the advice of foreign promoters who are not subject to our laws and are largely unconcerned about helping U.S. persons to commit tax evasion.
The members of Congress who are the proponents of these restrictive rules talk about preventing people from evading taxes because it invokes some sympathy from the media and from the public. But I suspect the real reason is because they are concerned about an escalation of the movement of money from the U.S. to other countries and also of a movement of investors, entrepreneurs and even large corporations to more favorable political climates.
Hopefully, none of these adverse changes will occur in the next two years. In my humble opinion, the best we can realistically hope for is a do-nothing Congress.Link here.
PROTESTING THE TAX PROTESTERS
I am not now nor have I ever been a big fan of the “tax protester” movement. Wikipedia has a good definition: “A tax protester is an individual who denies the obligation to pay a tax (for which the government has determined that person is liable) based on a belief that the government is acting outside of its legal authority when imposing such taxes.” Tax protesters make what I believe are arcane legal arguments about why this or that tax has no legal basis. I am not going to bother over the details of their arguments. I have heard them for over 25 years ad nauseum. Fortunately, law professor Jonathan R. Siegel has performed that disagreeable task for us. A fine three-part series by by Sheldon Richman also exposes some of the fallacious arguments of the tax protesters.
The courts have held that there is a legal obligation to pay taxes. What the “legal” in that term means exactly is a very interesting question which I addressed at length in paper which I will publish at some point. The bottom line is that “legal” means that if you do not comply, the government may use physical coercion against you. The tax protesters apparently believe that if they make their esoteric arguments to the authorities that the authorities will magically cease to enforce tax laws. It is a complete waste of time in my view. Many tens of thousands of people have spent many hundreds of thousands of dollars supporting the tax protester movement. What have they accomplished? Several prominent tax protesters, including Irwin Schiff, have been convicted and sentenced to prison. As long ago as the early 1980’s my law professor told me that tax protesters were getting killed in the “advance sheets”, the most recent decisions of the U. S. Courts of Appeal.
Tax protesters are not exercising civil disobedience as Henry David Thoreau did. That would be an entirely different strategy. Civil disobedience involves deliberately violating an unjust law so as to arouse public sentiment against it. That is not what tax protesters are doing. Thoreau wrote in this regard: “Cast your whole vote, not a strip of paper merely, but your whole influence. ... If a thousand men were not to pay their tax bills this year, that would not be a violent and bloody measure, as it would be to pay them, and enable the State to commit violence and shed innocent blood. This is, in fact, the definition of a peaceable revolution, if any such is possible.”
Much tax protester time is spent praying to the Constitution. Big problem. Government has claimed the exclusive right to say what Constitutions mean. More importantly, the Constitution is a legal document. Law is a reflection of pre-legal values. The values that gave rise to the U.S. Constitution are in large part dead. The vast majority of the public no longer holds them. You might as well be speaking Chinese to them. Worse yet, a large portion of the population is on the federal dole. They will favor the tax authorities over the most elegant legal arguments against the legality of the federal income tax. This is the tax protesters’ biggest problem and yet I have never heard them address it! Say the Supreme Court actually bought the tax protester arguments and held that the income tax as presently understood is unconstitutional. Congress would meet in the morning and approve a constitutional amendment retroactively overruling that decision. 38 state legislatures would meet in the afternoon and ratify the amendment. Yawn.
Even as political strategy, tax protesting fails. It takes enormous effort just to understand their arguments and it is virtually impossible to translate them into plain English for a mass audience. Also, by urging individuals to stand up to the system by themselves, they allow the government to pursue a divide and conquer strategy. They counter with the common sense and intuitively appealing argument that the tax protesters are just making the rest of us pay more. A much more effective argument is to argue for a general and steep decline in taxation for all of us.
If legal arguments are a waste of time, how do we fight confiscatory taxation? By making moral, philosophical, economic, historical and practical arguments against it. And by explaining why the various programs funded by taxation are unnecessary or destructive and can be replaced by market-based solutions. To fight tax slavery and the horrendously destructive policies it funds, support the organizations working hard to end it – the Mises Institute, LewRockwell.com, the Future of Freedom Foundation, and the newest kid on the block, Free New York. To my tax protesting brothers and sisters. You have been led astray. Join us. The path of lesser resistance has gotten you nowhere.Link here.
W PUSHES ENVELOPE ON U.S. SPYING
New postal law lets Bush peek through your mail.
President Bush has quietly claimed sweeping new powers to open Americans’ mail without a judge’s warrant. The President asserted his new authority when he signed a postal reform bill into law on December 20. Bush then issued a “signing statement” that declared his right to open people’s mail under emergency conditions. That claim is contrary to existing law and contradicted the bill he had just signed, say experts who have reviewed it.
Bush’s move came during the winter congressional recess and a year after his secret domestic electronic eavesdropping program was first revealed. It caught Capitol Hill by surprise. “Despite the President’s statement that he may be able to circumvent a basic privacy protection, the new postal law continues to prohibit the government from snooping into people’s mail without a warrant,” said Rep. Henry Waxman (D-California), the incoming House Government Reform Committee chairman, who co-sponsored the bill.
Experts said the new powers could be easily abused and used to vacuum up large amounts of mail. “You have to be concerned,” said a career senior U.S. official who reviewed the legal underpinnings of Bush’s claim. “It takes Executive Branch authority beyond anything we’ve ever known.”Link here.
THE ECONOMY OF BELIZE
The Belizean economy is essentially a bifurcation of two different kinds of people, the locals versus the foreigners. With such a small population that is Belizean born and raised, the foreigners are really the ones who have started to dominate the economy. Because of this, many locals feel left behind due to a lack of education, lack of resources, and high crime rate – especially in the capital city.
Outside of Belize City, however, the country is starting to boom. Tourism is up 500% over the last few years, and agriculture and lumber workers are finding the soils of western Belize to be among the most fertile in the world. Thousands of acres of orange trees are being grown outside the western city of San Ignacio. With poor yields this year in Florida and Brazil, Belize has been one of the major beneficiaries of extremely high orange prices. Much of the same is true with the grapefruit crop, which was nearly eliminated in Florida from the hurricanes of 2004 and 2005.
Perhaps the commodity that most defines Belize though is mahagony. A rare hardwood that fetches premium prices on the world market, mahagony seems to have been a staple of the Belizean economy well before its independance from Britain. Much of the southern part of the country is dedicated to rows and rows of these trees. With the exception of the now booming tourist industry in San Pedro, the vast majority of foreign investment into the country has been in orange, grapefruit, bamboo, and mahogany enterprises.
Foreign entrepreneurs have been driving into the country in hordes. With an extremely relaxed immigration policy (it only takes 6 months to become a citizen), people from all over Central America and Asia have been opening up shops along the Cayes to take advantage of the influx of tourists into the area. Many of them have become quite wealthy, as there has been little competition from the local Belizean people. Other investors, who want to take advantage of the boom in commodities, have been running towards the western and southern parts of Belize. Only a short time ago, in an effort to make more productive use of the land, the government was essentially giving it away to the local people for $100/acre. With little knowledge of agriculture, many locals have done almost nothing with this land. Realizing they have no other option, they have now been selling this land to foreign workers.
Despite the manifest difference between the locals and the foreigners, the risk of a backlash from this is very low due to Belize’s extremely sparse population. Belize City itself only has a total of 60,000 people, and the foreigners have started to excercise not only economic control, but political power as well. In fact, the leader of the country is himself an Iranian born pro-western businessman. With such an influx of hard working, knowledgeable people into a country that already contains some of the most fertile land in the world, it is a very real possibility that Belize may be one of the great success stories over the next decade.Link here.
£65 MILLION ASKING PRICE FOR SEALAND TENANCY
Independent mini-state Sealand could be handed over to new “rulers”, if they are prepared to cough up the asking price of more than £65 million. It is a chance for someone to have their own island home off the Suffolk coast, a real getaway from it all – with just passing ships and seabirds for company.
