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Sovereign Man Notes from the Field Date: July 8, 2011 Reporting From: Sofia, Bulgaria

In Banking, Business, Business/Political Trends Worldwide, Constitution of The United States, currency, Jobs in Cape Coral, Local news and Opinion, Medicine, Offshore accounts, Personal on July 8, 2011 at 1:25 pm

Sovereign Man

Notes from the Field

Date: July 8, 2011
Reporting From: Sofia, Bulgaria
Folks… you just can’t make this stuff up.On July 6th, just two days ago, at least a dozen busybody Congressmen sponsored the introduction ofHR 2411, the “Reduce America’s Debt Now Act of 2011.” They always come up with fantastic names for these pieces of legislation… and rest assured, the better/more patriotic the name, the more ominous the bill. This one follows the pattern.

HR 2411 states that every worker in America should be able to voluntarily have a portion of his/her wages automatically withheld and sent directly to the Treasury Department for the purposes of paying down the federal debt.

“Every employer making payment of wages shall deduct and withhold upon such wages any amounts so elected, and shall pay such amounts over to the Secretary of the Treasury…”

That’s right. Uncle Sam is so broke that he wants to give all the good little Americans out there the opportunity to contribute an even greater portion of their paychecks to finance government largess.

Desperate? Hmmm…. Don’t worry, it gets better.

Obviously, if an employee feels so compelled and should elect to have a portion of his/her paycheck withheld, the onus of responsibility is now on the employer to make it happen. The employer has to do all the paperwork, withhold the money, send the payment to the Treasury, maintain the account records, and probably submit to all kinds of new filing requirements.

You can imagine that, if passed, the bill will result in a host of new IRS regulations, complete with a battery of penalties for employers who don’t fill out the paperwork properly, submit filings on time, or make some administrative mistake.

Think about it: if a small business owner has one single employee who is dumb enough to think that it’s his patriotic duty to pay down the debt and decides to contribute $1/month, that owner will have the responsibility for all kinds of new forms and filings, plus submit to new ‘debt reduction audits.’

But don’t worry, it gets even better.

So let’s say there are millions of sheep out there who elect to donate a portion of their toil and sweat so that the Chinese and big financial institutions don’t have to worry about an American default. How does Congress plan on rewarding its most patriotic citizens? By sticking it to them on their taxes, of course.

HR 2411 stipulates that any contribution made to the Treasury in order to pay down the federal debt IS NOT TAX DEDUCTIBLE.

“The [Treasury] Secretary shall include. . . a reasonably conspicuous statement that any amounts deducted and withheld from wages. . .  are not deductible as charitable contributions for Federal income tax purposes.”

Imagine this scenario: You make $100,000/year. In a fit of complete insanity, you decide that you want to withhold your entire annual salary to pay down the debt. Hey, you can always move in with mom for the next year, right?

Well guess what– Uncle Sam will gladly take your money… and then STILL expect you to pay taxes on the $100,000 that you earned, so you’d have to come out of pocket with an additional $40,000 or so.

Don’t worry, though. The Social Security and Medicare wages are reduced by the amount that you withhold, making you only liable for state and federal taxes. Seems like a good deal, eh comrades?

There are so many things utterly wrong with his piece of legislation, it’s hard to know where to begin other than by saying that such intellectual and philosophical perversion is only capable of springing from unprincipled sociopaths whose sole capability is the destruction of value.

There’s a great quote from Atlas Shrugged that comes to mind which sums this all up:

“[W]hen you see that in order to produce, you need to obtain permission from men who produce nothing; when you see that money is flowing to those who deal not in goods, but in favors; when you see that men get rich more easily by graft than by work, and your laws no longer protect you against them, but protect them against you. . . you may know that your society is doomed.”

We’ve discussed the story of the boiling frog so many times before– a frog, when put into a pot of water and slowly brought to a boil, doesn’t realize that he’s in danger until its too late. I think the boiling frog just got a little hotter. Have you hit your breaking point yet?


