Offshore Asset Protection BLOG - Bob Bauman

That Unending IRS Numbers Game

2009-11-19T22:11:46-05:00

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Amnesty Flood

Under a Nov. 17th headline reading "14,700 Disclosed Offshore Accounts," New York Times reporter Lynnley Browning reports on an apparently gloating, IRS commissioner and what he seems to consider a victory of sorts.

"Douglas H. Shulman (below) of the I.R.S. reported a 'flood' as the disclosure deadline neared.

"The Internal Revenue Service said Tuesday that more that 14,700 Americans had been attracted to an amnesty program in recent months and disclosed their secret foreign bank accounts — many more than had been attracted to a previous I.R.S. program...A previous I.R.S. initiative, in 2003, aimed at luring Americans who evaded taxes through offshore credit cards, drew only 1,300 evaders, according to I.R.S. data.

"And the reason, Justice Department and I.R.S. officials said, was the widespread publicity about the agreement in February by the Swiss banking giant UBS to pay $780 million and admit to criminal wrongdoing in selling offshore banking services that had enabled tax evasion. In August, under legal pressure, UBS agreed to turn over the names of about 4,450 American clients suspected by the I.R.S. of using the bank’s offshore services to evade taxes."

Fear Factor

Before I get to the continuing IRS numbers game, the above Times quote underscores something I've said many times that official IRS policies too often amount to fostering tax terrorism and intentional fear.

In mentioning the IRS fear factor I'm in the good company with three leading advocates of personal liberty I've quoted before.

In 1757, one of the patron saints of conservative political philosophy, Edmund Burke, wrote: "No passion so effectively robs the mind of all its powers of acting and reasoning as fear." In 1776, John Adams of Massachusetts, that fiery leader of the American Revolution, and second U.S. president, correctly observed: "Fear is the foundation of most governments." Adams spoke of a tyrannical English king, but his words could be the official motto of the U.S. Internal Revenue Service.

And in 2002, and at many other times, my former colleague in the U.S. House, Rep. Ron Paul (R-Tex) has said of the IRS: "It's the use of fear to try to intimidate people. Fear is the tool used to intimidate most Americans to comply with the tax code."

That Numbers Games

I'm not going to replay the stats that prove the IRS engages in intentional deceit, but for those who are interested, see my run down of the numbers in my Oct. 17th blog entry.

There I recounted how, in recent years, the IRS commissioners have publicly claimed that offshore tax evasion supposedly amounted figures ranging from US$447 million to US$40 billion. At the same time the number of Americans allegedly who were offshore evaders was given variously as 82,000 or 505,000 or 2 million. (The numbers changed with every IRS press release).

But let's consider that number the current IRS Commish finds so pleasing -- 14,700 possibly fearful Americans came forward when offered amnesty, with reduced penalties and interest. If they did not, they faced losing half of the funds they had in unreported accounts and possible criminal prosecution.

Tax Paying Americans

The total population of the U.S. at the moment is about 304 million. 14,700 American who did not report offshore accounts equals .000048355% of all Americans.

Let's say one million of those Americans have offshore accounts and have failed to report them. 14,700 is .00147% of that 1 million.

An estimated 6 million Americans actually live offshore. 14,700 is .00245% of that group living abroad that might fail to report.

Lastly, the IRS statistics state that there are a total of 151 million American so-called "taxpayers" -- but when the IRS uses that word they mean only the people who file annual income tax forms, not necessarily those who owe and pay taxes.

Tax Free by Law

An astonishing 43.4% of all Americans now pay zero or "negative" federal income taxes, (negative is a liberal cover word meaning they get welfare payments simply for filing their tax forms for various reasons Congress has deemed to be tax-free worthy).

The number of single or jointly-filing "taxpayers" - the word must be applied sparingly - who pay no taxes or receive government handouts has reached 65.6 million out of the 151 million who do file.

That leaves about 86 million filers who really do pay taxes, (and recall that the top 10% of those folks pay 80% of all the taxes). 14,700 non-reporting Americans with offshore accounts figures out to be .000017093% of the total 86 million Americans who do obey the law and pay their taxes.

As one observer noted: "The perils of today's situation should be obvious. The United States is close to a tipping point where most people can skip the post office run on April 15 to mail a check because they're expecting one from the government instead."

So What's the Big Deal?

These tiny fractional numbers of alleged offshore tax evaders raise the question of what's really behind the continuing IRS hullabaloo demonizing all Americans who do business offshore. In my opinion, we can conclude it's all part of that IRS fear factor campaign.

Well, you say, Commissioner Shulman claims that the unreported UBS 4,450 accounts alone, at one point held $18 billion. How much tax is owed we don't know, but even if they owe half of that amount, it's $9 billion.

Real Numbers

One thousand times one million dollars ($1,000,000) equals one billion dollars ($1,000,000,000). One thousand billions equals one trillion ($1,000,000,000,000),.

The U.S. national debt now exceeds $12 trillion. That's $39,000 for ever man, woman and child or $110,500 per taxpayer.

The U.S. government under the free spending President Obama already this year has spent $3.3 trillion; the annual budget deficit this year now is $1.5 trillion; both numbers are climbing by the minute. (The various socialized health care bills pending in Congress are estimated to cost from over one trillion dollars to over three trillion).

So 14,700 late reporting taxpayers is played by the IRS as a big deal -- but compare that to the 65.6 million who pay no taxes or get government handouts, or both.

Time to recognize the IRS fear campaign for just what it is. Figures don't lie but liars do figure.