One of the world’s smallest countries, the 550 square meter principality, which is seven miles off Felixstowe, is this year celebrating its 40th anniversary and currently undergoing major refurbishment work following a fire last summer. It has been ruled for the past four decades by Major Roy Bates, now 85, and his family but they are looking to “transfer” tenancy to someone else, although they would still keep ownership.
The chairman of the real estate company handling the sale said the firm was constantly being asked by clients if they could buy an island or even a small country. “The transfer of Sealand will be conditioned by the previous official status of autonomy of the ‘Principality of Sealand’ and without agreement to that the transfer will not take place,” he said. “Now whoever comes to ask us if they can create their own country, we will be able to offer them the closest concept that exists – Sealand.”
The former war-time fort is always occupied by some Sealanders or members of the country’s security service, and also an internet company which uses it as a base for its servers. There has been speculation for several years about whether the Bates family might one day sell it but they have insisted Sealand is a sovereign country and not up for sale. Prince Regent, Prince Michael of Sealand said the aim of finding tenants was to generate some money to invest in Sealand. Repairs costing between £250,000 and £500,000 have been carried out since the fire last June, which was caused when a generator exploded.Link here. Sealand weblink here.
LUXEMBOURG STANDS BY SWITZERLAND IN TAX DISPUTE WITH EU
Luxembourg has defended Switzerland’s position in the ongoing dispute between Bern and the EU over corporate tax breaks. In an interview with the Zurich-based Tages-Anzeiger newspaper on, Luxembourg Finance Minister Luc Frieden said attacks on Swiss cantonal taxation stemmed from a “poor knowledge of the federal system” and “jealousy”. The interview followed talks between Frieden and his Swiss counterpart, Hans-Rudolf Merz. “When a growing number of individuals and companies leave a country, the country itself should try and improve its own working and living environment rather than accuse others,” Frieden told the Tages-Anzeiger.
Switzerland has been embroiled in a corporate tax dispute with the EU since September 2005. Many EU countries are angry that tax revenues are being lost as companies relocate to Switzerland to take advantage of lower levies. In early January Arnaud Montebourg – a French socialist politician and spokesman for presidential candidate Ségolène Royal – urged the EU to crack down on Swiss cantons that set low tax rates to entice companies and individuals to relocate from other countries. Montebourg also took a swipe at Luxembourg, Liechtenstein and Monaco.
“Those who make such statements are defending higher taxes,” said Frieden. “And the fact that certain countries have lower tax rates than others should not automatically be seen as unfair tax competition – let alone banditry,” he added, in response to Montebourg’s comments.
René Matteotti, a tax law professor at Bern University, told Swiss German public radio that this was the first time an EU member country had vocally supported the Swiss position on taxes. Matteotti said that as long as there was no consensus within the EU, Brussels was unlikely to take measures against Switzerland.Link here.
THE DEATH OF CASH
RIP Money. Born 640 B.C. Died 2007 A.D. Payment by phone is here.
Money talks, and in the very near future it will be talking through your mobile phone. Fumbling for coins in your pocket will be a thing of the past as the latest technology lets you load up your phone with credit and pay by simply pointing it at the till. In the coming year, even the smallest purchases will be paid for electronically after credit card giants Visa and Barclaycard struck a deal to create the next generation of “wave and pay” cards for purchases of less than £10. Users will simply wave the card across a scanner to pay for small items for which they would normally use coins, such as their Daily Mirror or a pint of beer.
Already more purchases are made on plastic than in cash, and a study by retail analyst Datamonitor suggests that cards could replace cash altogether within 10 years. Last year Mastercard launched Cashplus, the first UK version of the pre-paid plastic cards popular in the U.S. No bank account is needed as they can be topped up at the Post Office. Oyster cards, which many Londoners use to pay for public transport, now account for 70% of Tube and bus journeys. Tesco is apparently considering its first totally cashless store while German hypermarket Real is trialing stores where customers can only pay with a credit or debit card.
But your mobile phone is likely to be the biggest threat to cash. Last year a new EU ruling eased the restrictions on using them to pay for goods, and soon we will be able to pay for anything from theater tickets to parking fees simply by sending a text message. In Berlin, shoppers can already buy a drink by sending a text message to the vending machine. The charge is added to the monthly phone bill. Experts believe it will not be long before so-called “mobile commerce” – or m-commerce – takes off, especially in countries with better mobile phone networks than banks. Mark Bowerman, from the Association of Payment Clearing Services, says, “People use cards more than cash, but the data on a card can be stored anywhere. There’s no reason why it can’t be kept on your mobile phone, or even underneath the skin on your wrist.”
Consumer groups are suspicious of moves to abolish cash transactions. Janice Allen, from the National Consumer Council, says, “One of the most worrying aspects of replacing cash is the reliance on making our personal information widely available.”Link here.
A SAFE, EASY WAY TO ENCRYPT FILES ON YOUR COMPUTER
Any system that encrypts your entire hard drive is overkill for most PC users. I prefer encrypted safes, which are files that contain encrypted folders and files. To the outside world, a safe looks like a big file filled with gobbledygook. Open a safe with its password, and you reveal a virtual drive holding your sensitive data. When you are done and you close the safe, the data reverts to gobbledygook. Safes are easy to use, transportable from one PC to another, and a breeze to back up. I recommend the free open-source safe program TrueCrypt, which supports multiple heavy-duty encryption algorithms. TrueCrypt can even place your safe inside another safe.
No encryption is secure with an easy-to-guess password. Safest is a string of 20 or more apparently random letters and numbers. But how do you remember such a password? Make up an easy-to-remember but impossible-to-figure-out formula of family names, birthdays, and memorable words. For instance, use your kids’ names spelled backward, with every third letter capitalized, followed by your birthday squared. Be sure, however, not to use a formula that has been printed in PC World. Here are more tips on crafting secure passwords. Write the password or the formula on a business card and carry it in your wallet. It is unlikely that someone will steal your wallet and your PC, and even less likely that they will figure the card out.
What files should you put in the safe? Any that you do not want crooks, competitors, coworkers, or even your own children to see. One top priority is financial information, especially if it involves credit card, bank, or Social Security numbers. Passwords to retail Web sites should also be stored in the safe. You might put some sensitive work-related files there as well (although your IS department likely has an encryption policy). Your résumé , family photos, private e-mail, and other files that you want to keep secure and confidential are candidates for the safe, too.Link here.
UK DESCRIBED AS WORLD’S “FIRST ONSHORE TAX HAVEN”
Accountancy firm Grant Thornton calculated the scale of tax avoidance by the super-rich and concluded that Britain’s 54 billionaires pay tax on only a tiny fraction of their wealth. The Sunday Times was forced to commission the research after HM Revenues & Customs (HMRC) refused requests by the newspaper under the freedom of information act to disclose the aggregate payments made by Britain’s super-rich. Even though no names would have been made public, the HMRC claimed the release of such information would breach taxpayer confidentiality.
Grant Thornton analyzed the published accounts and other records publicly available on the 54 billionaires identified by the 2006 Sunday Times Rich List. The research concluded that, in total, the 54 billionaires paid an estimated tax bill of just under £75 million. In addition to the UK becoming an onshore tax haven, the Blair government has fought to retain so-called loopholes that allow offshore tax havens to be exploited by the super-rich.
According to the Times, the loophole most taken advantage of by billionaires is that whereby “non-domicile” status is offered to foreigners or those with foreign-born parents living in the UK. This clause enables wealthy individuals to claim they are “domiciled” abroad, even though they may carry British passports and may have lived in the country for decades. Those afforded such privileged terms are free to locate their assets in offshore tax havens and liable only to pay tax on those sums they choose to bring to Britain. Another law allows the wealthy to become non-residents, allowing them to move abroad, often to a tax haven like Monaco or Zurich, but return to the UK for a maximum of 90 days or approximately a quarter of the year.
