US Gov starting capital controls–

Home Forums Costa Rica Living Forum US Gov starting capital controls–

Viewing 15 posts - 76 through 90 (of 119 total)
  • Author
    Posts
  • #173343
    ticorealtor
    Member

    I think at this moment… we don’t need to go into depth (for security reasons) but the issue is that we as Americans need to understand that if you are planning to do anything under the radar remember that the U.S. has a long arm.

    #173344
    Andrew
    Keymaster

    This is interesting …

    The United States Government Does Not Want You to Move to Panama

    Actually, the U.S. government doesn’t care whether you decide to move to Panama or not, they just don’t want you to take your money.

    Most of the people I meet who are looking for a home or property in Panama just want to live comfortably in a beautiful environment at a reasonable cost. For many, Boquete is the perfect choice. Mild weather, magnificent scenery, great community and most, if not everything, they need to live a cozy day to day existence. I can safely say that the average couple living in my project, Hacienda Los Molinos, spends less than $2,000 a month in total living expenses. That’s everything – car, health and home insurance, food, gas, entertainment (we go out a lot!), utilities, cable TV, Internet. You name it, the whole enchilada. Did I mention very low or no property taxes?

    This simple formula, low living costs and quality lifestyle, was the reason that Boquete became one of the most desirable retirement destinations in Latin America.

    But what if I told you that the price of real estate in Boquete was likely to increase as much as 30% in the next two years or so? A home that costs $250,000 today could be as much as $350,000 in that short period of time. A $150,000 condo could cost $215,000 or more. In today’s market that sounds absurd. But this is a real possibility…… if you happen to be a U.S. citizen.

    You see, the United States Treasury is concerned about money leaving the country. Money that they’re going to need to pay their bills. The Federal government is running an operating budget deficit of over a trillion dollars this year and, by their own admission, this level of deficit spending is projected to continue for several years in the future. In order to service this unfathomable debt they’re going to need to do one of two things – drastically cut spending on defense and entitlement programs or significantly raise taxes. Which way do you think they’ll go?

    My bet is that they will raise taxes and it’s not unthinkable to believe that the total tax burden for high income workers (the definition of which keeps changing all the time) will reach a combined total of 60% to 70% when you include state, local and federal taxes. Think about that – 60 to 70 cents of every dollar you earn will go to the government, with much of it being spent to cover the debt. And the state and local governments are in even worse shape. I project that we will see increases in income taxes, capital gains taxes, payroll taxes, Medicare withholding, property taxes, sales taxes, death taxes, increased fees for services, all types of licenses and taxes we can’t even conceive of yet. If a state, local or the federal government can squeeze a nickel out of you, they most certainly will.

    In an environment like this, more than a few people will stop voting at the ballot box and start voting with their feet. They will begin leaving the country with as many assets as they can and go somewhere where they can live their lives in comfort without watching everything they’ve worked for, everything they sacrificed for, get taken away in taxes or eaten up by inflation.

    The federal government is aware of this real possibility. So aware, in fact, that they’ve been methodically preparing for this potential exodus of money for the past two years.

    On June 17th, 2008 the Heroes Earnings Assistance and Relief Tax Act of 2008 (H.R. 6081), also known as the Heart Act,was unanimously passed by Congress and signed into law by the President (a Republican no less). This piece of legislation was very well intended. It provided much needed tax relief for the men and woman of our military who are sacrificing their time and their lives for our country. But this bill also contained some language that targeted a very different group – expats who, for whatever reason, decided to give up their U.S. citizenship. The bill provides for withholding taxes of up to 30% on certain assets held by the expat as well as assessing the value of the property of the expat 24 hours prior to the renouncing of their citizenship and taxing them at the total value of those assets. Keep in mind; only around 600 Americans renounce their citizenship each year, so the expected revenue from this small group is really limited. More important are the procedures and policies established by this bill that can be modeled into future legislation.

    Okay, so this bill is not a big deal. Few people actually give up their U.S. citizenship and it’s not likely to directly affect you. What’s more, if someone decides to give up their citizenship, who really cares how much they’re taxed? But it does establish some policies, procedures and tax rates for individuals who decide to live offshore. Policies, procedures and tax rates that very well could affect you in the future.

