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Economy

Paradise Papers: How offshore tax havens are worse than you think

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Wilbur Ross

There’s a dirty little secret many ultra-rich people would never want revealed: most of them pay lower percentages in actual taxes relative to their overall wealth than average middle class Americans. No, this is not a call for socialism nor is it a rant about how unfair the system is. Frankly, I don’t blame people for wanting to keep more of the money they earn. However, I do take offense at the lack of transparency they embrace as their efforts to save money also shield their dealings and motivations.

When Joe Blow Billionaire uses a tax haven, it’s smart money. That’s not to say it’s right that they can keep large percentages of their money hidden from the government in ways that middle class Americans cannot, but it’s not their fault the system is broken. We shouldn’t expect them to willingly pay more when they’re given legal avenues to avoid it. Those who complain from a socialistic perspective about the use of tax havens are the same people who would use those havens if they had the money. Ultra-liberal semi-socialist Justin Trudeau, Canada’s Prime Minister, would probably side with anyone who complained about how unfair it was unless they were aware that he took advantage of it himself.

The real problem isn’t that money can be protected for the rich. Where we get into real trouble is when politicians do it. Again, they have the right to protect their money, but they should not be allowed to shield their motivations. When a public official has secret investments, it’s impossible to know if their decisions aren’t being influenced by personal gain or loss.

Public disclosure of investments allows us to know if Senator X has ulterior motives for their actions. Let’s say Senator X has investments in an American sugar company. Americans should know this in case he’s voting on a bill to save sugar subsidies. Conflict of interests are easier to see when all of their money is in public view. When they hide their money offshore, their investments (and therefore their interests) are kept from the people they’re supposed to represent.

An example of this may be coming to light with the recent Paradise Papers release. U.S. Department of Commerce Secretary Wilbur Ross was listed in the Paradise Papers as having a stake in a company that does business with a gas producer partly-owned by Vladimir Putin’s son-in-law. As you can see, it’s already a distant but not completely indirect connection, though one can easily argue that it’s not a close enough connection to get Robert Mueller’s interests piqued. Nevertheless, this is an investment that was previously unknown because it was done through secretive offshore accounts.

We must have a reasonable expectation that the people we elect as well as the people who are put into bureaucratic offices are untainted. Ross has direct influence over trade and manufacturing policy. He should be the last person in DC to be heavily invested in foreign interests hidden from the people. Again, let’s not jump to conclusions or call for President Trump to get rid of Ross, but the fact that questions now have to be asked is a black eye for the Trump administration.

Tax havens are unfair, but that’s not as big of a problem as most believe. The real issue is transparency. Anyone in public office who utilizes offshore accounts or investments to hide their money should be put under the microscope. If we don’t know their private motivations, we can’t trust their public actions.

Further Reading

Trump commerce secretary’s business links with Putin family laid out in leaked files

https://www.theguardian.com/news/2017/nov/05/trump-commerce-secretary-wilbur-ross-business-links-putin-family-paradise-papersRoss, a billionaire and close friend of Trump, retained holdings in Navigator after taking office this year. The relationship means he stands to benefit from the operations of a Russian company run by Putin’s family and close allies, some of whom are under US sanctions.

Corporate records show Navigator ramped up its relationship with Sibur from 2014, as the US and EU imposed sanctions on Russians. The measures followed Putin’s aggression in eastern Ukraine and annexation of Crimea. Navigator has collected $68m in revenue from its Sibur partnership since 2014.

Former liberal who recently realized I've been a #Federalist the whole time. GOP fooled me into hating what I thought was conservatism. Now I see the light.

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1 Comment

1 Comment

  1. Douglas Olson

    November 6, 2017 at 11:22 am

    I will even go one further. If a politician is to have any say on tax policy, particularly income taxes, they need to be transparent on how much an on what income they pay taxes on. For example, if a politician wants to increase the payroll tax but all of their income is from dividends, then the warning bells should be ringing. Right Trump?

    Maybe it is time we stop taxing income at different rates. If we do, and those living off dividend income have to pay the same rate as those paying in payroll taxes, then I would bet that all those rich folks will start complaining about taxes. Right Buffet?

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Culture and Religion

Video: You’re Not A Liberal!

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A Truth Revolt Original from Bill Whittle that succinctly explains why Leftists aren’t Liberal.