Until tomorrow,

Simon Black
Senior Editor, SovereignMan.com 
This article appears courtesy of <a href="http://www.sovereignman.com">SovereignMan.com: Notes From The
Field</a>, a free newsletter dedicated to individual freedom,
internationalization, asset protection and global finance. For a
complimentary subscription, visit <a href="http://www.sovereignman.com">http://www.SovereignMan.com</a>


Sovereign Man Notes from the Field Date: June 27, 2011 Reporting From: London, England

In Business, Business/Political Trends Worldwide, Constitution of The United States, Continental Travel, Food and Staples, Jobs, Medicine, Opportunity, Political, Sovereign Man, Taxes, Travel on June 28, 2011 at 9:45 am

Sovereign Man

Notes from the Field

Date: June 27, 2011
Reporting From: London, England

Are you a US taxpayer? Do you have at least $10,000 in overseas accounts? It’s time to put those annual disclosure statements in the mail… and quickly. Let me explain.

Each year by June 30th, US taxpayers are obliged to report all foreign financial accounts in which they have either a beneficial interest or signature authority, so long as the aggregate value of all the accounts exceeds $10,000 at any time during the calendar year. The form is known as the FBAR.

You must accurately disclose the highest value of each account during the previous calendar year on your FBAR… so make sure you go back through your bank and brokerage statements to check.

Let me give you a few examples:

Iggy Noramus is a US citizen who keeps all of his money in the United States. He happily watches the value of his dollars depreciate and completely ignores important warning signs like the Treasury Department confiscating pension funds to make up for their budget shortfalls. Iggy does not need to file the FBAR.

Guy Sharpe is also a US citizen who took action in 2010 to set up a foreign bank account in Hong Kong after reading an issue of Sovereign Man: Confidential. He only funded the account with $1,000, figuring that he just wanted to have an overseas account ready in an emergency. Guy doesn’t need to file the FBAR either.

Dee Pockets is a US citizen with four overseas accounts. One personal account in Switzerland has just over $1 million, one business account in Singapore has $5 million, one small account in Belize has just $50, and a Cayman brokerage has $250,000. Dee must file the FBAR and declare each of the four accounts.

Goldie Bugg is another US taxpayer who established an account in 2010 with GoldMoney; she opened the account with only $8,000 at the beginning of the year, but the market value of her gold peaked at $11,500 during 2010. Goldie must file an FBAR as well.

The gold ruling is new this year, and we first reported this back in March. The Financial Crimes Enforcement Division (FinCEN) made it quite clear that any gold held in the custody of another firm or individual constituted a foreign financial account and needs to be reported on the FBAR.

Frankly I’m starting to believe that this was part of a larger movement to recast gold as a ‘financial instrument,’ subjecting precious metals to regulation, control, and potential confiscation.

Given what we’re seeing now with so many brokerages cutting off their OTC gold contracts, this hypothesis is becoming more credible. I’ll have more on this working theory in another letter.

For now, make sure that you get your FBAR’s filed in time. The Treasury Department changed its language in the instructions this year, spelling out that they expect to receive the report by June 30th, which is this coming Thursday.

The form only takes a few minutes to fill out (assuming you have the information), and the instructions are self-explanatory. Consult your tax advisor with any questions.

If you don’t have a foreign bank account yet, you really ought to consider it for four key reasons:

1) A foreign bank account often makes it much easier to diversify out of the dollar. If you believe that, excluding some short-term rallies, the dollar’s long-term trend is lower, you can easily hold foreign currencies in a foreign account.

2) Foreign banks are often much stronger, not these quasi-zombie banks propped up with deceptive accounting rules and public funds we see in the west. Singapore, for example, has never had a banking failure, ever. I’ve even recommended one bank in SMC that keeps 100% of deposits in cash equivalents.

3) Banks overseas are typically much more innovative. In the west, banks think they’re being innovative when they get a Twitter account. In Asia, you can sign up for the next big IPO from an ATM. You can send a worldwide wire transfer from your mobile. You can denominate accounts in different currencies and precious metals.

4) Foreign banks are not controlled by your government. Get sideways with a bureaucrat in your home country and see what happens to your assets; there are dozens of agencies and courts out there, whether at the state, local, or federal level, that can freeze you out of your own money with a single phone call.

They can’t do that if your money is offshore. Capital controls, fear and intimidation tactics, frivolous lawsuits, etc. have limited impact on offshore accounts. It’s often possible to apply through the mail, and I’ve seen some banks with account minimums as low as $0.

If you have any savings at all, I strongly urge you to consider moving at least a portion of it overseas for the reasons I outlined above.

Until tomorrow,

Simon Black
Senior Editor, SovereignMan.com
This article appears courtesy of SovereignMan.com: Notes From The
Field
, a free newsletter dedicated to individual freedom,
internationalization, asset protection and global finance. For a
complimentary subscription, visit http://www.SovereignMan.com

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