You can read all about legitimate and legal offshore financial centers in my just published 4th edition of Where to Stash Your Cash Legally: Offshore Financial Centers of the World. Find out how here.

The Sovereign Society is a recognized voice in the complex offshore world. Join the Sovereign Society and keep informed.

The Cook Islands – Far Out

2009-11-18T18:08:38-05:00

Way out in the South Pacific, (some would say, in the middle of nowhere), lie the Cook Islands, home to a very modern set of offshore financial laws that may be just what you need: iron-clad asset protection trusts, international business corporations, limited liability partnerships, and a very strict financial privacy law that keeps private your personal business.

Travels of Capt. James Cook, 1755-1779

Not as well known as some offshore financial centers, in 1981 the Cook Islands government first began adopting (and updating) a series of wealth and asset-friendly laws. Since then these islands have attained a definite role in offshore financial circles, especially when it comes to asset protection trusts.

Named after Captain James Cook, the famous British explorer who visited them in 1773, the islands became a British protectorate in 1888. By 1900, administrative control was transferred to New Zealand; in 1965, residents chose self-government and a free association with New Zealand. A member of the British Commonwealth, the islands have a constitution with a Westminster style parliament elected every four years by universal suffrage. The legal system is based on British common law and English is widely spoken.

Heart of Oceania

A broad net of 15 coral islands in the central heart of the South Pacific, the Cook Islands are spread over 850,000 square miles, southwest of Tahiti and due south of Hawaii. The islands occupy an area the size of India, but have a population (a little over 21,000 people) no larger than a small town in America.

Local time is 10 hours behind GMT, with 9:00 a.m. in Hong Kong is 3:00 p.m. the previous day in the Cook Islands. When it is noon EST in the United States it is 5:00 p.m. in the Cook Islands.

This geographic location gives the Cook Islands, with its excellent modern communications, a strategic advantage in dealing with both the Asian and American markets.

Planned Offshore Center

The development of the Cook Islands as an offshore financial center was the product of the government’s official collaboration with the local financial services industry. It’s no secret that certain American asset protection attorneys played a role in advising the government on asset protection issues, actually drafting statutes for the island’s parliament.

Financial services now rank second to tourism in the economy. Despite some 50,000 visitors a year to the capital island, Rarotonga, (left) the beautiful Cook Islands remain largely unspoiled. The New Zealand dollar is the local currency, but usually offshore transactions are in U.S. dollars. Several major Pacific area banks have offices here.

Tailored Wealth Protection

There is much here to for serious persons of any nationality who want strong asset protection supported by sympathetic government and judicial policies.

Existing statutes provide for IBCs, offshore banks, insurance companies, and trusts. All offshore business conducted in the Cook Islands must be channeled through officially registered and regulated trust companies. A comprehensive range of professional trustee and corporate services is available.

International companies incorporated are allowed great flexibility in corporate structure with provisions to ensure ease of administration. Incorporation can be completed within 24 hours.

The Cook Islands definitely is a tax haven. The government officially guarantees no taxes will be imposed on offshore legal entities. Thousands of foreign trusts, corporations, LLCs and partnerships are registered here, protected by an exceedingly strong financial privacy law. There are no currency controls.

Updated Laws

The Cook Islands systematically has adopted a series of anti-money laundering, financial reporting, and anti-financial-crime laws. These laws were sufficient in 2005 to get them removed from the Financial Action Task Force (FATF) blacklist, which was their stated objective. These laws prohibit "fishing expeditions" and ensure that any information disclosed is done through proper channels with legal justification after a court hearing.

In 1989, an amendment to the International Trusts Act 1984 introduced the asset protection trust (APT). This legislation is considered cutting edge and has since been copied by many offshore financial centers.

An asset protection trust is not required to file any returns, reports, or records. A trust settlor’s bankruptcy does not void the trust. Foreign court judgments are not enforceable against a trust. A foreign claimant must start new proceedings in the Cook Islands subject to local law. All claims are subject to a two year statute of limitations running from the time of the trust creation.

Strict Confidentiality

Strong financial and banking secrecy provisions apply here, requiring government officials, as well as trustee company and bank employees, to observe strict secrecy backed by criminal sanctions.

The official registrar records of foreign companies and of international trusts are not open for general search, with a few defined exceptions. Thus all parties are kept private unless a court releases the information.

In 2009, together with almost every offshore financial center in the world, the Cook Islands government agreed to apply the OECD standards allowing exchange of tax information about foreigners accounts when tax evasion can be shown.

The Anderson Case

In a major American legal case, the U.S. government tried to force the repatriation of funds held by a Cook Island trust and lost, even though the Americans who created the trust for a time were jailed for contempt of court. Not even a federal court could crack the Cook Island trust laws. For more about what is known as the "Anderson case" see FTC vs. Affordable Media LLC, 179 F. 3rd 1228, U.S. Ct. of Appeals, 9th Cir. (1999).

So don’t let those thousands of miles distance scare you.

A good offshore-savvy attorney in any country should know how to use the Cook Islands asset protection laws to your benefit. If you need a U.S. offshore attorney just ask me.

I have a good friend who has had a Cook Islands trust for many years as a protection against possible business liabilities. He is fully satisfied with its operation and protection, with his local American attorney acting as liaison with his Cook Islands trust company.

Or, if you want to go direct, you can contact our man in the Cook Islands: Puai Wichman, Managing Director, Global Consultants and Services (Cook Islands) Ltd., Global House, PO Box 92, Avarua, Rarotonga, Cook Islands, Tel: +682 27 047 Fax: +682 27 046, Email: cookislands@gcsl.info or puai@gcsl.info

You can read all about the Cook Islands and all of the world's offshore financial centers in my just published 4th edition of Where to Stash Your Cash Legally: Offshore Financial Centers of the World. Find out how here.