Before gaining power in 1997 the now Chancellor of the Exchequer Gordon Brown vowed to close the so-called loopholes benefiting the super-rich. 19 months ago a consultation paper was promised on the issue, but the government is “continuing to review” the residence and domicile rules. In contrast, every year hundreds of thousands of self-employed workers and owners of small businesses come into conflict with HMRC and are threatened with jail over relatively small amounts of money.Link here.
BUSH PUSHING AMERICA TOWARD A POLICE STATE
President George W. Bush’s brand of conservatism is something completely foreign to traditional norms. He has outspent even the most liberal administrations. He has led the nation into undeclared foreign wars under false pretenses. He has bloated the size and scope of the federal government like no president since Franklin D. Roosevelt. He has increased federal funding for abortion providers at home and abroad. Over the objections of a Republican-controlled Congress, Bush even supported the Clinton gun ban.
However, it is President Bush’s preoccupation with turning America into a total surveillance society that separates his administration from any and all others. Before this administration, no conservative president had endorsed the concept of turning the U.S. into the fulfillment of Aldous Huxley’s Brave New World, but that is exactly what G.W. Bush is attempting to do. Under the rubric of fighting terrorism, Bush has done more to strip the American people of their freedoms than any administration since Abraham Lincoln.
The latest example of Bush’s tyrannical tendencies comes in the form of his most recent “signing statement”. And please understand that President Bush has issued more “signing statements” than any president in history. In fact, before President Reagan, there was a total of only 75 “signing statements” by all previous administrations. Then, Presidents Reagan, George H.W. Bush, and Bill Clinton issued 247 “signing statements” combined. So far, President George W. Bush has issued 147 “signing statements” that have challenged constitutional restrictions (upon him) to more than 750 statutes.
After signing a postal reform bill called H.R. 6407, the “Postal Accountability and Enhancement Act”, President Bush issued a “signing statement” that declared his (Bush’s) right to open the private mail of American citizens without a judge’s warrant. According to the New York Daily News, “That claim is contrary to existing law and contradicted the bill he had just signed, say experts who have reviewed it.” The News continues by saying, “Experts said the new powers could be easily abused and used to vacuum up large amounts of mail.” Bush’s decision to grant himself the power to open private mail without a warrant is similar to what he has done in the recent past. Remember that he recently said he had the authority to perform warrantless eavesdropping on the American people.
A total surveillance society is something that Americans heretofore understood to be completely contrary to the principles of liberty. Such a society was reserved for Marxist or Nazi regimes, and was repugnant to all true Americans. No More. President Bush has taken the concept of a surveillance society into the mainstream of America’s public life and culture. Sadder still is the fact that there is only a handful of people that seem worried about it, and none of these are conservative Christian leaders. Since G.W. Bush became president, the American people have had their Fourth, Fifth, Sixth, and Seventh Amendment protections gutted. Phone calls, emails, and even private discussions can be (and are) monitored by federal police agencies without court order. Beyond that, virtually all of their major banking transactions are constantly monitored, as well as their travel and shopping activities.
The Republican Party has demonstrated that it has no inclination to oppose Bush’s New World Order, that is for sure. The GOP always was, and still is, the party of Big Business. And just who do you think is getting all the high-dollar federal contracts to do all this national snooping? You bet. The GOP’s Big Business buddies. The national conservative Christian leaders have likewise demonstrated a total disregard for Bush’s push for an Orwellian society. After all, they have been too busy enjoying the perks and benefits of sitting at the king’s table. Plus, they do not have to worry about being the target of Bush’s secret police stings. They are part of the “inner circle”, don’t you know? That brings it down to the Democrats. What will Nancy Pelosi and company do to slow down this emerging police state juggernaut? Probably not much. Their track record is hardly reassuring. This is the same bunch that took delight in trashing the Second Amendment.
In the end, it always comes down to “we the people.” Until America’s local pastors, local sheriffs, local and state elected officers, and local and state judges begin standing up to this out-of-control federal monstrosity, the slippery slide into fascism will continue. Whoops! I just remembered that most of those people are also on the federal take. Therefore, a return to traditional conservatism is just about out of the question. Then again, we could do something revolutionary, such as casting aside both major political parties, and start supporting true constitutionalists for a real change in America. The skeleton for such a movement already exists in the form of the Constitution Party.Link here.
PANAMA IS NOT CHEAP ANYMORE
In the late 1990s, I first began hearing about Panama while living in Costa Rica. There was a groundswell movement of expats who felt that the cost of living in Costa Rica was too high and sought greener pastures, quite literally. They found their lower cost lifestyle a few hundred miles south in Panama’s highlands. The words “Chiriqui” and “Boquete” were a total mystery back then, but over the past years they have emerged clearly as affordable living options to many foreign retirees.
Houses for $60,000? Farm land for under $900 an acre? At the very least, I was skeptical about how good life could be at those costs. After some investigation, I became pleasantly surprised by both the charming mountain town of Boquete and the cosmopolitan flair of Panama City. That was 2001. I fell in love with Panama instantly and began to spend as much time down there as I could.
Six years later, the contrarians who sang Panama’s praises are no longer a muted, limited chorus. They are a marching band. Thousands of retirees now call Panama home. Multinational businesses have opened shop here. The $5 billion expansion of The Canal was recently approved and opportunists are rushing to lap up the drippings. Dozens of cranes dot the Panama City skyline, a harbinger of the “new Panama” that is being recreated at a Dubai-esqe pace. The once-quaint town of Boquete is now bustling, with new restaurants and small hotels seemingly opening monthly.
The bad news? Panama is not a dirt cheap place to retire anymore. And Panama real estate is not for bargain hunters either. For those hoping to snatch up a former military house in the former Canal Zone for $50,000, that ship has sailed. Prices rising to meet the exponential increase in demand for real estate in Panama. The Europeans and Canadians who were the pioneers of Panama retirement are now being outpaced by the next wave of investors – Americans. Acting in line with the common assumption that all U.S. citizens inherit a money tree, local developers are building homes, condos and apartments that reflect “gringo” tastes and budgets. If the shroud of secrecy over Panama was not already lifted, Hollywood power couple Brad and Angelina’s highly publicized New Year’s visit officially let the cat out of the bag.
The good news? Some things are still very cheap in Panama. In general, the cost of living is very affordable. Healthcare is extremely reasonable and the quality of service is excellent. An entrée at a nice restaurant in Panama City ranges from $8 to $15, and a beer in a country side watering hole can be found as cheap as $.50. And unlike other offshore retirement destinations, Panama boasts great selections and prices on imported electronics, furnishings and other consumables thanks to low taxes and The Canal.
No doubt those same expats who were grumbling about life in Costa Rica nearly a decade ago are now in a local cantina somewhere in Panama voicing similar concerns. Sadly, a secret this good does not stay a secret very long.Link here.
HONG KONG REMAINS WORLD’S MOST FREE ECONOMY. SINGAPORE #2
Hong Kong has been ranked as the world’s most free economy for the 13th consecutive year by the Heritage Foundation. The Heritage Foundation’s annual Index of Economic Freedom, published in conjunction with the Wall Street Journal, aims to produce a user-friendly index as a tool for policymakers and investors. This year’s study assessed 10 broad factors in 157 economies worldwide, including business freedom, trade freedom, fiscal freedom, freedom for government, monetary freedom, investment freedom, financial freedom, property rights, freedom from corruption and labor freedom. Hong Kong was followed by Singapore, Australia, the U.S. and New Zealand, respectively. India and China ranked near the bottom of the index at 104th and 119th, the study said.