    As a follow up to the Heart Act of 2008 we have the Hiring Incentives to Restore Employment Act (H.R. 2487) commonly known as the HIRE Act (don’t you just love these names?). This is the jobs incentive bill that was signed by the President on March 21st amid little fanfare. In a congressional bill of 47 pages, presumably written to address the unemployment situation in the U.S., 21 pages are devoted to the treatment of foreign bank accounts and other offshore investment vehicles held or controlled by U.S. citizens. But I thought U.S. citizens were already required by law to disclose their overseas accounts to the IRS, so why do we need this legislation? Well, yes they are. But this law goes a bit farther in that it requires foreign financial and non-financial firms to report accounts held by American citizens to the U.S. Treasury. So, in effect, the United States Congress has passed a law that requires a foreign firm, located in a foreign country, to disclose account information held by a U.S. citizen (including name, address, tax ID number, account number, account balance, and flows of funds into and out of the account) to the United States Treasury on their demand. Now, that takes some nerve. What if the country where the financial firm is located has laws against disclosing this information? In that case, the law requires the financial firm to obtain a signed waiver from the account holder authorizing the firm to disclose the information. If they don’t sign the waiver, the financial firm is required to close the account. I spoke to an attorney friend of mine who told me that his firm is no longer accepting U.S. clients because they don’t want to be harassed by the IRS. Because of this law, foreign banks are likely to close accounts held by Americans due to the bookkeeping hassle or the potential liability posed by the U.S. account holder. The fact that banks and law firms will no longer want to work with U.S. citizens is an unintended consequence of this legislation. Or was that the real intended purpose?

    Despite these two laws, the U.S. Treasury knows that a determined citizen, driven by the fear of increasing taxes and confiscation, will find ways to keep their privacy and their assets away from the long reach of the U.S. government. In fact, the Hire Act even has a name for these non compliant citizens – recalcitrant tax payers. And this is where I think a third piece of legislation will fill the gap.

    It’s my belief, based on the actions already taken by the U.S. government, that an exit tax will be instituted to capture money at the source (your U.S. bank), before it leaves the country. I believe that this exit tax will apply only to certain specified transaction (since senators, congressmen and their wealthy patrons will still need to get their money out of the country). Further, I think this tax rate will be in the 30% range (remember the Heart Act and the withholding requirements of the Hire Act?) and will be withheld by your bank and remitted to the U.S. Treasury at the time you make a transfer to a foreign entity. Like the provisions inserted into the Heart Act and the Hire Act, this exit tax will likely make its way into some well meaning piece of legislation, inconspicuously inserted in the arcane language of the bill and will become the law of the land. Most Americans will not even know the law exists and many of those that do understand won’t object because it will not have any impact on their lives.

    And this, my friends, is how the $250,000 house in Panama suddenly costs $357,000 and the $150,000 condo will take $215,000 of your hard earned cash to buy.

    If you are thinking about moving to Panama (or any foreign country) or investing overseas, the window of opportunity is getter smaller and smaller. Although I don’t believe the U.S. government will ever prohibit you from leaving the country, I’m convinced that they will make it increasingly difficult to get your money out without a punitive tax.

    Perhaps I’m wrong. Maybe I’m misreading the situation and the U.S. government isn’t concerned about the flows of funds overseas for the average citizen. And maybe this current financial crisis is just a bump in the road and the economy of the United States will start growing enough to cover the debts that are piling up without huge tax increases. Maybe.

    But try this mental exercise – Let’s say you believe the scenario I’ve described is a real possibility and you decide to act by moving some of your assets overseas, buying a house and creating a “Plan B” lifestyle for you and your family. And then none of the currency restrictions predicted happen, the U.S. economy springs back to life, the government institutes favorable tax policies to encourage investment and growth and money making opportunities abound. What’s the worse thing that can happen? You can always move your assets back to the U.S.. I’m certain that you’ll never see restrictions on money moving into the country.

    But what if I’m right? What if the economy continues to sputter? What if unfunded liabilities like Medicare, Social Security or the new health care plan continue to expand the federal debt causing the economy to stagnate, forcing increases in tax rates and placing restrictions on the flow of capital overseas? If you’ve chosen not to take action, what options are left for you and your family and at what cost?

    Freedom means having the ability to make choices. I believe there’s still time to make choices but the clock is winding down.

    If you’re prepared to act on what you see happening around you and you’d like to discuss specific strategies for creating a wonderful lifestyle for you and your family here in Panama, I’d be happy to discuss them in detail with you.

    Good luck and God bless.

    Paul McBride
    General Manager
    Hacienda Los Molinos, Boquete Panama

    #173345
    gzeniou
    Member

    Perhaps this could be seen as a scare technique by Paul to get Americans to buy in. On the other hand, I have to agree with a lot of what he is saying including the tax rate of 60-70%. But I do think that there will be some kind of loop hole some where, The rich corporate holders want to invest outside the US just as much as we do and have course they write the laws.