The Sovereign Society is a recognized voice in the complex offshore world. Join the Sovereign Society and keep informed.

America's Narcissistic "Pacific" President

2009-11-16T22:52:31-05:00

Even for those of us who voted for him, the 2008 McCain presidential campaign is best forgotten -- even if Sarah Palin wont let go of it just yet.

Perhaps you recall that at one point in the endless summer of 2008, for a few weeks, the Arizona senator made some political hay when he decried his very junior Senate colleague from Illinois as little more than a "celebrity."

McCain even aired a series of TV ads that showed more images of Obama than himself, all of them tying to turn Obama's crowd pleasing talents against him.

Mr. Celebritney

A July commercial blaming Obama for high gasoline prices portrayed crowds chanting Obama's name. A subsequent ad mixed images of Obama on his triumphant 2008 European love tour with video clips of pop figures Paris Hilton and Britney Spears.

One McCain campaign ad taunted: "Is the biggest celebrity in the world ready to help your family?"

That video ad featuring Paris Hilton, (not that Paris Hilton video) seemed to have struck a nerve in candidate Obama, who promptly ran TV ads accusing McCain of being an even bigger celebrity -- You're another, nah nah!

Excessive Self-Love

The word "narcissism" is defined as: 1) inordinate fascination with oneself; excessive self-love; vanity; 2). in psychoanalysis, erotic gratification derived from admiration of one's own physical or mental attributes, being a normal condition at the infantile level of personality development.

I would guess that at least some celebrities do suffer from, or enjoy, being narcissistic, admiring themselves inordinately.

The First Pacific President?

Monday's New York Times dispatch from Shanghai by reporters Helene Cooper and David Barboza includes this interesting statement: "During Mr. Obama’s trip, his first to Asia as president, he has taken to referring to himself as 'America’s first Pacific president,' a term he first used during a speech in Tokyo on Saturday morning."

Well, I know that the president can claim many "firsts" in his life, the most common being the belief that he is the first African-American or black president, a point he repeatedly makes in his orations, as he did in Asia. That's really not correct, since Mr. Obama is of mixed race, his mother having been a certified member of the Caucasian race.

Obama may not even be able to claim that he is the first mixed race president, since that honor probably goes to Americans 29th president, the amiable Warren Gamaliel Harding of Ohio, a conclusion supported in the pages of the august New York Times. (See also the 1968, Shadow of Blooming Grove, by the Harding biographer Francis Russell.

Just a Minute, Mr. President

It appears that Mr. Obama believes that he is entitled to his self-bestowed title of "America's first Pacific president," by virtue of his birth in the decidedly Pacific State of Hawaii, (although the "birthers" dispute that), and the fact that he spent a few youthful years living in Indonesia with his mother and her second husband.

But the president, who fancies himself to be so personally historic, should read more American history.

As Obama himself admitted in China, in 1784, George Washington (01) endorsed the voyage of the U.S. ship, The Empress of China, the first American commercial ship owned and outfitted by the Revolutionary War veterans, that sailed to China in an attempt to bring the fledgling United States into international commerce with the Far East.

A Long Star Spangled Line

It was Teddy Roosevelt (26) that opened up the entire Pacific basin to American trade by pushing through the colossal construction feat that is the Panama Canal.

Teddy also sent the impressive Great White Fleet of the U.S. Navy on a 14 month long voyage in 1907 covering 43,000 miles with 20 port calls on six continents to confirm America's growing power in the Pacific and the world.

Roosevelt and his assassinated predecessor, the sainted William McKinley of Ohio (25), were instrumental in acquiring the Philippines as an American colony in the Spanish American War that we kept under our flag until 1947. Indeed, prior to becoming U.S. president, William Howard Taft of Ohio (27), served an uncomfortable term as governor general of the Philippines.

Wm Howard Taft comes ashore in the Philippines.

Two of our military veteran presidents (below), John F. Kennedy (35) and George H.W. Bush (41) actually survived being thrown into the Pacific Ocean during World War II, one from his torpedoed boat, PT 109, the latter from his Navy fighter plane CVN 77 shot down by the Japs.

Nixon's Opening to China

If any president deserves the unusual title of "America's first Pacific president" it would be my late acquaintance, Richard Milhouse Nixon (37), born on the California shores of the Pacific Ocean.

President Nixon with Premier Chou En-Lai (25 Feb 1972)

It was Dick Nixon who, with Henry Kissinger, was the principal author of the "opening to China, " and the Shanghai Communiqué, the agreement that sent scores of American congressmen to China, (including yours truly) to cultivate better relations.

I still have a photo of myself bending down (not bowing) to shake the hand of the very short Deng Xiaoping (dung chow ping) in the Great Hall of the People in what would become bloody Tiananmen Square.

In the week I spent in China in 1979 our congressional delegation was hemmed in by Communist escorts officials. But one bright young Chinese Communist girl guide, who had seen more than her share of U.S. official visitors, had a serious question for us.

In all innocence she asked:: "Is it law that all American congressman and officials come to China?"

Welcome to the Far East, Mr. 44th President of the United States. Kilroy was here before you.

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The Sovereign Society is a recognized voice in the complex offshore world. Join the Sovereign Society and keep informed.

