By: Mike Renzulli
During July of this year, the Arizona Republic reported that a Scottsdale woman was indicted for trying to evade federal banking deposit rules. After Lucy Lu took over $300,000 from her massage business, she hid over half of the money in a safe in her house and then made small deposits with the rest into her mother's bank account. Aside from the obvious question of: "who cares what this woman does with her money?" there's a bigger issue here: When (not if) the economy here goes down the tubes, it may give Americans an incentive to look for jobs elsewhere.
A number of government actions have accelerated this process: new passport requirements enacted by the State Department (for Americans traveling to Mexico, some Caribbean islands and Canada); the legalized monitoring and tracking of citizens resulting from the USA PATRIOT Act; and National Guard troops stationed at the U.S.-Mexico border and in our nation's airports. As these things continue, the ability to leave the U.S. will be made even harder, and I'd dare to argue the stage is set for the time when the U.S. government can forcibly keep Americans in the United States.
If people here decide to up and leave – either for more prosperous parts of the world, or simply because their dollars would do better in countries like Mexico or Canada – the U.S. government will have ample time and resources to legally stop them. If you withdraw money from your account, as Lucy Lu did, the feds can then flag your profile on their terrorist watch lists, and hold you up at your point of departure. Younger people could also be prevented from leaving as well, since fewer young people means not only fewer potential long-time taxpayers, but the loss of someone who could produce future taxpayers.
Unfortunately, the threat of this happening is real. According to Author Jim Peron, who recently moved to Germany, a new federal law now targets non-U.S. banks. Essentially, the law states that if the U.S. government claims an American holder of an account in a foreign bank has done anything that the feds deem illegal, the bank itself has violated the law – even if the act committed (or allegedly committed) by the U.S. citizen took place well after the account was open. Simply on the U.S. government’s say-so, the bank is now considered a co-conspirator with that U.S. citizen, and all assets owned by the bank and held in the U.S. may be confiscated. The net result, of course, is that foreign banks are now refusing to open accounts for Americans. Even the Swiss, who once took anyone's money, won't open accounts for U.S. citizens anymore.
At the beginning of August, the New York Times reported that a U.S. Senate Committee had held a hearing and adopted a report submitted by Democrats, in which Carl Levin of Michigan gave a long speech about people and corporations who cheat on their income taxes with investments that just happen to be located offshore. In their lust for more of people's hard-earned money, politicians continue to look for ways to "close the loopholes" on people or organizations seeking to avoid the U.S. income tax system, by locating in countries with either minimal tax and regulatory enforcement or existence outside the I.R.S.’s jurisdiction.
With economic hardships coming down the line – due to the enormous amounts of money created by the Federal Reserve’s printing presses as well as the ballooning federal debt and deficits – it's no surprise that this kind of hearing is held, especially since the Chairman of the committee is a Republican accepting a Democrat-backed report. Rather than close the U.S. directly for migration out of the country, it seems clear that politicians and bureaucrats will now look for ways to extract more of your income, making it harder for people and companies to leave. Instead of admitting their own policies are a failure, they will instead demonize people and entities located outside the United States, labeling them as "tax cheats," and then re-write the tax laws to crack down on them further.
Those who advocate "securing our borders" would do well to keep these points in mind. If North Korea is any example, the powers granted to the federal government can be used, not only to keep people out, but also to keep you in.
Mike's webblog: http://freelibertarian.blogspot.com