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The Stop Tax Haven Abuse Act.

By Rob Lambert - Email Editor

Date : 22-Feb-2007

Dear Subscriber:

Here we go again!

Three senators, Carl Levin, Norm Coleman and Barack Obama (boy, I am watching him and like much of what I see!) proposed a new tax act called The Stop Tax Haven Abuse Act. According to a summary, released by Senator Levin, the purpose of this bill is to target what they say $100 billion a year in tax revenue is lost because of overseas tax havens.

This bill is a redo of one which recently failed. In this politically charged election climate, this new bill may have a better chance.

You will be hearing a lot about it. I think it is important to understand what it is, and what it is not.

I was interviewed by Senator Levin’s staff who were preparing the first draft of the bill. We spent hours together discussing what the crooks out there were doing, and how they were doing it. It is critical to realize that this bill is not an indictment of the offshore banking world or internationalism. The people behind this bill have no problem at all with legitimate offshore businesses, bank accounts or tax planning (including Asset Protection Planning). They specifically have no issues with Asset Protection Trusts designed as tax neutral grantor type trusts where all income is fully disclosed and taxable.

The folks behind this bill have serious trouble with the multitude of phonied-up non-grantor trusts and offshore corporations designed to illegally evade tax. Now, I am bracing for a load of hate mail because it comes as soon as I say something like this. Somehow, there are still a lot of U.S. citizens who think that if they put their money in an offshore corporation it is no longer taxable in the USA. Wrong. I have explained many times why; however, they can’t seem to get this out of their mind. These are the folks this bill is after.

My problem with this bill is not its purpose.

My problem is simple:

I ask if it is really necessary?

First, we already have the Patriot Act. This forces any self-respecting bank which wants to have a correspondent relationship with a U.S. Bank (necessary to use the Fed Funds system) to “know their clients” (a nice way to say have confidence that they aren’t crooks) and “share information.” Why do we need more? I don’t think we do.

My second problem with this bill is that I will now be barraged by a ton of email newsletters from the doom and gloom promoters announcing that international is dead and deadly. If you touch an international product or bank account prepare for financial death, jail and lots of crap like that. Well, don’t believe it. The international world is alive and more robust that ever. Write off the doom and gloomers as short sited fools.

I also don’t like the bills that focus on 38 countries which have strong bank secrecy. What the framers of this bill miss is that these countries, which include Switzerland and Singapore, already share complete tax info with the U.S. Authorities. Our problem in the USA is that we aren’t analyzing and processing the data; but, for heaven’s sake, we already have it.

So, do we really need more governmental legislation on things international? Time will tell. I say no.

I will keep you up to date with the status of this bill.

Have a healthy and protected week.

Rob Lambert

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