Published on Oct 10, 2014

The 4:20 minute mark in the 6 minute video has its most important point:

The founding fathers were the True Liberals because they believed in Liberty – with both words having the same origins.

They believed in individual Liberty, private property, limited government and the common sense civil rights of free-speech and armed self-defence. They believed in the freedom to be left alone.

The point of the video is that the collectivists of the nation’s Socialist-Left do not meet the definition of the word Liberal. They believe in collective rights, Collective ownership of property, unlimited government, limitations on speech and gun confiscation.

Those of that mindset (Leftists) are not Liberal by any stretch of the imagination.

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Economy

On corn dogs and continuing resolutions

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Confession: I was a fat kid.

You don’t need to know how fat, but it was enough that my mom had to establish strict limits on how much of any given food I could eat per meal, and I couldn’t surpass that amount without her express permission.

My family well remembers one such occasion when I was maybe seven years old where I got a little, shall we say, excessive.

I had maxed out for the day on my allotted two corn dogs — my favorite food at the time — but I was still hungry. My mom wasn’t home, so I asked my dad if I could have two more corn dogs.

He approved and I had two more, but I still wasn’t satisfied, so I asked my dad again if I could have two more corn dogs, which he authorized, and so on.

All told, I ended up consuming eight jumbo corn dogs in one meal. And I felt fantastic.

In fairness to my dad, given that each of my requests couldn’t have come more than five minutes apart (I tend to inhale my food), he probably thought I was referring to the same two additional corn dogs each of the three times I petitioned his consent.

Moreover, when my mom found out, there wasn’t much that could be done; I had clearly overeaten, but I hadn’t technically disobeyed procedure.

Believe it or not, congressional budgeting is a lot like an overweight seven-year-old downing corn dogs.

Periodically, despite gouging the American people trillions of dollars already, Congress runs out of money, maxing out on its corn dog limit, as it were. Congress is then faced with two options: 1) a continuing resolution, wherein the legislature passes an appropriations bill and thereby authorizes government funding at the same levels as previously established by that year’s budget until either a specified date or a regular appropriations bill is passed; or 2) a government shutdown until appropriations can be passed.

Since October, when the 2018 fiscal year began, we have seen four continuing resolutions from Congress, two of which materialized only after a government shutdown — the most recent one occurring early Friday morning for approximately eight hours.

This means that Congress has eaten its two corn dogs and gone back to ask for two more corn dogs four times in the last four months. They have now consumed ten corn dogs, which is even more than a certain hefty seven-year-old.

The latest continuing resolution, which put an end to Friday’s blink-and-you’ll-miss-it shutdown, outlines two years of spending and absolutely blows out the deficit to the tune of $1.2 trillion. And while it’s true that the continuing resolution only extends to March 23 in order to allow for time to iron out all the details, the legislature has bypassed any threat of government shutdown or continuing resolution in the near future.

You see, the traditional two options listed above — a resolution or a shutdown — only trigger due to the debt ceiling, which prohibits spending past a certain point without specific authorization from Congress, who holds the power of the purse. But what would happen if that limit didn’t exist? The government could spend whatever it wanted with or without a budget, with or without a deficit, and with or without any accountability to the American people. Essentially, it means Congress can write itself a blank check.

Unsurprisingly, Congress has vied for this third option, suspending the debt limit until March 2019 in order to free up legislators to focus on reelection in 2018 and avoid the negative publicity of a government shutdown. To avoid a shutdown, Congress has made itself too big to fail.

And that means that no matter which issues arise, be it DACA, welfare, military, education, or healthcare, Congress will undoubtedly take advantage of its liberty to spend-up the wazoo.

Where there is no accountability, there is no progress. After all, once you grant the obese seven-year-old inexhaustible access to unlimited Foster Farms jumbo corn dogs, he’s not getting any skinnier.

Richie Angel is a Co-Editor in Chief of The New Guards. Follow him and The New Guards on Twitter, and check out The New Guards on Facebook.

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Economy

The GOP: The Party of Fiscal Conservatives?

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The GOP, led by President Trump, recently passed the most massive tax reform bill in decades. One of the biggest pieces of that bill dropped the corporate tax rate down to 21% from 35%, which had previously given the United States the largest corporate tax in the industrialized world. So cutting this tax and cutting individual taxes was a job well done for fiscal responsibility. It was a CRITICAL first step, but it was only a first step.