Hong Kong was ranked first in four broad factors – trade, investment, financial freedom and property rights. The city also ranked among the top 10 in another four areas, namely fiscal freedom, freedom from government, monetary freedom and labor. The report said that Hong Kong’s income tax and corporate tax rates were extremely low, and overall taxation was relatively small as a percentage of GDP. It also noted Hong Kong’s simple business regulation and highly flexible labor market. Hong Kong was wide open to investment, it said, with virtually no restrictions on foreign capital. China was hobbled by a lack of investment freedom, weak financial institutions and a poor judicial system that did not properly protect property rights, said Edwin J. Feulner, president of Heritage Foundation. Although Hong Kong is a Chinese territory, it was ranked separately from China because it has retained a separate economic and legal system since its return to Chinese rule in 1997.
The Foundation complimented Hong Kong on being one of the world’s leading financial centers, with an extensive banking and services industry that was transparent and regulated non-intrusively. It highlighted that the judiciary was independent of politics, the city was virtually corruption-free, and it had an exemplary ability to protect property rights. However, But the city did not do as well as Singapore in labor freedom and in the ease of starting businesses. Hong Kong was also seen as less free from corruption concerns than Singapore.
“We see the role of the Government as that of a facilitator,” responded Hong Kong Financial Secretary, Henry Tang. “We provide a business-friendly environment where all firms can compete on a level playing field and establish an appropriate regulatory regime to ensure integrity and smooth functioning of a free market. ... We will study the report carefully and strive to preserve fervently those strong aspects of our economic freedom, while enhancing those other aspects where there is room for further improvement.”Links here and here.
EPIC’S 2006 PRIVACY YEAR IN REVIEW
Here are the Top Ten Privacy Stories of 2006 and Ten Privacy Issues to Watch in 2007 from the Electronic Privacy Information Center (EPIC).
Top Ten Privacy Stories of 2006.
Issues to watch in 2007.
USE OF SUPER-ACCURATE SURVEILLANCE TECHNOLOGY BRINGS UP STICKY LEGAL ISSUES
In 1998 when an Illinois state trooper stopped him for driving 6 miles per hour over the speed limit, Roy Caballes was carrying 282 pounds of marijuana in his trunk. At first it looked like he would get off with just a warning. Then another officer pulled up and swept his car with a drug-sniffing dog named Krott. The pooch uncovered the dope. Caballes thought the cops did not have a legitimate reason to bring in Krott, and he fought the search. In 2003 the Illinois Supreme Court ruled that the officers had indeed violated the Fourth Amendment by transforming the traffic stop into a drug investigation without probable cause, or even the weaker “reasonable suspicion”. But in the 2005 decision Illinois v. Caballes, the U.S. Supreme Court ruled that the dog sniff could not have rendered an otherwise lawful traffic stop unconstitutional unless the dog sniff itself violated Caballes’s “constitutionally protected interest in privacy.” The Court concluded it did not, citing a 1983 decision in which it ruled that, because a dog sniff reveals only the presence of contraband in which there is no “reasonable expectation of privacy,” it is not a “search” at all. The Supremes sent the case back to Illinois, and Caballes ended up with a 12-year prison sentence.
The dog sniff that caught Caballes is just one crude, old-fashioned example of the search technologies available to law enforcement. A new wave of advanced surveillance tools is capable of detecting not just drugs but weapons, explosives, and illicit computer files, potentially flying under the Fourth Amendment’s radar all the while. A handheld scanner picks up stray particles of cocaine on a car during a routine traffic stop. Is that a search? A high-tech camera detects the gun one pedestrian is carrying under his jacket. Is that a search? A forensic analyst finds a single image of child pornography on a computer server containing thousands of files owned by hundreds of users, without ever seeing any other private information. Is that a search?
In a nation whose reams of regulations make almost everyone guilty of some violation at some point, Americans have grown accustomed to getting away with minor transgressions – the occasional joint or downloaded movie or high-speed dash to the airport. For at least some crimes, though, the expectation that our peccadilloes will slip through the cracks may soon be outdated. The new style of noninvasive but deeply revealing detection – call them “pinpoint searches” – will require rapid adjustments in both legal rules and social mores.Link here.
THE PERILS OF EMERGENCY POWER
The New York Times reported last June that President Bush invoked the International Emergency Economic Powers Act to justify warrantless searches of Americans’ and other people’s financial data. According to Treasury Undersecretary Stuart Levey, the U.S. government may have conducted “hundreds of thousands” of warrantless searches of Americans’ and others’ personal financial data. The Bush administration used broad administrative subpoenas to commandeer the personal data – simply a bureaucratic command to “give us the information.”
The media paid little attention to the law the president invoked to justify the incursion. Instead, almost all the coverage and analysis was consumed by harangues over whether the NYT was guilty of treason for informing Americans of what the federal government was doing. But the International Emergency Economic Powers Act (IEEPA) is not something safe to ignore. This law gives the president the prerogative to proclaim the existence of an “unusual and extraordinary threat to the national security, foreign policy, or economy of the United States” that originates “in whole or substantial part outside the United States.” Once the president pushes this power, many of the limits to his other powers vanish. This law was passed in 1977, codifying and slightly reforming some of the powers that Franklin Roosevelt had commandeered during the Great Depression.
In 1973, a congressional Special Committee on the Termination of the National Emergency reported,
Since March 9, 1933, the United States has been in a state of declared national emergency. In fact, there are now in effect four presidentially proclaimed states of national emergency: In addition to the national emergency declared by President Roosevelt in 1933, there are also the national emergency proclaimed by President Truman on December 16, 1950, during the Korean conflict, and the states of national emergency declared by President Nixon on March 23, 1970, and August 15, 1971.
These proclamations give force to 470 provisions of federal law. These hundreds of statutes delegate to the president extraordinary powers, ordinarily exercised by the Congress, which affect the lives of American citizens in a host of all-encompassing ways. This vast range of powers, taken together, confers enough authority to rule the country without reference to normal constitutional processes.
These emergency decrees had resulted in some of the most devastating power grabs in U.S. history.
On April 5, 1933, Roosevelt commanded all citizens to surrender their gold to the government. No citizen was permitted to own more than $100 in gold coins, except for rare coins with special value for collectors. Roosevelt used the same “hoarding” rhetoric against anyone who owned gold that Stalin used against Ukrainian peasants who sought to retain part of their wheat harvest to feed their families. But while Stalin sent execution squads to kill peasants who had a few bushels of grain hidden in their hovels, Roosevelt was kinder and gentler, seeking only 10-year prison sentences for any citizen who retained more than five Double Eagle gold coins.Link here.
CONFESSIONS OF AN ECONOMIC HIT MAN AUTHOR INTERVIEWED (2004)
How the U.S. uses globalization to cheat poor countries out of $trillions.
John Perkins describes himself as a former economic hit man – a highly paid professional who cheated countries around the globe out of trillions of dollars. 20 years ago Perkins began writing a book with the working title, Conscience of an Economic Hit Man. Perkins writes, “The book was to be dedicated to the presidents of two countries, men who had been his clients whom I respected and thought of as kindred spirits – Jaime Roldós, president of Ecuador, and Omar Torrijos, president of Panama. Both had just died in fiery crashes. Their deaths were not accidental. They were assassinated because they opposed that fraternity of corporate, government, and banking heads whose goal is global empire. We Economic Hit Men failed to bring Roldós and Torrijos around, and the other type of hit men, the CIA-sanctioned jackals who were always right behind us, stepped in.”
John Perkins continues, “I was persuaded to stop writing that book. I started it four more times during the next twenty years. On each occasion, my decision to begin again was influenced by current world events: the U.S. invasion of Panama in 1980, the first Gulf War, Somalia, and the rise of Osama bin Laden. However, threats or bribes always convinced me to stop.”
But now Perkins, who worked from 1971 to 1981 for the international consulting firm of Chas T. Main where he was a self-described “economic hit man”, has finally published his story. The book is titled Confessions of an Economic Hit Man. John Perkins joins us now in our Firehouse studios.
