A Patriots Manifest June 12 2008
William White
In 2010 Roth conversion year rolls around. The beneficiary of a Roth IRA, 401-k or 403-b will pay no taxes under current law. What does this mean politically? That’s currently unknowable. The reason it is unknowable is one you, my readers, are acquainted with. Capital flight from the future taxing of retirement accounts has been a thriving industry on the web for years: “Buy Costa Rican Real Estate”; “Off Shore Banking” and “Protect Your Capital with ETFs”
That such services have been advertised is known . Click count is known with extreme accuracy. Eyeballs are known with highly acceptable accuracy. What is unknown is how many people have evaded or more wisely avoided reporting requirements in getting their money out of the country. If the reporting requirement is 10K then $9,999 or less is used, if 2K then $1,999 is used and so on. Will there be a tax on retirement accounts? I don’t know, I do know that there are large communities of people online and offline that collect data on proposed and enacted legislation along these lines. What is less clear is what the responses will be to such a move.
(Article Continues Below)
|
The US tax code, both personal and corporate, actively encourages capital flight through renunciation of citizenship taking the wealthy off the tax rolls and the world’s highest corporate income tax. Under US Law you can avoid tax on traditional retirement plans too: move to another country, renounce US citizenship and withdraw the money free of taxes. Check with a lawyer as to your eligibility for social security and medicare before doing this. Banking and capital flight is a major industry at every major port the cruise ship industry goes to. There are at least two separate cultures of retirees in the US those who are putting their money offshore now in expectations that the US government will renege on its promises about retirement accounts and those who are keeping trust in the government. I suspect that the latter group is the larger group and that there will be a large scale attempt at legal expatriation in 2010 but if there is an attempt to renege on the promises undercover capital flight will take off. So what does this mean in regards to memes?
The declining or even negative savings that have been recorded in America since the 1970s are partly the result of capital that has already fled the country. Loyalty to the country is partly a function of not feeling persecuted. Creating bonds is difficult. For those readers who are not veterans military boot camp is a way of building bonds quickly through sleep deprivation and synchronized movements but it takes 2-3 months and washing out 25-50% of applicants. But all that work goes down the toilet if the chain of loyalty is broken and quickly. Not a whole lot is written about how to destroy elite military units through inept leadership.
However branding as in you brand yourself a Ford driver or Pizza Hut customer is well studied. Once a customer is lost they are generally lost for good. The US government is losing market share due to discouraging bonding through inflation and stupid tax laws. In just under two years due to retirement laws this will go critical and that will be bad. Any screw ups on Roth conversions and the floodgates open.
The views expressed by William White are his and his alone and may not be the views expressed by A Patriots Manifest. Thank you .... Michael Roller...