Property Rights Are Civil Rights

2009-11-15T21:34:53-05:00

Several years ago the chairman of the Sovereign Society, Jack Pugsley, in a commentary entitled "It All Starts With Property Rights" wrote the following: The feelings that drive us to defend ourselves against government oppression are an expression of our innate compulsion to control our own property. Each of us shares the feeling that it is unjust and an outrage for our hard-earned wealth to be taken from us without our consent.

Jack went on to observe: The Declaration of Independence suggests that the Founding Fathers sensed this aspect of human nature. It argued that all men "are endowed by their Creator with certain unalienable Rights; that among these are Life, Liberty and the pursuit of Happiness." Life, liberty and the pursuit of happiness, of course, are all aspects of property.

The long train of abuses and usurpations that drove the Founding Fathers to rebel was triggered by the same genes that give rise to your rage when someone burglarizes your home, steals your car or defrauds you. Those genes are equally activated when that attack comes from government.

Kelo v. New London

Jack's sentiments were written two years before the U.S. Supreme Court, in a shocking 5-to-4 decision, greatly expand local governments’ power of eminent domain to take private property for public use. The 2005 case, Kelo v. New London, was one of the most controversial property rights cases in years.

To the surprise of the great majority of Americans, the high court ruled that it was permissible for government to take private property, not only for public use, but to turn it over to private developers as part of a plan to bolster the local economy.

The decision was widely criticized, spurring lawmakers in 43 states across the country to adopt statutes to prevent similar uses of eminent domain in their states.

Joint Power Grab

The situation that gave rise to the Kelo case was a classic example of the little guys falling victim to the combined power of a major corporate business and politicians eager to please that company.

It seems government that bails out banks with trillions of tax dollars, can't keep the same banks and credit card companies from raping card holders, allows financial groups to pay billions in bonuses after getting tax bailouts, also has the right to take our homes and property and give it to political buddies. (See Betrayal for an interesting read)

The city council had created the New London Development Corporation to buy up the nine acre neighborhood and find a developer to replace it with an "urban village" that would draw shoppers and tourists to the area. Supreme Court Justice Clarence Thomas, (below) one of the four dissenters in the case, called New London’s plan "a costly urban renewal project whose stated purpose is a vague promise of new jobs and increased tax revenue, but which is also suspiciously agreeable to the Pfizer Corporation."

Economic development officials in Connecticut used that plan and a package of tax breaks and financial incentives to lure the giant drug company, Pfizer, to build a headquarters for its research division on 26 acres nearby.

With an agreement that it would pay just one-fifth of its property taxes for the first 10 years, Pfizer spent $294 million on a 750,000-square-foot complex that opened in 2001. Scores of citizens who lived in the adjoining nine acre area were forced to sell to the city; their homes leveled, leaving what is now a waste land. Susette Kelo, a nurse, (below) fought for her home all the way to the Supreme Court -- and lost.

Pfizer Scews New London

Last week Pfizer announced it would pull 1,400 jobs out of New London within two years and move most of them a few miles away to a campus it owns in Groton, Conn., as a cost cutting measure.

It would leave behind empty the city’s biggest office complex -- and the adjacent swath of barren land that was cleared of dozens of homes (including Ms. Kelo's) to make room for a hotel, stores and condominiums that were never built.

"Look what they did," Michael Cristofaro, a resident, said. "They stole our home for economic development. It was all for Pfizer, and now they get up and walk "

Scott G. Bullock, senior attorney at the Institute for Justice,a libertarian group in Arlington, Va., that represented the landowners in New London, said Pfizer’s announcement "really shows the folly of these plans that use massive corporate welfare and abuse eminent domain for private development. They oftentimes fail to live up to expectations."

Obama's National Property Grabs

In The Audacity of Hope, his autobiographical exploration of American values and politics, President Obama praised private property as being at the core of our constitutional rights in America.

Yet in a 2006 Senate speech opposing President Bush's nomination of California State Justice Janice Rogers Brown, a an African American and a conservative, to the DC Circuit Court of Appeals, Senator Obama attacked her, saying: "When it comes to laws protecting corporations and private property, she has decided that those laws should be interpreted broadly."

He harshly criticized Judge Brown, saying she believed "...you can't regulate the free market because it is going to constrain people's use of their private property. Keep in mind that same judicial philosophy was the underpinning of Dred Scott, the ruling that overturned the Missouri Compromise and said that it was unconstitutional to forbid slavery from being imported into the free States."

In 2001, then State Senator Obama complained about the civil rights movement’s failure to bring about the redistribution of wealth.

During his 2008 presidential campaign all America saw and heard candidate Obama slip and tell Joe "The Plumber" Wurzelbacher (above) that government needed to "spread the wealth around."

Obama Proposals Confiscate Property

In many ways the Obama agenda seeks to confiscate wealth from earners and give it to non-earners.

The Obama health care bills impose several new taxes. The entire idea behind this "health care reform" is to have those who already have health insurance and are satisfied with it pay for health care for those who don’t want it or can’t afford it.

That single agenda item alone illustrates the Obama administration’s antagonism to our most sacred of private property: our money.

And it is not just more taxes that confiscate our property. Now there is serious discussion about confiscating all private retirements plans, Keoghs, 401ks, Roths -- and dumping them into a government managed scheme.

More Power to Seize

The pending financial regulatory bills Obama has proposed would give the U.S. government broad authority to seize private financial institutions supposedly on the verge of collapse to keep them from harming the economy.

The seizure power would extend to a broad array of financial companies, apparently including private hedge funds as well as bank holding companies. Is it not enough that under Obama the government (taxpayers) have become major owners of General Motors, Bank of America, Citibank et al?