Perkins: “... [W]hen the National Security Agency recruited me, they put me through a day of lie detector tests. They found out all my weaknesses and immediately seduced me. They used the strongest drugs in our culture, sex, power and money, to win me over. I come from a very old New England family, Calvinist, steeped in amazingly strong moral values. I think I, you know, I am a good person overall, and I think my story really shows how this system and these powerful drugs of sex, money and power can seduce people, because I certainly was seduced. And if I had not lived this life as an economic hit man, I think I would have a hard time believing that anybody does these things. And that is why I wrote the book, because our country really needs to understand, if people in this nation understood what our foreign policy is really about, what foreign aid is about, how our corporations work, where our tax money goes ...”Link here.
MAJOR INVESTMENT BANK ISSUES WARNING ON STRIKE AGAINST IRAN
Warning that investors might be “in for a shock,” a major investment bank has told the financial community that a preemptive strike by Israel with American backing could hit Iran’s nuclear program. The banking division of ING Group released a memo on January 9 entitled “Attacking Iran: The market impact of a surprise Israeli strike on its nuclear facilities.” ING is a global financial services company of Dutch origin that includes banking, insurance, and other divisions. The report’s author, Charles Robertson, also authored an update in ING’s daily update that further underscored the bank’s perception of the risks of an attack.
Robertson admitted that an attack on Iran was “high impact, if low probability,” but explained some of the reasons why a strike might go forward. The January 9 dispatch describes Israel as “not prepared to accept the same doctrine of ‘mutually assured destruction’ that kept the peace during the Cold War. Israel is adamant that this is not an option for such a geographically small country. ... So if Israel is convinced Iran is aiming to develop a nuclear weapon, it must presumably act at some point.” Sketching out the time line for an attack, Robertson says that “we can be fairly sure that if Israel is going to act, it will be keen to do so while Bush and Cheney are in the White House.”
Robertson suggests a February-March 2007 timeframe for several reasons. First, there is a comparable situation to Israel’s strike on Iraq’s nuclear program in 1981, including Prime Minister Ehud Olmert’s political troubles within Israel. Second, late February will see Iran’s deadline to comply with UN Security Council Resolution 1737, and Israel could use a failure of Iran and the UN to follow through as justification for a strike. Finally, greater U.S. military presence in the region at that time could be seen by Israel as the protection from retaliation that it needs. In his January 15 update, Robertson points to a political reason that could make the assault more likely – personnel changes in the Bush administration may have sidelined opponents of attacking Iran.Link here.
ROLL UP FOR THE GREAT BRITISH INHERITANCE TAX GIVEAWAY!
Gifting and transferring wealth into trusts are among strategies considered to avoid large death taxes.
As more Britons are caught out by inheritance tax than ever before, due to increased wealth and rising house prices, new research has revealed that £103 billion ($203 billion) will be given away to friends and family to avoid huge death tax bills. The study, commissioned by YouGov Plc for pensions and investments firm Scottish Widows, shows that 41%, or 10 million households, now have an estate liable for a 40% tax bill on their death – up from 34% last year.
Of those people, 43% have taken, or plan to take, steps to mitigate this bill, with 44%, or 1.2 million people, planning on giving away either a lifetime gift, or an annual gift to friends and relatives. The average amount people are prepared to gift is £86,000. 47% said they would like their gift to be used to help their relatives buy property, 20% want their beneficiaries to use the gift for their own retirement, 22% would like recipients to save it for their own children, and 22% would like the benefactors to use it to pay off their debts.
“IHT is a tax that affects almost half of the country and it is really important that people prepare for the possibility of leaving a huge tax bill on their death,” says Anne Young, tax expert at Scottish Widows. Gifting is becoming an increasingly recognised way to avoid IHT, but few gifts are totally exempt. You can give £250 away to an unlimited number of people as well as up to £3,000 per tax year without tax consequences. And if the donor lives for seven years after making any other absolute gift, that too will be exempt.
Trusts are also a viable option for those wishing to protect their assets, and Scottish Widows finds that four in 10 people who intend to take, or have already taken, steps to reduce their inheritance tax bill have looked at the option of a discretionary will trust or a life assurance policy written under trust. However, for the majority that have not considered this option, 29% admit to not knowing enough about them, and one in 10 has never heard of trusts. Notably, 24% say that they are now wary of putting money into trusts, and 6% has no faith in these products since the Government introduced the Finance Act 2006 which changed the way trusts are taxed.
“People want to leave their family with as much of their assets as possible, and although people are making headway in recognizing this, they could still be facing a major problem,” Anne Young continues. “Trusts should be more popular than they are. Although people may be unsure how they work, they are a relatively straightforward way of helping to reduce, or perhaps set aside a fund to pay for, an IHT bill. People should not automatically dismiss this option, but rather seek professional advice and get a better understanding of the way trusts can help.”
The Scottish Widows research found the most popular actions people have taken to mitigate against inheritance tax are making a will (62%), setting up a discretionary will trust (32%), visiting a financial adviser (28%), changing joint ownership of the home to tenants in common (28%), giving an annual gift up to £3,000 (23%), and making a lifetime gift to friends/relatives/charity/trust (21%).Link here.
“SMALLEST COUNTRY” FOR SALE – SEA VIEWS INCLUDED, LAND EXTRA
It is not every day you see a real estate listing advertising “the possibility to have your own country. ... something exclusive to a very few lucky people.” But that is one current offer from the InmoNaranja agency in Motril, Spain. The “country” in question, Sealand, is said to come with its own citizens, government, money, stamps, flag, national anthem, and other trappings of nationhood – all for about $1 billion. And you get to be royalty.
It may sound like a bargain, but it does not necessarily look like one. The “Principality of Sealand” is a rusting 5,920-square-foot (500-square-meter) platform perched on two concrete pillars in the North Sea off eastern England. It is one of many so-called micro-nations – curious places where, if they actually exist, the chief export seems to be hyperbole. Sealand, a former British naval fort built during World War II, is offered for sale on behalf of “Prince Michael,” aka Michael Bates – son of Paddy Roy Bates, a retired army major turned fisher turned pirate radio station operator.
The elder Bates appropriated the abandoned sea fort, called Roughs Tower, from another pirate-radio operator in the mid-1960s. Having been convicted of breaking U.K. broadcasting law from another sea platform in 1966, Paddy Roy Bates aimed to restart BBMS (his Britain’s Better Music Station) from the farther-out tower—though he never did. Instead, Prince Roy of Sealand, as he called himself, declared Roughs Tower an independent country in 1967—making this year the 40th anniversary of “probably the smallest country in the world,” according to Inmonaranja.
Bates’s sovereignty claim received a boost in 1975 after he repelled a British Navy assault by firing warning shots from his principality. U.K. courts ruled that the platform – located 6 miles off the county of Suffolk was outside British jurisdiction. At the time, the border of U.K. territorial waters was set at 3 miles from the coast. But in 1987 the British government extended its territorial waters to 12 miles from the coast.
Sealand’s Web site claims “long-standing membership of the international community of States.” But the U.K. government says it does not recognize Sealand, and neither do other nations. German and U.S. court rulings have both rejected its claims to independence. Other current micro-nations include the Gay and Lesbian Kingdom on islands in Australia’s Coral Sea – formed by a group of gay-rights activists in Queensland – and the Hutt River Province Principality, established in 1970 by farmers in the state of Western Australia in protest of changes to government agricultural policy. But, as with Sealand, you will not find their names on the map. Widely recognized pocket-size states include Vatican City (the Catholic city-state covers 0.2 square miles), Andorra in the Pyrenees mountains, San Marino within Italy, and the Mediterranean Principality of Monaco.
Things are not always clear-cut, said David Miller, a senior map editor with the National Geographic Society in Washington, D.C. There are gray areas where “sovereignty is disputed or yet to be resolved,” such as Somaliland in northern Somalia. “Somaliland has been a state since 1991, when the country fell into chaos with fighting among warlords” and Somalia’s government all but dissolved, he said. Somaliland is not generally recognized as a state, partly because its borders remain blurry in places due to the Somaliland authorities’ inability to secure the frontier from neighboring warlords in Somalia.
