Understand that the Sovereign Society was founded over a decade ago in order to promote greater personal financial freedom and privacy. We recognized that Americans were forced to look offshore for the freedoms and privacy that once, but no longer, are guaranteed in America.
In the past, Americans have had relatively unfettered access to offshore jurisdictions, required only to report offshore accounts or activity to the IRS and the U.S. Treasury; no currency controls, few government restrictions.
It's not my business to endorse candidates for public office, but as an officer and senior writer for an organization well known for promoting offshore financial freedoms, I feel compelled to alert our members and readers to the starkly different views of the two U.S. presidential candidates.
Stark Differences
Senator John McCain (R-AZ), a relatively free market advocate, proposes no threats to our offshore freedoms.
Senator Barack Obama (D-ILL), on the other hand, (the most far left-wing member of the U.S. Senate, based on his three-year voting record), is an active and vociferous enemy of offshore freedoms. Indeed, he has gone out of his way to create a false straw man of alleged offshore tax evasion, which he repeatedly attacks in his campaign speeches.
Based on his words and actions, Senator Obama appears to believe that anyone exercising the freedom to engage in offshore banking or other financial activity is automatically suspect of tax evasion.
Obama is a co-sponsor of "The Stop Tax Haven Abuse Act," S.681, deceptively entitled: "A bill to restrict the use of offshore tax havens and abusive tax shelters to inappropriately avoid Federal taxation, and for other purposes."
Among the enormities in Obama's legislation, the bill creates an unprecedented "blacklist" of 34 offshore jurisdictions presumed to be tax evasion sites, (including even Switzerland and Panama). His presumption is based only on the fact these places enjoy financial secrecy guaranteed by law. Obama's legislation gives the U.S. Treasury free reign "to take special measures against foreign jurisdictions and financial institutions that impede U.S. tax enforcement."
It also requires all U.S. financial institutions to report to the IRS any offshore financial activity by clients and impose taxes on offshore trust income used to buy real estate, artwork or jewelry for U.S. persons.
And that estimate does not take into account the numerous violations of legal and constitutional rights the bill embodies. That includes the provision which presumes all offshore financial activity equals tax evasion unless an individual can prove otherwise.
This bill also effectively trashes the Fourth Amendment, which guarantees against illegal searches and seizures.
Obama's Own Words
For those who have written to me and tried to down play Obama's radical anti-offshore proposals, consider his own words.
In a speech in Montgomery county, Pennsylvania on October 3, 2008, Obama repeated a riff he often uses: "My opponent supports tax havens that let companies avoid paying taxes here in America - tax havens that cost $100 billion every year. But what will work is shutting those tax havens and closing corporate loopholes. My opponent supports giving tax breaks to companies that ship jobs overseas. But what will work is giving those tax breaks to companies that create jobs here at home."
The major fallacy, aside from the unjustly imputed mass tax evasion, is the use of the fictitious $100 billion number. There is absolutely no proof of such allegedly widespread tax evasion, and the unproved number has been a staple of anti-tax haven attacks by opponents such as U.S. Sen. Carl Levin (D-MICH), the chief sponsor of Obama's bill. Obama offered zero proof for this wild number and even IRS Commissioner Mark Everson does not endorse this fantasy.
Foreign Leaders Disturbed
Leaders of the world's offshore financial centers are concerned about what will happen if Obama becomes president. They think Obama's proposals could do serious economic and political harm to their jurisdictions and their peoples.
This week John Kephart, president and CEO of Capital G Bank in Bermuda, raised fears about Obama's threats to shut down tax havens and such as Bermuda with his legislative hit list. The Prime Minister of Barbados, David Thompson, and other Caribbean Community (CARICOM) leaders have complained about Obama's radical ideas because they fear he will undermine their offshore financial sectors that annually contribute hundreds of millions of dollars to their treasuries. The offshore sector also provides employment for thousands of banking and legal professionals.
Across the Atlantic Ocean, Isle of Man Treasury Minister, Allan Bell, warned that offshore financial centers would face unwanted new pressures if Obama becomes president.
Prime Minister of St. Kitts-Nevis, Dr. Denzel Douglas, said: "Blanket statements and blanket laws passed in the United States Congress can have serious, very serious effects on the continued growth and development of Caribbean economies. He needs to be educated. His advisers need to be engaged in a dialogue so they can appreciate what our interest is and how his policies and programs are going to affect us in the Caribbean."
It should be added that in the current world economic turmoil, the last thing needed are Obama's strange nostrums that would disrupt seriously legal world capital flows and established available investment avenues.
A Lot to Lose
As a reminder of what Americans have to lose under Obama's anti-offshore proposals, here's a list of endangered rights:
* It is legal to have and use an offshore bank account.
* It is legal to invest offshore in stocks, bonds and other investment properties.
* It is legal to create and donate assets to an offshore asset protection trust or family foundation.
* It is legal to form and operate an international business corporation (IBC).
* It is legal to purchase offshore life insurance and annuities that allowed deferred taxes.
* It is legal to invest in offshore mutual and hedge funds, precious metals and real estate.
* It is legal to acquire dual citizenship and a second passport.
* It is legal voluntarily to end U.S. citizenship and thereby remove yourself from the U.S. tax system.
Some serious things for you to consider before you cast your vote.
PS: Setting up your offshore plan takes time and effort. And that's why we at The Sovereign Society started the Offshore Advantage Academy two years ago. To bring some of the biggest names in offshore banking together in one place and make it easier for our members to access all the benefits of the Offshore World. Join me and The Sovereign Society's Council of Experts in sunny Cancun, Mexico to learn everything you need to know and to get the ball rolling on your offshore plan as soon as possible. Enroll before October 13th and receive a special discount.
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