A Different Kind of President

Throughout American history, our leaders have understood that private property rights are key to the survival of the individual.

If you take a person's property, you take away their livelihood. If you take property, you attack their spirit. From the day our nation was born, the preservation of private property has been considered a priority of law.

Through taxes and government controls Barack Obama appears to want to use the law to destroy private property.

This is what he means, when he openly attacks businesses large and small, when he insists that there must be limits on what you can earn and keep and pass on to your family when you pass away, when he makes political deals with insurance and drug companies to get their support for his health proposals.

This president wants his government to control your private property, your income and your assets.

Sovereign Society Credo

One of the basic tenets in the Sovereign Society Credo states: "Every individual has the natural right to keep, control, and dispose of his or her property."

That fundamental natural right is now under serious attack, not just in the parochial New London city council, but in the highest offices of the White House and the United States Congress.

The Passport Book - 7th Edition

The Sovereign Society is a recognized voice in the complex offshore world. Join the Sovereign Society and keep informed.

Why Switzerland Is Still Free and America Is Not

2009-11-12T14:37:09-05:00

My guest columnist today is Ron Holland (left), a long time friend of the Sovereign Society and of our founder, the late Bob Kephart. We often talk about expatriation as a way of escaping from the current mess in U.S. government. Ron suggets secession may be the answer. Ron [send him mail] works in Zurich and is a co-editor of the Swiss Mountain Vision Newsletter.

The American Time magazine article headline asks, "Will Switzerland Vote to Ban Minarets on Mosques?"

Swiss citizens are becoming concerned about the threat that Islam presents to their traditional culture, economy and religious institutions. As an American, I know how I would vote were I Swiss but the decision will be made by the Swiss electorate as they have this referendum right on all issues.

In Switzerland, the people still rule and have the ultimate right to decide decisions above the government or parliament. Through the right of referendum they can cancel legislation and with the initiative they can pass or create legislative action on issues parliament refuses to act upon.

The bias and closed statist views shown in the article is business as usual for the U.S. media elites out to protect the American political establishment and are so evident in this headline and article. It isn’t the question they asked but rather the question they didn’t dare ask is the "700-lb gorilla in the room."

Quoting from the article, "Critics say the SVP, the largest party in Switzerland's coalition government, has taken advantage of the country's unique brand of direct democracy to push its populist, anti-immigrant agenda on the Swiss electorate. Citizens have the right to propose new laws in Switzerland – the only thing they need to force a nationwide vote on an initiative is a petition of 100,000 signatures."

The question not asked is why doesn’t the American electorate have oversight over legislation and unpopular government regulations in the United States like in Switzerland?

Imagine if 4% of the American voters signed a petition requiring a nationwide vote "yea or nay" on the banking bailouts, going to war in Iraq, auditing the Federal Reserve, nationalized health care or on the trillions in new Washington debt added because of the financial meltdown. The United States would still be a decentralized republic with limited government had we had the political option to hold back Washington and the special interests.

How America would be different if we had Swiss-style political rights to restrain government where the people rule instead of the special interests. Imagine an America where the billions in graft and political influence that control Congress could still buy legislation but not ultimate control if we as a people could overrule their actions.

What if the will of the people still ultimately controlled the political system and direction with true limited government at the federal, state and local level?

Imagine the American electorate overriding Congress and demanding a strong dollar backed by real gold reserves, an audit of the Federal Reserve, a rollback of the bailouts, a declaration of war for foreign military intervention, the abolishment of the PATRIOT Act and a return to banking privacy.

Yes, a Swiss political party (The Swiss Peoples Party) promotes a nationalist agenda to the Swiss voters and they will ultimately decide in referendum yes or no on the issue. This is currently impossible in the United States but Swiss direct democracy and limited confederation government have worked in Switzerland for hundreds of years.

This is far superior to the two-party monopoly in America where the elites controlling both parties can push their self-serving agendas without restraint. Currently, short of the Tenth Amendment movement, state nullification or outright state secession, there is no real effective way to push back against Washington.

Until the American people can find a way to restrain the Federal government, the bureaucracy and the judiciary, the best place for Americans to secure and safeguard their wealth is outside their own country.

Switzerland is one of the best jurisdictions to consider because their political system has preserved the rights and freedoms we once had as Americans. Still the ultimate problem for Americans is the necessity to restore our liberties at home because history has shown that wealth without liberty is only a temporary condition at best.

I say, it is time to take a real look at direct democracy in the United States or else Americans who value their property and liberties will have little choice but to first transfer their wealth to safety outside the US as it will be lost in the coming crash of treasury debt and the dollar.

Next we must stand and fight the Washington leviathan through the political tools of the Tenth Amendment and John C. Calhoun’s political ideal of nullification both of which the Feds will probably just ignore. Our final democratic political tool is to exercise the political right of state-by-state secession with all the political and historical baggage this entails.

Trust me, Swiss style direct democracy in the United States would be an easier way to control Washington and the special interests, but we only have a few years before the Washington debt and dollar collapse is upon us.

Therefore I’ll close with a question. Is anybody here for secession?

Copyright © 2009 by LewRockwell.com. Permission to reprint in whole or in part is gladly granted, provided full credit is given.

The Passport Book - 7th Edition

The Sovereign Society is a recognized voice in the complex offshore world. Join the Sovereign Society and keep informed.

Has Anyone Read the Copenhagen Agreement?