But Sealand has no claim to statehood “whatsoever,” Miller said. “It’s a platform. They don’t have land. They might claim the platform but the land underneath, or control of the land, is just not there. And of course there’s no international recognition.” Miller also points out that, since 1987, Roughs Tower has been within U.K. territorial waters. “It is by all intents and purposes under the sovereignty of the United Kingdom. There just hasn’t been a specific court challenge in the U.K. that tests ownership of the platform.”
So far the U.K. government has yet to assert its authority over the Sealand. That could explain why potential buyers do not seem put off by Sealand's tenuous status. Sealand, in keeping with its pirate-broadcasting tradition, is being marketed as a “digital paradise”, attracting interest from Web companies that might prefer to operate outside established copyright laws. Sealand’s latest suitors include The Pirate Bay, which allows Web users to download pirated movies and music. But British legal experts say that, since the platform stands in U.K. waters, U.K. laws should apply.
Prince Michael of Sealand, though, also has a more traditional sales pitch. “The neighbors are very quiet,” he told BBC Radio. “There is a good sea view.”Link here.
Start (or buy) your own country.
“What is wrong with just starting your own country?” my late good friend Bob Kephart used to ask rhetorically in his geopolitically reflective moments. Bob, a staunch libertarian and the founder of The Sovereign Society, was a strong believer in minimalist government. (Actually he was a quasi-anarchist who disliked all government.) As a self-made man, he used his wealth to promote liberty and freedom in every way possible. (See An Extraordinary Man.)
I thought of Bob’s suggestion because of the announcement last week that Sealand was up for sale. Sealand, which was built as a wartime fort in 1941, is a steel platform perched on two concrete towers. Accessible only by helicopter and boat, it sits seven miles off the coast of Harwich in Essex. In 1967, Paddy Roy Bates, a former English army major, settled there with his family. He proclaimed the island his own state and gave himself the title of prince. A judge ruled that Sealand lay beyond the 3-mile limit of Britain’s territorial waters. So he was, therefore, outside government control.
Sealand delighted Bob and he even joked about seeking citizenship from Prince Roy. Here was a free British citizen declaring himself to be outside London’s control and thumbing his nose at Her Majesty’s mighty government. A 2004 article in Harper’s magazine set forth, with some tongue in cheek, the several alternatives U.S. citizens or resident aliens have when they decide to say “bye bye” to America. It even addressed the gaggle of self-appointed “nations” that always fascinated Bob, including “Sealand” and the floating “country” of ResidentSea. Harper’s suggested correctly that Americans have a legal right to “expatriate” – to formally end their U.S. citizenship. But I warn you not to contemplate such a move unless and until you have acquired a new, second citizenship in another nation.
The Harper’s article spoke about instant economic citizenship in two Caribbean nations that costs big bucks and they discussed the risk of becoming a man without a country. But what they do not tell you how to move offshore and achieve eventual freedom from U.S. taxation with complete expatriation. It is legal, but long and complex. Meanwhile you may want to check out this ad. To heck with Charles ... you too can be a prince!Link here.
BLOGGERS WHO CRITICIZE GOVERNMENT MAY FACE PRISON
You would be forgiven for thinking that it was some new restriction on free speech in Communist China. The U.S. Government wants to force bloggers and online grassroots activists to register and regularly report their activities to Congress in the latest astounding attack on the internet and the First Amendment. Richard A. Viguerie, Chairman of GrassrootsFreedom.com, a website dedicated to fighting efforts to silence grassroots movements, states:
“Section 220 of S. 1, the lobbying reform bill currently before the Senate, would require grassroots causes, even bloggers, who communicate to 500 or more members of the public on policy matters, to register and report quarterly to Congress the same as the big K Street lobbyists. Section 220 would amend existing lobbying reporting law by creating the most expansive intrusion on First Amendment rights ever. For the first time in history, critics of Congress will need to register and report with Congress itself.”
In other words Nancy Pelosi and the Democrats may redefine the meaning of lobbying in order that political communications to and even between citizens falls under the same legislation. Under current law any “lobbyist” who “knowingly and willingly fails to file or report” quarterly to the government faces criminal charges including a possible jail term of up to one year. The amendment is currently on hold.
In recent months, a chorus of propaganda intended to demonize the Internet and further lead it down a path of strict control has spewed forth from numerous establishment organs. Make no mistake, the internet, one of the greatest outposts of free speech ever created is under constant attack by powerful people who cannot operate within a society where information flows freely and unhindered. All these moves mimic stories we hear every week out of State Controlled Communist China, where the internet is strictly regulated and virtually exists as its own entity away from the rest of the web. The phrases “Chinese government” and “Mao Zedong” have even been censored on China’s official Web sites because they are “Sensitive phrases”.
Under section 220 of the lobbying reform bill, Infowars.net could be required to seek a license in order to bring this information to you. IF we were granted a license we would then have to report our activities to the government four times per year in order to bring you this information. Does that sound more like free speech or more like totalitarianism? As well as calling the Senate you should go to GrassrootsFreedom.com which has a petition that you can sign against Section 220 of S. 1, the lobbying reform bill.Link here.
YOU CAN STILL DEPEND ON SWITZERLAND
What is it with the rest of Europe, (or the world, for that matter), when it comes to Switzerland? The European Union, in particular, just will not leave the Swiss alone, especially when it comes to taxes. Swiss leftist politicians, a definite minority in a nation where the conservative Swiss Peoples Party got the largest percentage in the last elections, love to join with leftist foreigners demanding higher taxes. And keep in mind that Switzerland is not even a member of the EU. Swiss voters have rejected that unhappy notion repeatedly.
So this week comes news reports that the minority Swiss left, parroting complaints from the EU, is trying to abolish a system that, for over half a century, has attracted wealthy foreigners to make their home in Switzerland in return for a special tax deal, called a “forfeit”. That deal is currently available to 3,600 foreigners who pay an average CHF75,000 ($60,050) each in tax, earning Switzerland CHF300 million ($240.2 million) per year. The system allows foreign citizens living there to negotiate a fixed tax rate based on their Swiss property factors, excluding income earned outside Switzerland. (Many nations entice foreigners as individual or corporate residents by exempting them from all or most taxes, including the U.K., Monaco, Luxembourg, Austria and Ireland.)
Only last month EU bureaucrats were attacking Switzerland, claiming low corporate tax rates in the Swiss cantons are a subsidy. A Swiss official got to the core of the issue by explaining that low tax rates are not a subsidy and Switzerland would not raise corporate taxes to satisfy the tax hungry EU.
Three years ago the big EU anti-Swiss campaign was a demand that banking secrecy, written into Swiss law in 1934, be abolished. The French and German governments even went so far as to call for a financial boycott of Switzerland unless they surrendered on bank secrecy. The Swiss said “no” and they meant it. When they finally agreed to collect taxes under the “EU tax directive,” it was without revealing the names of any foreign person with a Swiss bank account. The EU’s own members, Austria, Belgium and Luxembourg, supported Switzerland’s stance by taking the same position in defense of their own bank secrecy laws.
Truth be told, Switzerland has resisted, valiantly, pressures that other, less resolute nations, could never have withstood. Much of that owes to the nature and independence of the modern day descendants of the original Helvetian tribes – and their inherited financial DNA. But another, and a most important reason, is that Switzerland controls trillions of dollars, euros, Swiss francs – probably more than one third of all the world’s assets – and money does more than talk. Quietly and successfully that kind of wealth can and does resist the likes of EU bureaucrats.
I can predict with confidence that the Swiss forfeit tax deal will not be repealed and Swiss corporate taxes will not be revised to satisfy the EU. The important point here is the unyielding determination of the Swiss not to be dictated to by the EU Brussels bureaucrats. For years they have stood by their guns under a barrage of attacks from the EU, the OECD and other assorted leftists. That says something about the Swiss, and about both the nation’s past and future as an asset protection and offshore financial haven. We continue to rank Switzerland as the world’s foremost all-around financial haven.Link here.
