Willie Sutton was once asked why he robs banks. His response was simple “Because that’s where the money is!”
Given the infinite wisdom of Senator Max Baucus, Representative Charlie Rangel, and Senator Harry Reid we are about to embark on a world wide search for money.
Introduced to Congress on October 27, 2009 and signed into law on March 18, 2010, The Foreign Account Tax Compliance Act (FATCA) is about to impose penalties for noncompliance beginning July 1st, 2014.
This has the distinct smell of a new agency, such as the Energy Department, which will employ thousands and become mired in a governmental process for decades to come.
In search of funds to redeploy in our governmental giveaways and our military adventures, we are requiring foreign financial institutions including banks to identify, report and even collect taxes due on deposits, investments, etc. by US citizens (I am most certain that Vladimir Putin will be overly cooperative with this plan).
This program is the typical program the governmental bureaucrats love to extol. The revenue believed to be raised will be approximately 800 million dollars per year for the US Treasury, not even a weeks worth of TAPER. However, the cost of people, technology, travel expenses, investigative follow-up, etc. etc. etc., all government documented of course, has been estimated to be over 10 billion dollars. Money coming in versus money going out. Another governmental winner right out of the chute. After all we will go to the ends of the earth to find tax revenue whether we know it’s there or not.
Willie Sutton had a better way. He didn’t think the money was there (in the banks) he knew it was there.
Therefore, the common sense thing to do is not to create another bureaucratic agency costing billions of dollars, accomplishing nothing and creating more international intrigue on the ifcome that money is there. The simple answer is to impose a flat tax on all corporations irrespective of where their money is domiciled because that money we know is there.
Apple and others would not have to borrow funds to buy back shares to support their stock prices. They would simply use the cash available after they’ve paid the tax man. This approach would make GE and others start actually paying on what they’ve earned. A novel concept.
As for a new agency it would not be necessary. After all if the IRS has time to focus on conservative/tea party groups then it should have more than enough time to collect from the corporations who have told us exactly how much money is overseas. This kind of tax reform makes total sense but does create one problem. The politicians on both sides of the aisle would stir the ire of the corporate CEOs and more than likely see a dramatic falloff in their campaign contributions.
Given the potential of all this happening is somewhere between slim and none, no one should hold their breath in anticipation of real corporate tax reform.
Willie Sutton is rolling over in his grave. He would tell Harry and the boys “go where the money is”. But of course that won’t happen, therefore:
Let the game of hide and seek (FATCA) begin!