In the classic and time-honored game of “Big guy beats up little guy” the United States looks likely to start squeezing small tax haven countries next year. President-elect Obama is promising blacklists and other devices against countries that we use to set up foreign trusts and corporations.
Key measures are likely to include: revealing the beneficial owners of secretive trusts; prohibiting accountants from charging fees on specific tax services; and identifying ‘offshore secrecy jurisdictions’ that ‘unreasonably restrict US tax authorities from obtaining needed information’. The measures could end years of financial secrecy that have protected the super-rich and international businesses as they move money from one jurisdiction to another.
If you do your tax planning with an eye on transparency, you’ll be fine. Everything we set up is something you could plop down in front of a grumpy career governmento. Secrecy simply doesn’t work. Confidentiality is fine, but be prepared to reveal and report as appropriate.
I’m troubled by this trend. I am seeing a consistent pattern of big countries abusing smaller countries (see Germany and Liechtenstein as a particularly egregious recent example). This has happened since national borders were invented, and is just playground bully behavior on a grand scale. It’s not going to change. Ever. Tax policies. Tariffs. Soldiers. U.S. history is full of this behavior. Let’s just stipulate to the sad fact that this will continue long after you and I die.
What’s troubling is the trend of persistent invasive governmental behavior. I fear over the long run this will mean collateral damage to other individual liberties.
Memo to all personnel:? re-acquaint yourselves with the Law of Unintended Consequences.
Here’s the Intended Consequence stuff that’s easy to see:? for those of you with complex financial situations, expect more tax forms to file, more revelations to give to the U.S. government, more expense for lawyers and accountants, and more tax to support the U.S. government. Expect more prosecutions, Government Careers Advanced, etc.