U.K. SPEED CAMERA WRECKED FOR A 6TH TIME
Britain’s most vandalized speed camera has been wrecked for a SIXTH time. The hated machine had only been back in action for a week when it was targeted again and torched. In three years the device near Bristol, has been set alight four times, knocked down, and rammed. Each time it costs £30,000 to replace. The boss of Motorists Against Detection claimed responsibility.
Nicknamed Captain Gatso, he said, “We have repeatedly targeted this stretch and this one has been taken out more than any other. Police claim the camera is for safety – but we say 30 m.p.h. is too fast with lots of children around. But at 3 a.m. motorists should be able to do up to 60 m.p.h. We have 200 members and we’re terrorizing these cash machines.”
The group claims to have destroyed more than 1,000 cameras.Link here.
THE OFFSHORE MYTH
The general misconception is that anyone who moves money offshore is a criminal, as the headlines about money laundering with offshore havens would lead one to conclude. Since the majority of people receive their news in 30-second blips or from short 30–word news articles like the one on MSNB’s website, most will probably never take the time to research the true benefits of offshore assets protection, worldwide business formation and international investing.
It is the position of the IRS that you may take any and every legal means – and are encouraged to do so – to pay the absolute least tax due. There are many articles on the IRS website, showing that the same legal structures that are employed for asset protection and estate planning can also be used to avoid overpaying taxes. The site also shows that there are legal methods to invest capital in foreign jurisdictions which can create less of a tax burden and at the same time create a sound, secure financial portfolio.
An article entitled “The Dirty Dozen” appears on the IRS website. Number one in the dirty dozen is “misuse of trusts”, and number four is “Offshore Transactions”. If you do not read exactly what they are talking about you may erroneously conclude that any offshore transaction is illegal and that private trusts are instruments to defraud the government. Nothing could be further from the truth. George W. Bush has offshore trusts set up in the Cayman Islands for his two daughters. This is disclosed in his financial disclosures papers required for his running for the office of president.Link here.
I LOVE PANAMA
When I first decided I wanted to visit Panama, I was sitting on an Amtrak train heading to New York City and the baby next to me had just puked on my leg. He was propped up against his mother’s shoulder and was looking at me with a crooked smile – a look, that I now realize was meant to say I know something you don’t. I turned to pull out my Mickey Mouse pen when, with all the stealth and slyness of a fox, the devil baby made a muted gurgling sound, which led to this miserable cascading gush of Gerber yellows and greens. The Panama guidebook that I was reading was also damaged in the incident and to this day, I have no way of finding a decent restaurant in the Cocle Province.
Panama has been good to me over the past year. I came down to Central America as a young, seemingly knowledge-less kid from Jersey, who wanted to do anything but “work”. The 9 to 5 job was something I had nightmares about. I did not think I could handle the terror of that sort of job and there was certainly no decent company in the States who would want to hire someone with a fear of filing cabinets.
I am nothing by trade. After a great stint in Costa Rica, I tagged Panama as my next victim, following the advice of many friends and my tendencies to migrate towards the equator. I moved down with the intention of making some money, meeting new people, and most of all, having some fun. The opportunities that have presented themselves to me, from the second I landed in Panama, have been overwhelming. Take for example, the baggage carrousel in PTY that broke while I was waiting for my suitcase: “I know how to fix it” I told one of the men. Bam. Job opportunity numero uno.
The immigration laws in Panama are relatively strict and make starting a business for a gringo like myself a bit tricky. Every new business must have a Panamanian owner. A foreigner must provide a new skill that a Panamanian is not capable of performing. Though I only picked up a tourist visa, allowing me 90 days in the country, I wanted to be a citizen the second I met Panama City. In my first few weeks I gave myself a crash course in the country.
First thing that hit me? The low cost of living. In all my travels, I had never before stumbled upon a $.25 beer or a $3 replica soccer jersey. My apartment rents at $200 a month and the meals I eat cost no more than a Gatorade. I am now of the firm belief, that when you are paying less for living you have less guilt and less worries. This was what I was in search of – forgetting the debts, the fears and the exorbitant cost of living that are so common at home. I consult for several tourism and real estate companies now and have been enjoying watching Panama grow almost every day.
They are preparing to expand the canal – a subject that has its supporters and its opponents – which could be good or bad for the country. Donald Trump is stamping his name on a waterfront project. Things seem to be going well for Panama and I intend to explore every nook of this country before the real crowds hit. Every nook except the Cocle restaurant scene that is.Link here.
NO WAY IN – NO WAY OUT
I have no desire to get embroiled in the current tangled debate on immigration, either legal or illegal. However, I have watched with interest the intense campaign for President Bush first to intervene in the trial of two border patrol agents accused of shooting a suspected Mexican drug dealer as he fled, and then to pardon the agents for the crime after they were convicted. The agents, Ignacio Ramos and Jose Alonso Compean, entered prison last week amid shrieks of injustice. They were convicted not only of shooting Osvaldo Aldrete, who was unarmed and running away, but of destroying evidence, covering up a crime scene and filing false reports concerning the circumstances.
Right-wing pundits and politicians on both sides of the aisle seeking political gain are clamoring for Bush to pardon Ramos and Compean for their “act of courage” and to ignore the laws they broke and the crimes they committed. It seems likely the emotions over illegal immigration will get uglier and more intense if this administration continues to nod and wink at securing the border between the U.S. and Mexico. If there is a policy other than to give no-bid contracts to Halliburton to build a network of detention camps where immigrants will be held indefinitely, I am not aware of it. I find it difficult to believe that these camps are cheaper and more humane than simply closing the border to illegal entry.
Those who cry that the border between Mexico and the U.S. stretches for 2,000 miles and is all but impossible to control apparently are unaware of the new passport requirements that have gone into effect. Air travelers going to or from the U.S., Canada, Mexico, the Carribbean and Bermuda must have passports. Those who have no problem with them coming for air travelers should know that as early as January 2008, they are coming back for the rest of us. According to just the basics, “All persons – including U.S. citizens – traveling between the U.S. and Canada, Mexico, Central and South America, the Caribbean, and Bermuda by land or sea (including ferries), may be required to present a valid passport or other documents as determined by the Department of Homeland Security.”
Americans who cherish freedom would do well to stop stumbling around in the trees and forests of the illegal immigration debate and see that the Bush administration is well on its way to closing the borders of the entire nation, not only to people trying to get in, but to citizens trying to get out. For the millions who do not travel, it is probably no big deal – they long for the tranquility of servitude and do not recognize shouts coming from the rest of us as a desperate rattling of chains. Unfortunately, securing the homeland is a two-edged sword that the Bush administration and military establishment profiteers are holding firmly over our heads. It is time Americans realized that we are in danger of being herded into a national detention camp in which there are no pardons, and from which there is no escape.Link here.
HEDGE FUNDS FLEE VIRGIN ISLANDS, HOUNDED BY IRS
At the Deep End Bar, a poolside grill in St. Croix, a handful of money managers and investors sip rum from a local distillery and reach for complimentary bug repellent as dusk brings out the no-see-ums. Warren Mosler, who opened a hedge fund firm in St. Croix five years ago, is having what has become the usual conversation with people who were lured to the U.S. Virgin Islands in 2001 by the prospect of legally cutting their tax bill by 90%. Almost half of the 49 funds that set up shop in the islands have fled in the past two years.
Mosler complains that hedge funds were chased away by federal tax law changes and an IRS that says it suspects rampant fraud by those that signed up for the tax incentive. “It’s kind of like what happens to a community when a big company or an army base pulls out but on a smaller scale,” says Mosler, a founding member and manager of the III Funds, which manages $3.5 billion. He now advises the fund in Christiansted, one of two Danish colonial settlements on St. Croix. He is surveying the sparse happy-hour crowd. “Unfortunately, the fear is causing a case of running away from the police when you are not guilty,” he says.