    However this also brings up some interesting questions for those of us that already own property in central America.

    Are we going to get hit by a 30% tax if we sell the current property we own and buy another in the same foreign country?

    In theory, if the IRS wants to know about our assets at some point they may want to know about our Real Estate holdings are they going to put a tax on those. Such as a luxury tax or something every year?

    It just seems to be very unclear at the moment about what the future will bring.

    In any event, with inflation being low and interest rates extremely low, it doesn’t hurt to slowly transfer money (less then $10,000) into CR every time you or a family member flies in. Just put your doe in a secure place and not open or have a bank account in CR with more then $10,000. This way you can have for example a $100,000 in a safety deposit box without the IRS every knowing. Another possibility is bring in $10,000 worth of gold each time, and just covert a little bit at a time when you need it. As gold should hold its value with inflation. I myself don’t know much about Gold but will look more into it.

    I don’t believe that any of the above suggested is illegal or against the IRS tax code. There are probably many that don’t trust the banking system etc. in the US that simply just put their money “under their mattress”, they don’t earn anything on it. (what is the real earnings anyway? typical money markets in the US gets you 1.0% but after the IRS gets its share, is it worth it?). This is doing the same thing just in another country. The main reason we stash our money in a secure place is not to avoid any tax, its because we feel more comfortable with securing our own money then having it secured in a bank.
    8)

    #173346
    twinzor1
    Member

    Removed

    #173347
    sprite
    Member

    Capital Control, as far as I can tell, is not aimed at the little guy. It is aimed at the high rollers, the people and corporations that drove the US into the ditch. And just as a general principal, I always like to see the government stick it to them. People who have gotten into trouble with the IRS owing very large sums of money in unpaid taxes or hidden wealth to avoid taxes get no sympathy from me. They are the greedy rich trying to get richer, trying to join that top 2 percent of the US population which controls over 50% of the nation’s wealth.
    They cry the loudest against socialism because they have the most to lose under a system which attempts to fairly spread the costs and rewards generated by a society. They are the ones who manage to exploit fellow citizens in an unregulated economic system.

    #173348
    maravilla
    Member

    that’s pretty much the definition of capitalism — in order for those people to have so much someone else has to have nothing. the basic premise of capitalism is evil as it is about exploitation. there is nothing human, or humane, about it. (ducking now as the bricks fly by)

    #173349
    kimball
    Member

    Are you two going to hog that whole doob 🙂

    #173350
    maravilla
    Member

    Don’t bogart that joint, my friend, pass it over to me —
    imagine, that song was written in less than 60 seconds according to my pal Larry who wrote it. Why do you think we’re all smoking wacky weed? It’s Bunny Day!! Have a good one.

    #173351
    clayton
    Member

    “Who Let The Dogs Out” another song for all you society sucking progressives.

    #173352
    edlreed
    Member

    [quote=”clayton”]”Who Let The Dogs Out” another song for all you society sucking progressives.[/quote]

    And the opposite of progressive is…???

    Let me know when I get something of yours, ‘eh, blinders.

    #173353
    clayton
    Member

    If you are advocating taking more of my tax dollars to support some fantasy of yours then my eyes are wide open.

    #173354
    edlreed
    Member

    [quote=”clayton”]If you are advocating taking more of my tax dollars to support some fantasy of yours then my eyes are wide open.[/quote]

    I advocated something? Just two questions, neither of which you addressed (as usual). Invective and rudeness dominate your intellect.

    #173355
    clayton
    Member

    Figure out which side if the tape you are on and if you need to look it up please do so we’ll wait. The statement answered your second question and it was directed at the string preceding my first. You are so astute. Talk about being ugly and the string has long since left any intellect, glad you joined in

    #173356
    edlreed
    Member

    [quote=”clayton”]Figure out which side if the tape you are on and if you need to look it up please do so we’ll wait. The statement answered your second question and it was directed at the string preceding my first. You are so astute. Talk about being ugly and the string has long since left any intellect, glad you joined in[/quote]

    So, there are TWO sides, yours and…?? So we must assume you are a regressive and…enuff said.

    #173357
    clayton
    Member

    You are right ENOUGH said, jeeessshh. thank you. Buenos!

Viewing 15 posts - 76 through 90 (of 119 total)
  • You must be logged in to reply to this topic.