U.S. Politics

[Miamipuck]

If that debt is to american citizens who were forced to bring their taxable wealth back here, it would a start.  I said it was a radical idea, but for now, until we balance the budget, it seems like a better idea.  Interest on the bonds could be taxable when they cash out I suppose.

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I think you have this crabbed bro. There are plenty of tax shelters in the US. Look up the South Dakota Trust company, for instance. Yes, the Dakota's are a huge tax haven for wealthy families. Just rent a fake storefront in bumfuck South Dakota and bingo bammo, you have a tax shelter trust all ready to go.

Hardly any US citizens have offshore accounts to hide any longer. The days of the numbered Swiss account and bearer bonds are long over. There's reciprocation and such with financial info now. The big detriment to offshore tax cheating is, whistle blowers can get 20% plus for the back tax collected by the IRS. For instance, the guy that blew the whistle on UBS tax shelters (look it up) made upwards of 20-25 million dollars. I think the guy, a UBS Swiss banker, set them up, blew them up when the IRS came sniffing around, testified, went to jail for a little bit, and profited........( I may have the details a little messed up but it did happen almost like this)

 The government made offshore tax shelters highly illegal. I know from my days as an FA that people that got caught, had their multi million dollar accounts become single digit accounts, through the back tax and immense penalties and that's not taking into account the prison time.

[Fenwyr]

So you're saying that instead of re-investing their profits, they should lend the profits to the US government so that it can fund infrastructure projects? I'm not entirely sure what you're talking about.

I'm trying to find a middle ground.  Money stowed in the Caymans and Cyprus does us no good.  If we shut that down, I would like to provide a domestic tax shelter, which is why I said they could buy bonds pre tax up to a certain amount.  Its essentially forced investment into the US economy.  It wasn't like they were reinvesting those profits anyway.  They are currently hiding them offshore.

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[Fenwyr]

I think you have this crabbed bro. There are plenty of tax shelters in the US. Look up the South Dakota Trust company, for instance. Yes, the Dakota's are a huge tax haven for wealthy families. Just rent a fake storefront in bumfuck South Dakota and bingo bammo, you have a tax shelter trust all ready to go.

Hardly any US citizens have offshore accounts to hide any longer. The days of the numbered Swiss account and bearer bonds are long over. There's reciprocation and such with financial info now and whistle blowers can get 20% plus for the back tax collected by the IRS. For instance, the guy that blew the whistle on UBS tax shelters (look it up) made upwards of 20-25 million dollars.

 The government made offshore tax shelters highly illegal. I know from my days as an FA that people that got caught, had their multi million dollar accounts become single digit accounts, through the back tax and immense penalties and that's not taking into account the prison time.

You sound more knowledgeable than me on this, so I will take your word on it.  It's just that in the past election cycle, everyone from Bernie to Trump were talking about repatriation of money.  What am I missing?

Why not create an option better than illegally, or even dubiously, sheltering money?

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[Tommy]

I'm trying to find a middle ground.  Money stowed in the Caymans and Cyprus does us no good.  If we shut that down, I would like to provide a domestic tax shelter, which is why I said they could buy bonds pre tax up to a certain amount.  Its essentially forced investment into the US economy.  It wasn't like they were reinvesting those profits anyway.  They are currently hiding them offshore.

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But companies already do that to a large extent. It's the job of a firm's CFO and Treasurers to find ways to re-invest cash they're sitting on, but usually short term investments. This includes equities (which directly benefits the U.S economy), strategic investments (which directly benefits the U.S economy), and sometimes short term low-yield bonds, but nothing risky. Forcing them to invest all their money in low yield U.S T-bills isn't something their shareholders would appreciate.

[Fenwyr]

I have to disagree with you on this. Relying on the government to stimulate the economy is relying on tbe government to stimulate the economy. Whether it's on defense spending, infrastructure, union jobs, teaching and education, college, energy, etc. You can make the argument that it will have a far reaching and compounding effect on the economy, in a multitude of ways.

I think decisions regarding military spending should be based on "maximizing value", as well as what is actually necessary to strengthen our standing/safety in the world . This whole argument about military spending being about the economy is bullshit, and sounds like a left wing nut job who thinks only the government can save us kind of argument.

(and yes of course military spending will have economic consequences, all spending will)

You are spot on, other than one massive error.

The military being about the economy and only the government can save you (from a military standpoint) is about as far from left wing as you can get.

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[Fenwyr]

But companies already do that to a large extent. It's the job of a firm's CFO and Treasurers to find ways to re-invest cash they're sitting on, but usually short term investments. This includes equities (which directly benefits the U.S economy), strategic investments (which directly benefits the U.S economy), and sometimes short term low-yield bonds, but nothing risky. Forcing them to invest all their money in low yield U.S T-bills isn't something their shareholders would appreciate.

I'm specifically talking about money they are not reinvesting and putting in shelters to avoid paying taxes.  Fine, don't pay taxes on it.  But keep it here so we can fix pur roads and bridges.  How is that not a win win?

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[Miamipuck]

You sound more knowledgeable than me on this, so I will take your word on it.  It's just that in the past election cycle, everyone from Bernie to Trump were talking about repatriation of money.  What am I missing?

Why not create an option better than illegally, or even dubiously, sheltering money?