Mosler, 57, and two other hedge fund managers bought and renovated the Tamarind Reef Hotel four years ago in anticipation of an influx of Wall Street money managers to the island, which is 1,100 miles southeast of Miami. The boom never came. Instead, the U.S. Treasury Department and U.S. Senator Charles Grassley of Iowa, the Republican chairman of the Senate Finance Committee from 2001 to 2006, knocked it out with a combination punch of regulation and legislation, Mosler says.
The U.S. government became alarmed in 2003 when someone sent the Treasury Department an anonymous letter that included marketing materials advertising the territory’s economic program as a tax dodge, Grassley says. “Before our reforms, we had people living in the United States and claiming Virgin Islands residency to dodge their federal income taxes,” Grassley says. “It took a long time to corral that horse and put it in the barn.” That sales pitch was followed by the conviction of a Massachusetts life insurance executive in February 2004 on tax evasion charges in St. Croix. The events prompted Grassley to conclude the Treasury Department was not acting swiftly enough to combat fraud. The insurance executive had claimed tax benefits without living in the territory.
The fund managers who remain say they face a fight with tax examiners, who are using a new IRS form that requires details about their lives – where they own a home, where their children attend school, where their cars are registered, where they attend religious services and what civic associations they have joined. The Grassley legislation imposed a 6-month residency requirement and clarified that the territory’s tax benefits apply only to income earned exclusively in the islands. U.S.V.I. officials have been waiting for two years for specific guidance on its tax program from the U.S. Treasury Department. Since the new law was adopted, 23 of the 49 hedge funds have either halted their activities temporarily or withdrawn from the islands.
“Treasury essentially treated the possessions with benign neglect, perhaps too much so in hindsight,” says Carl Dubert, who was deputy international tax counsel at the Treasury Department from 2002 to 2004 is now a senior manager at PricewaterhouseCoopers. “The issue is, you have to sell your house in Greenwich or the Hamptons or whatever and actually move down there. As long as you do it right and you actually have your business down there, it works.”
The territorial government designed the tax breaks to attract new industries in a bid to broaden an economy dependent on tourism, which accounts for 60% of the islands’ companies. The three principal U.S. Virgin Islands – St. Croix, St. John and St. Thomas – have a population of 108,605. Per capita income in the territory is $18,652, less than half the average in the continental U.S. and $7,000 less than in Mississippi, the poorest state. The islands, especially St. Croix, have struggled to recover from Hurricane Hugo in 1989. Hugo and Hurricane Marilyn in 1995 decimated thousands of St. Croix houses, as well as resorts, many of which have never been rebuilt.
To qualify for the tax incentives, firms must invest at least $100,000 in the territory, buy products such as office supplies and computers in the U.S.V.I., contribute to area charities and hire at least 10 people, 80% of whom must be natives of the islands. Company owners must live in the U.S.V.I. for at least half of the year, under federal requirements. They have to undergo five examinations a year by the Economic Development Authority. Michael Masters, principal at and founder of hedge fund firm Masters Capital Management LLC, says the 2004 law and the IRS clampdown have had a chilling effect. “Witch hunts aren’t good for anybody, including the government,” he says. “It’s a waste of resources.”Link here.
With no federal oversight, the states are helping to shelter crooks, money launderers and, possibly, terrorists.
Shawqi Omar has been cooling his heels in a U.S. military brig in Iraq since he was arrested in Baghdad in October 2004. The 44-year-old Kuwaiti native with American and Jordanian citizenship was charged with being part of an aborted plot to mount a chemical attack on the Jordanian intelligence agency. The FBI has also taken an interest. Five of Omar’s relatives have been charged with using U.S. shell companies in Utah and California to commit bank fraud and money laundering and possibly to fund terrorist activities in the Middle East. One defendant has copped a plea to accusations of fraud and money laundering and awaits sentencing. Three others have pleaded not guilty, and one was dismissed for medical reasons. “The fact that U.S. shell corporations can be used to commit criminal activity is increasingly a major weakness in our system,” says Gregory Bretzing, supervisor of the FBI’s joint terrorism task force in Salt Lake City.
Once ideal vehicles for tax evasion, shell companies – corporations with no operations, no employees and no physical assets – have lately become shelters for far more nefarious criminal activities, says Stuart Nash, an associate deputy attorney general at the Justice Department. Crooks benefit in several ways. A U.S. company address lends credibility in global trade and painless access to American bank accounts. And thanks to loose laws of incorporation in many states, it is easy for offenders to remain anonymous – and to elude the authorities. Unlike publicly held companies, private entities are not obliged to reveal ownership. And without such information the police come to a dead end, unless they can tease the information they need out of bank records.
How widespread is the problem? No one really knows for sure because the states “have no idea who is behind the companies they have incorporated,” says Senator Carl Levin (D – Michigan), who is trying to force the states to insist on greater transparency. The Financial Crimes Enforcement Network, the U.S. Treasury bureau investigating money laundering, says roughly $14 billion worth of suspicious transactions involving private U.S. shells and overseas bank accounts came in from banks from 2004 to 2005, the latest data available. Now, estimates the FBI, anonymously held U.S. shell companies have laundered $36 billion to date just from the former Soviet Union.
State governments provide plenty of cover for bad guys. Every year they incorporate 1.9 million or so private companies, but no state verifies or records the identities of owners, much less screens ownership information against criminal watch lists, according to a study by the Government Accountability Office. In many cases the documents of incorporation require only a company name, an address where official notices can be sent and the names and signatures of folks handling the paperwork – not of the owner or controlling shareholder. You can submit the forms in person, by mail or, increasingly, via the Web in a process that takes from 5 minutes to 60 days, depending on the state. The median fee is $95. A network of registration agents here and abroad help set up a vast number of shells each year. Once the minimal work is complete, the corporation, a perfectly legal entity, can conduct business and, in many cases, open a bank account. Why doesn’t Delaware crack down on anonymous incorporation? The crooks would just take their business to Nevada. Also note that chartering out-of-state corporations is a big industry in an itty-bitty state.
Given the paucity of information, nailing criminals means relying on bank records. That is what happened in the Omar case. Sometimes it us a foreign investigator who gets stonewalled. They almost always came away empty-handed. The situation has made a mockery of American demands that other nations do more to stop financial crimes.
Incorporation agents are not shy about promoting the privacy offered by U.S. laws. Atrium Incorporators of London promotes Delaware on its Web site as “an offshore tax haven for non-U.S. residents.” Advantages? “Owners’ names are not disclosed to the state," and "the company is not required to report any assets.” Another Web site, corp95.com, promises that for as little as $69, plus filing fees, it can set up a corporation in Nevada, which “may provide for anonymous ownership and bearer shares.” The site also offers “shelf” corporations, already incorporated businesses that have sat dormant but have some operating history.
“The systemic vulnerability we face in the United States from shell companies can only be addressed by Congress through legislation to specifically regulate shell companies,” says Dennis M. Lormel, senior vice president of Corporate Risk International and former chief of the financial crimes section in the FBI. If the states do not fix the problem themselves, Senator Levin says he will have to introduce legislation seeking a uniform standard. His solution would require states to force owners of companies they incorporate to disclose the owners’ names on state incorporation forms. But there seems to be little urgency among his peers.Link here.
FOUNDATIONS OF VERTICAL POWER SYSTEMS CONTINUE TO CRUMBLE
Hardly a day passes without some people-pusher emerging to propose yet another intrusion upon the liberties of people to control their own lives. Such statist programs have elicited the expected responses from rational minds – they intrude upon matters which, whether one approves of the targeted actions or not, are best left to the determination of individuals or families. That these efforts violate the free speech, liberties, and/or property rights of people – interests that government officials took an oath to defend but now scurry to violate in the most detailed manners – is beyond question. But there is a deeper meaning to these intrusions that is overlooked, the implications of which portend the continuing collapse of vertically-structured institutional systems.Link here.
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