Tuesday, December 22

Obama's $100 Billion Lie (Attacking Tax Havens)

Democrats, Including President Obama, have been claiming that the US loses about $100 Billion in tax revenue due to tax havens each year:
Levin, Coleman, Obama Introduce Stop Tax Haven Abuse Act (S. 681)

Bill targets $100 billion in lost tax revenue each year from offshore tax dodges

WASHINGTON – Today, citing $100 billion in revenue drained from the U.S. Treasury at the expense of honest, hardworking American families who pay their fair share, Sen. Carl Levin, D-Mich., Sen. Norm Coleman, R-Minn., and Sen. Barack Obama, D-Ill., introduced comprehensive legislation to stop offshore tax haven and tax shelter abuses.

For more than four years, Levin and Coleman, the Chairman and senior Republican of the Permanent Subcommittee on Investigations, have led an in-depth Subcommittee investigation into offshore tax havens, abusive tax shelters, and the professionals who design, market, and implement these tax dodges. Experts have estimated that the total loss to the Treasury from offshore tax evasion alone approaches $100 billion per year, including $40 to $70 billion from individuals and another $30 billion from corporations engaging in offshore tax evasion. Abusive tax shelters add tens of billions of dollars more. - US Senate
There is just a small problem. The actions that the President and Senator Levin are planning will do little to collect the money lost to tax havens. Interestingly enough, the Government itself is the one stating so:


Politicians who like higher taxes would like to shut down so-called tax havens so they can set up an "OPEC for politicians" and implement higher tax rates. Yet since all the evidence shows that low-tax jurisdictions are very beneficial for the global economy, the politicians often resort to dishonest demagoguery. This educational video from the Center for Freedom and Prosperity debunks President Obama's two most common smears against tax havens. www.freedomandprosperity.org - YouTube

Here is the section in the Treasury document noting how much the Government would recover by implementing legislation to stop tax abuse.
Cracking Down on the Abuse of Tax Havens by Individuals: Currently, wealthy Americans can evade paying taxes by hiding their money in offshore accounts with little fear that either the financial institution or the country that houses their money will report them to the IRS. In addition to initiatives taken within the G-20 to impose sanctions on countries judged by their peers not to be adequately implementing information exchange standards, the Obama Administration proposes a comprehensive package of disclosure and enforcement measures to make it more difficult for financial institutions and wealthy individuals to evade taxes. The Administration conservatively estimates this package would raise $8.7 billion over 10 years by: (click the link for the measures) - Leveling the Playing Field: Curbing Tax Havens and Removing Tax Incentives for Shifting Jobs Overseas, US Treasury (TG-119)
Given this information, then either the President's $100 Billion figure is completely wrong or the measures that they want to put in force are a complete waste of time because they are ineffective given the amount of the $100 billion they think they can recover.

Worse, it could be that they eliminate close to $100 Billion in yearly economic activity in order to collect $870 million a year in taxes. This would simply be a joke, other than the economic damage it will probably unleash in it's wake if ever passed into law. One question I have is how many more jobs do they plan to kill off with this little jewel of legislative vindictiveness.

And you can be that they plan to do nothing other than to buy votes with whatever money they do manage to collect!

IRS Commissioner Exposes Senator Levin's $100 Billion Lie

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