2009-11-11T19:22:22-05:00

That was the headline on an alarming commentary in The Wall Street Journal on October 28th. The subhead reads: U.N. plans for a new 'government' are scary.

Americans (and those from every nation) who love their country should indeed read this amazing, alarming document. And when you do read the 181 pages of this draft "United Nations Framework Convention on Climate Change" you’re in for some nasty surprises.

Americans in the Dark

If you haven't heard about it, that's because none of our otherwise talkative political leaders have told us what the drafters have already put together for national leaders to consider and possibly sign at a global conference on "climate change" in Copenhagen Dec. 14 - 21.

Enter Lord Christopher Monckton (below). The UK Conservative Party member and former adviser to U.K. prime minister Margaret Thatcher gave an address at Bethel University in St. Paul, Minnesota, last month that had made quite a video hit.

So far there have been more than one million hits on the YouTube post of his address. It deserves millions more because Lord Monckton warns that the aim of the Copenhagen draft treaty is to set up a super world transnational "government" on a scale no one has ever before seen. He asks the valid question: "Is Obama poised to cede U.S. sovereignty to the UN?" You can guess the answer.

Hidden from View

Lord Monckton himself only became aware of the extraordinary powers to be vested in this new world government when a friend found an obscure UN web site, searched through several layers of links and discovered a document that isn't even called the draft "treaty." Instead, it's labeled a "Note by the Secretariat."

Environmentalist of all stripes from green on down (or up) are demanding that President Barack Obama go to Copenhagen and personally lead the battle for a supposedly cleaner planet and the world government they think is a must.

You will recall that the last time President Obama made a trip to Copenhagen was in October -- his sudden, last minute effort to promote Chicago's 2016 Olympic bid -- only to see his home city fail to even make the first cut.

The Usual Suspects

At last count, about 40 national leaders have said they'll be there, including the hapless British Prime Minister Gordon Brown and the frenetic French President Nicolas Sarkozy, along with scores of politicians from the developing nations that see the possibility of billions in reparations (read more foreign aid).

Although the work of the summit will be carried out by bureaucrats, the mere presence of heads of state in the room in Copenhagen could add momentum to what many see as faltering negotiations.

Obama to the Rescue

German Chancellor Angela Merkel, fresh from an election victory, says she wont be there unless there is a real chance of getting something done. President Barack Obama likewise set conditions for his attendance, telling Reuters on Monday that he would attend if his presence could help clinch an international deal.

My bet is Obama the Orator will be there alright, if only to satisfy his super ego and deliver yet another of those stentorian addresses that many Europeans love.

Read and Act Now

I urge you to view the Monckton video, read the WSJ article and the treaty text , then email your U.S. senators (who have the constitutional power to ratify pr reject treaties, but only by a 2/3 vote).

Let them know that you are mad as Hell and you don't want President Obama to destroy the United States Constitution he and all congressmen swore to uphold.

The Sovereign Society is a recognized voice in the complex offshore world. Join the Sovereign Society and keep informed.

The Price of Freedom

2009-11-10T21:06:58-05:00

I often write about freedom and liberty, but usually in terms of threats to and the reduction of both of these precious commodities.

Tomorrow, Veterans' Day in the United States, is a time for each of us to focus on the price more than a million human beings have paid over the centuries to win and preserve our American freedoms.

And this day should remind us of the need to take up and continue the unending battle in which they gave their "last full measure of devotion."

The first Veterans Day, (then called Armistice Day), commemorated the armistice at 11:00 A.M. on November 11, 1918, ending the bloody First World War in which those American "Yanks" played such an important part.

Armistice Day is the anniversary of the symbolic end of World War I. It commemorates the armistice signed between the Allies and Germany at Rethondes, France, for the cessation of hostilities on the Western Front. The agreement took effect at eleven o'clock in the morning — the "eleventh hour of the eleventh day of the eleventh month".

The Price so far Paid

In America's bloodiest conflict, the Civil War, (or the War of Northern Aggression, as some of my southern friends still call it), many more soldiers died in a few hours at the battles at Antietam Creek, Gettysburg or Fredericksburg than have fallen during the entire Iraq and Afghanistan wars.

But there is a rough and final equality about every one of the dead, from the Revolutionary War and all other wars, right down until this very day.

These Americans, young and old, died before their time, much of their promise unrealized, and in the service of their country. President Lincoln at Gettysburg uttered a string of negatives - "we can not dedicate; we can not consecrate; we can not hallow this ground" - to express our inability ever to understand fully or recognize sacrifice of this degree.

Lincoln's Sage Advice for Us

But Lincoln did suggest that we ought to at least make the attempt to remember, understand and rededicate ourselves to the cause for which they died.

How many Americans today know and understand the history that bought them their freedom?

It's been many Veterans Days since this country felt truly mortally threatened, notwithstanding the current economic difficulties.

The horrors of the 20th century wars are receding into distant memory, though 9/11 and Iraq brought some new ones, as did a Muslim terrorist's insane massacre at Fort Hood, Texas only days ago.

Despite the subsequent wars and security alerts, the call to duty and service remains distant and unreal to too many Americans. Fort Hood and 9/11 help to bring the threat home.

As we enter this holiday season, remember those who have died in the Iraq and Afgan wars these last six years and be reminded that, for some among us, the call to duty was immediate and real. And we should honor that service with our own re-dedication to the principles and the country that so many have given their lives to defend.

As former president and founding father John Adams once said, "You will never know, how much it cost the present Generation, to preserve your Freedom! I hope you will make a good use of it. If you do not, I shall repent in Heaven, that I ever took half the pains to preserve it."

