Congress Imposes Huge Tax on Global Business and Investment
Starting July 1, every international business and investment in the world is going to feel the full weight of U.S. tax law directly or indirectly.
It is all part of the Congress’s long-time policy of making international business — referred to derogatorily as offshore — the scapegoat in order to accomplish two goals: blame somebody who can’t fight back for their astounding political failures, while giving cover to a vast expansion of government control over every taxpayer’s life.
You say, “What’s wrong with all those offshore tax cheats paying their fair share?”
Let me understand this. Are you claiming that hundreds of thousands of Americans woke up one morning and decided that they could not live another day unless they had an offshore financial account so they can evade the income tax?
Apple, Microsoft, Caterpillar and every other multinational company of which your pension plan is likely a shareholder (and their armies of accountants, lawyers and bankers) intends to criminally evade taxes?
The consequences of this foreign account tax compliance are essentially a colossal cost increase on everything in the world. A tax. And you are going to pay your fair share of it whether you realize it or not.
When any business figures out a price to charge, it includes the amount of tax it’s going to pay. Hence, the term earnings per share after tax. Businesses also include as a cost of doing business the accounting fees involved in tax compliance, the legal costs, lobbying costs and all the other fees, commissions and expenses that are incurred in dealing with the labyrinth of the current tax law. Especially, when dealing with tax law of dozens of other countries that also fervently want a piece of the action.
Why would Congress want to do this?
Because Congress insists on a tax code of such grotesque complexity that it easily enables them to conceal all the goodies they dole out to special interest voting groups and their crony campaign contributors.
They can do this while making the populist appeal to the electorate that their tax burden would be less if the offshore financial account holders paid the tax instead.
The reality is that the tax burden on U.S. taxpayers will not go down. Congress is even now making their annual claims of more tax reform, while planning new and even more devious ways to raise your taxes.
The enormous amount of costs to be incurred by the financial industry — in the United States and globally — and all their customers because of new foreign account tax compliance regime, an amount so vast and still unknown that it can’t even be calculated, will be added to the price of everything that moves or is tangential to global business and investment.
And you will be paying it.