The second step was to cut the bloated federal budget. Last night’s budget deal not only failed to do this but in fact increased spending to the deficit levels of the Obama and Bush eras. Liberals claim this is due to the tax cuts, but Senator Rand Paul demonstrated clearly that this has to do entirely with the expensive high Congress gets from spending taxpayer money as well as placing an unconscionable burden on our children.

Republicans made a big to do about deficits and the debt while Barack Obama’s was in power, even coming up with the sequester during the latter half of the Obama Presidency. However, now that they control both houses of Congress and with Trump in the White House, they suddenly have no inclination to cut spending.

“When the Democrats are in power, Republicans appear to be the conservative party, But when Republicans are in power, it seems there is no conservative party. The hypocrisy hangs in the air and chokes anyone with a sense of decency or intellectual honesty,” said Senator Rand Paul (R-KY) who attempted to block the bill last night.

Others in the party also demonstrated their displeasure at the lack of leadership by the GOP on this issue. Missouri Senate Candidate Austin Petersen’s campaign released this statement:

“The spending deal approved late last night, and supported by both Missouri Senators McCaskill and Blunt, was an absolute travesty. The American people are already $20 trillion in debt, and the deficit for the current fiscal year is estimated to be an additional $1 trillion. This is just plain nuts! And it’s a great example of why Austin is in this Senate race: because like many Missourians, he’s sick and tired of sending politicians to Washington who, break their promises. The truth is we don’t just need another Republican elected to the United States Senate — we need a true constitutional and FISCAL conservative — someone who’s going to stick to their guns, stick to their principles, and most importantly, keep their promises. “

Konstantinos Roditis, Republican candidate for California State Controller said, “Hope of a budget with a modicum of fiscal responsibility from D.C. is laughable. The likelihood a fiscally responsible budget will see the light of day in D.C. is as likely as Trump winning California in a landslide in 2020. Here is a perfect example why I say, I’m a Conservative that happens to be a Republican, instead of a Republican that happens to be a Conservative.”

California GOP Senator candidate Erin Cruz had this to say… Those in the House and Senate work for the American people and should put forth a fiscally responsible budget, one which does not put an undue burden on the taxpayer and future generations. Heavy cuts should be made in the area of foreign aid, as well as pet deals congressional members tuck into these bills known as pork. The taxpayer is the boss and they want big change in government, namely reduction in size and scope of government as well as cuts to unnecessary spending. The budget passed is not reflective of what the American people voted into office. Actual change is coming, patriots like myself are standing up to the call to serve the people, there will be a big turn in how D.C. operates. Americans live by budgets and within their means, Congress should as well. Midterms can’t come soon enough for all Americans. Americans must push for a high turn out at the polls this year.

A disappointment for many conservatives is that standard-bearer Ted Cruz (R-TX) “reluctantly” voted for the spending bill, giving away any credibility he might have in the future on this issue. It should be noted that Cruz has filibustered spending in the past, famously reading to his children from the Senate floor.

In stark contrast, there was no surprise that the other Texas Senator, John Cornyn, was vocal about his annoyance with Rand Paul’s efforts to derail the budget process, saying this was an “emergency” while failing to make mention Congress hasn’t had a non-emergency spending effort in years.

It would be easy for some to lay the blame for all this on the self-proclaimed “king of debt,” President Trump. However, those who have actually read the Constitution know the power of the budget comes from Congress. Sure, Trump could lead a bit more on this issue, but at no point has Trump ever made over-spending a priority.

Speaker Paul Ryan (R-WI), who is the former chairman of the House Budget Committee, seems most to blame. Of all people he should know how to cut spending, and yet has failed to do so.

The political fallout will likely be negligible. The average American, when asked, will say they are concerned about the debt, but often not enough to change their vote. And so both major parties keep passing this issue back and forth like a hot potato. The party that will be hurt by the debt is whoever is in power when the economy comes crashing down due to debt. Time will tell on that one.

A couple of months ago I wrote about how we can’t afford our sacred cows, including increased defense spending, and yet we’re increasing defense spending through the roof. You can refer back to it here.

The thing I can tell you for certain is we can’t keep doing what we’re doing. Spending on credit will eventually lead to default as more and more of our budget is eaten up by paying interest on our debt and it leases to Greek-style austerity. We need new leadership with ACTUAL fiscal conservatives.

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