Offshore Freedom

2009-11-05T23:26:13-05:00

Cabo San Lucas, Baja California Sur, Mexico: That's from whence I am reporting today, the second day of the four day Sovereign Society Offshore Advantage Seminar at the Westin Resort & Spa (below).

Located at the southern very tip of Mexico's Baja Peninsula, our resort hotel enjoys a dramatic site at Land's End, high above where the Sea of Cortes meets the Pacific Ocean. Looking out over the blue-green ocean in the late afternoon we have seen huge whales leisurely swimming along with schools of dolphins as escorts. Deep sea fishing is a major sport here.

Los Cabos, as it is known, is unique in its impressive desert landscapes of pinks, reds and browns, its very dry climate, with endless cactus plants framed by cinnamon colored mountains, and bordered by miles of white sandy beach and clear, deep azure waters.

If I sound as if I am an impressed tourist, that's because I am. I have visited other Mexican resorts, Cancun, Puerto Vallarta and Acapulco, but Los Cabos exceeds them all in beauty and unspoiled grandeur.

So much for the location.

Here for Business

There are over four hundred people attending our seminar, including 330 attendees, plus professional speakers and staff. During four days the attendees learn from experts about every aspect of offshore activities -- banking, trusts, family foundations, foreign residence and second passports, investing, currencies and asset protection -- as well as how to comply with U.S. offshore tax and reporting laws.

While many of the attendees are U.S. persons, there are people here from as far away as Switzerland, Denmark, Germany, the Isle of Man, Panama, New Zealand, Australia, Hong Kong, Canada, Austria and many other nations.

Unusual Zeal

Professionals in attendance, attorneys, investment managers, bankers, foreign citizenship advisors -- all have remarked on the palpable air of concern and determination shown by all the attendees. I have seen and heard it in many conversations I have had.

These good people share my fear about what is happening to the United States -- Obama's march to socialized medicine, the ignoring of the Constitution by Congress and the executive, the piling up of trillions in deficit spending -- and these people are determined, for safety's sake, to place some of their assets offshore, if not themselves.

Unparalleled Concern

In the more than 10 years of the existence of the Sovereign Society I have never before seen people at our meetings as determined as these folks are to follow a course of action toward financial and personal safety -- and they mean to act now.

Yesterday the chairman of the Sovereign Society, Jack Pugsley, (left) and I both delivered addresses describing the perilous state of America and the world. Believe me the people here understand the threats to, not just their wealth, but more importantly, to their freedom and the futures of their children and grandchildren.

We made clear once again that we believe that…

Individual liberty is a prerequisite to prosperity.
Liberty exists when every individual has the right to keep, control and dispose of his or her justly-acquired property.
Individuals and their assets are not the property of government.

You Can See & Hear It All

Now, in the past we've made audio recordings available for a fee. But this year, we're doing something completely different.
The management has decided to give you the valuable content of this seminar in Los Cabos FREE… not just for the 2009 Academy - but for every future event we hold.

I have summed up the details in this attached letter. Give it a look. That way, if you're interested, you can get a video/audio copy of all that occurs here at Los Cabos soon after the conclusion of the Offshore Advantage Academy.

World’s Best Tax Haven Is In America, but Unavailable to Americans

2009-11-02T11:47:09-05:00

Our guest columnist today is our friend Daniel J. Mitchell of the Cato Institute, (below) who also will be the keynote speaker later this week at the Sovereign Society Third Annual Offshore Advantage Seminar, at the Westin, Los Cabos, Mexico. Dan writes:

Tax competition is an issue that arouses passion on both sides of the debate. Libertarians and other free-market advocates welcome tax competition as a way of restraining the greed of politicians.

Governments have lowered tax rates in recent decades, for instance, because politicians are afraid that the geese that lay the golden eggs can fly across the border. But collectivists despise tax competition — for exactly the same reason. They want investors, entrepreneurs, and companies to passively serve as free vending machines, dispensing never-ending piles of money for politicians.

So when a left-wing group puts together a ranking of the world’s “top secrecy jurisdictions” in hopes of undermining tax competition, proponents of individual freedom can use that list as a guide to world’s most investor-friendly nations.

The good news is that an American state, Delaware, is number one on the list. And since being a tax haven is a magnet for investment, this is good news for U.S. competitiveness. The bad news is that American taxpayers are not allowed to benefit from many of Delaware’s “tax haven” policies. Here’s what a left-wing columnist in the United Kingdom wrote about the issue:

You’re a billionaire but you don’t want anyone, least of all the taxman, to know. What do you do? Head for a palm-fringed island paradise or a snow-covered Alpine micro-state? Wrong.

The world’s most opaque jurisdictions – the ones that will best shield you and your cash from the light – are mostly in the heart of the most sophisticated and powerful global financial centres. London, Luxembourg and Zurich are in the top five most secretive jurisdictions, according the first comprehensive index of financial transparency ever compiled.

Yet top of the pile, beating the British Virgin Islands, Belize or Liechtenstein as the best place to hide wealth, is Delaware. One of the smallest states in the US, it offers the best protection for anyone who does not want to disclose their identity as a beneficial owner of a company. That is one very good reason why the East Coast state hosts 50% of the US’s quoted firms and 650,000 companies – almost equivalent to one company per Delaware resident. …

Delaware – the political power-base of the US vice-president, Joe Biden – offers high levels of banking secrecy and does not make details of trusts, company accounts and beneficial ownership a matter of public record. Delaware also allows companies to re-domicile within its borders with minimal disclosure, and allows the existence of privacy-enhancing “protected cell” or “segregated portfolio” companies, among many other stratagems useful for protecting the identity of those who do business there.