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Oh my bad I know exactly what you're misunderstanding is you're confusing the individual/families and the corporation.

 Offshore tax havens and loopholes are now the territory of the corporation. A dollar earned offshore, kept offshore is taxed where the profit originated. If it's brought back onshore it's taxed at the much higher US rate. So it behooves the large mutlinationals or any multinational to keep their cash off shore.

The US (IRS) has really cracked down on individuals keeping their money offshore. They have even convinced the Swiss to abolish their centuries old policies of secrecy. A decade ago the large CPA firms tried to woo the wealthy with offshore tax shelter trusts. The IRS declared them illegal and walloped a ton of families with gigantic tax/penalty bills that destroyed most of it not all of the money they tried to shelter in the first place. It was a back and forth of immense law suits and such.

That's where the onshore tax shelters and tax havens grew legs. If you're a wealthy family all you have to do is rent a fake store front in South Dakota for a few bucks and you can start a tax shelter trust, GRITS/Grats etc. etc.

There are many articles proclaiming the US one of the biggest tax shelter countries in the world. Believe it or not we are one of if not the best places for wealthy individuals (families) everywhere to hide their money from the taxman.......weird but true.


If you're a huge hedge fund guy, then it gets way way more complex. A lot of them hide their money in Bermuda insurance companies, I am not really up on why. Suffice to say it's very beneficial tax wise. I think that falls under the corporate tax haven though.

Also hedge fund guys can designate their profits as Capital gains, lowering their effective tax bracket from 39.6 to 20% (it used to be 15).

So there's lots of stuff.

[Tommy]

Yeah, I had to use my social security number to open a bank account in HK. Back in the day it wasn't required, and people would work and just claim that they made nothing, thus pay no federal taxes.

[Miamipuck]

You sound more knowledgeable than me on this, so I will take your word on it.  It's just that in the past election cycle, everyone from Bernie to Trump were talking about repatriation of money.  What am I missing?

Why not create an option better than illegally, or even dubiously, sheltering money?

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I don't want to come off as an expert, I have been out of that side of the business for a long long time. I am sure there are many different techniques to shelter money from taxes that came after I left that side of finance. I was just going off of memory.

 However, I am pretty certain the days of US citizens keeping their money in a Swiss bank or the Caymans is for now, largely dead. There's too much risk and not enough reward. Of course, that doesn't preclude people that are downright stupid and like to push their luck.

[Miamipuck]

Yeah, I had to use my social security number to open a bank account in HK. Back in the day it wasn't required, and people would work and just claim that they made nothing, thus pay no federal taxes.

Yeah man I used to hide online poker winnings through Netteller, an offshore bank. God forbid if I tried that excrement now. I would be in the poor house with all the money I was making back then because of the penalties. At one time, I was able to directly deposit the winning into my brokerage account. lol

[Tommy]

Yeah man I used to hide online poker winnings through Netteller, an offshore bank. God forbid if I tried that excrement now. I would be in the poor house with all the money I was making back then because of the penalties. At one time, I was able to directly deposit the winning into my brokerage account. lol

If anything the Chinese are the ones who hide their assets overseas, which is why they buy properties all over the world. They're just piggy banks for them.

[Miamipuck]

If anything the Chinese are the ones who hide their assets overseas, which is why they buy properties all over the world. They're just piggy banks for them.

South Americans as well. Brazialians bid up Miami real estate like no tomorrow just a couple of years ago. They bought everything in site before their economy collapsed. Wealthy Venezuelans and Argentinians as well.

[Fenwyr]

If it could be made reasonably less annoying, because all of this cloak and dagger excrement sounds exausting, wouldn't it just be easier to invest in US bonds pre tax?  Keep the money here, possibly stop selling bonds to foreign countries, build some roads, create some jobs.

I know it seems too simplistic, but I think it would be better than the current situation.

As a CEO, would you rather have an entire team of accountants trying to hide profits, or a couple of guys deciding how much to reinvest in the company, and how much to invest in the country, legally avoiding taxes.

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[Fenwyr]

If anything the Chinese are the ones who hide their assets overseas, which is why they buy properties all over the world. They're just piggy banks for them.

Man, and I may take some heat on this, but I would drop the hammer on non US citizens buying up our land.  You want to buy a vacation home, fine.  You want to rent it out, you are paying a hefty tax.  You want on office building in Manhattan?  Good luck with that.

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[Tommy]

If it could be made reasonably less annoying, because all of this cloak and dagger excrement sounds exausting, wouldn't it just be easier to invest in US bonds pre tax?  Keep the money here, possibly stop selling bonds to foreign countries, build some roads, create some jobs.

I know it seems too simplistic, but I think it would be better than the current situation.

As a CEO, would you rather have an entire team of accountants trying to hide profits, or a couple of guys deciding how much to reinvest in the company, and how much to invest in the country, legally avoiding taxes.

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U.S bonds have very low yields, so even if they don't become taxable, I highly doubt it'll increase the percentage of a company's portfolio is allocated to them. And I don't know what you mean buy "selling to foreign governments". We don't have control over who buys bonds - they're traded on the open market. And the vast majority of holders of U.S debt are U.S investors. Foreign governments make up a fraction. Besides, why does it matter who's buying the bonds?