PS: You can read my comments about Delaware as a tax haven here.

The Passport Book - 7th Edition

If you want you want to discover a new, freedom loving place in which to pitch your tent, deposit your cash or protect your assets, the seventh edition of my best-selling publication, The Passport Book, is now available. You can get your copy now . Here's a sample of the contents.

The Sovereign Society is a recognized voice in the complex offshore world. Join the Sovereign Society and keep informed.

Obama, Democrats Radical Plan to Curb Offshore Freedoms

2009-10-30T14:06:13-04:00

As is well known, for several years offshore tax havens and Americans who dare to exercise their right to engage in legal offshore financial activity, have been under continuing attack by left wing, redistributionist Democrats, including then senator, now President Barack Obama.

Now, with Obama's personal blessing, congressional Democrats have introduced a radical legislative proposal that would give the U.S. Internal Revenue Service (IRS) new weapons to "detect, deter and discourage" the use of foreign bank and other financial accounts that might be used for avoiding U.S. taxes.

The questionable basis for this latest leftist assault on Americans' personal and financial privacy is the unproven allegation that millions of Americans are evading billions of dollars in taxes by hiding cash and activities offshore.

I have commented on these phony numbers games before. These repeated charges amount to what Josef Goebbles called "the Big Lie".

FACTA

The Foreign Account Tax Compliance Act, (FACTA)introduced in The U.S. Senate and House on October 27, blends proposals in President Obama’s 2010 budget, as well as Senator Carl Levin's (D-Mich) infamous"Stop Tax Haven Abuse Act" and legislation drafted by Senate Finance Committee chairman Max Baucus (D-MT) earlier this year.

It is co-sponsored by Sen. Baucus (D-MT) and the tax-dodging House Ways and Means Committee Chairman, Charlie "I forgot" Rangel (D-NY), (left).

Under this extremely punitive bill, all foreign financial institutions, banks, foreign trusts, private foundations and foreign corporations could be forced into providing information about U.S. account holders, trust grantors, and American owners associated with these legal entities.

As if they did not exist, the legislation totally ignores the current extensive reporting requirements of federal law that already apply to all such entities.

Go After The Rich

This week IRS Commissioner Doug Shulman also announced a stepped up campaign against high net worth individuals he thinks are engaged in interna (below) tional tax evasion. "We will take a unified look at the entire web of business entities controlled by a high wealth individual," Shulman said "The IRS high wealth unit will focus on trusts, real estate investments, privately held companies and other business entities controlled by rich individuals."

The U.S. government served subpoenas on wealthy individuals in recent days in the New York area, targeting those who may have evaded taxes using offshore accounts at Swiss bank UBS.

30% Tax on Offshore Banks

If enacted the FACTA would impose a 30% withholding tax on payments to foreign financial institutions and other entities unless they acknowledge the existence of offshore accounts to the IRS and disclose relevant information including account ownership, balances and amounts moving in and out of the accounts.

With its usual guess work, the Congressional Budget Office (CBO) claims the legislation would bring in an additional $8.5 billion in taxes over a 10-year period, (a far cry from the supposed $100 billion a year Levin repeatedly claims is lost to alleged offshore tax evasion).

Obama All for It

In a canned statement from the White House President Obama, who during his campaign said he favored "spreading around" other Americans wealth, said: "The legislation introduced today would put a stop to billions of dollars worth of abuses. I look forward to working with Congress to turn these proposals into law so that honest Americans no longer shoulder the burden of the few individuals and businesses that put profit before responsibility."

If you want to dig into the gory details of the new proposal, you find the text of the bill here and its technical description here. They both make freightening reading.

Peeved Levin Reacts

This slightly less radical legislation does not have the endorsement of Capitol Hill's leading anti-tax haven demagogue, Sen. Carl Levin (D-MI), (below) who said he doesn't think the bill goes far enough.

That may be because it omits the ridiculous blacklist of scores of nations included in Levin's Anti-Tax Haven Act, as well as many punitive anti-tax haven powers his bill would have given to Treasury Secretary Timothy Geithner. The tax dodging hypocrite Geithner, who failed to pay taxes for several years until he was named to his post, praised the bill.

The die-hard Levin told reporters: "When their committees move to markup, I hope to work with my colleagues to strengthen the Baucus-Rangel bill by adding some of the measures from the offshore tax bill I’ve introduced."

Offshore Reaction

As a result of numerous anti-offshore policies of the IRS and the Obama administration, as well as the UBS bank scandal, many Swiss and other offshore banks have closed existing accounts of Americans and have turned away new U.S. applicants.

Switzerland's oldest bank, Bank Wegelin in Saint Gallen, was typical in not only confirming its "no Americans" policy, but in announcing it would not longer invest in American investments for itself or its clients.

Another Freedom Destroyed

One can only guess what may be the reaction of offshore bankers to the threat of a 30% tax to force release of client information that would clearly violate Swiss bank secrecy laws, as well as financial privacy laws in many other countries such as Panama, Austria, Singapore and Hong Kong.

If this bill becomes law, it may well block the ability of all Americans to bank offshore, simply because no offshore bank will put up with these unprecedented bullying tactics by the IRS. There are plenty of other people of wealth whose governments do not think they can impose their rule on the entire world.

Stay tuned for developments.

The Passport Book - 7th Edition

The Sovereign Society is a recognized voice in the complex offshore world. Join the Sovereign Society and keep informed.