News Article & Commentary:  Recent initiatives by the OECD and US Government directly have placed increased pressures on the many so-called tradional tax haven jurisdictions.  Many places, such as the Bahamas, Cayman Islands, and Belize have capitulated to such pressures and seem to exiting the business of providing a safe domicile for those that wish to incorporate or do thier banking offshore.  Does this mean the end of tax free banking or tax haven jurisdictions?  While some of these comments are disappointing, there is a silver lining...
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 John Schroder, of Ascot Advisory Services, writes for a number of on-line and print publications, in addition to his popular Weekly Update news bulletin.  The following article was reprinted from either the weekly update news bulletin, or is an aritcle which may have appeared in another on-line or print publication written by him . 
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The Weekly Update news bulletin offer news and commentary regarding a number of issue which are of interest or concern to clients.  Such topics may include offshore company formation, trusts, banking, investing, real estate, expatriate matters, residency & second passport matters, and other topics concerning the Dominican Republic & Panama.
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The New Cold War: Worldwide Tax Collection 
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If you have ever read the book 1984 by George Orwell, you will remember that one of the ways the fictional government from the story kept local citizens “in check”, was by constantly creating new enemies, be they real or not.  After all, when people know there is a greater threat from beyond their borders, they tend to “rally around the flag” and forget about domestic troubles (they also tend to stop critiquing the local government in the name of being “patriotic”).  Politicians know this all too well, and often use this idea to boost their “public approval” ratings from local citizens.  Not too long ago there was an American film with exactly this theme, whereby the folks at the White House and Hollywood got together to stage a fake war.  This was all done of course just to boost the public polling ratings of the US President portrayed in the film.  Was it just an entertaining film, or is it true that art does imitate real life?
Well assuming we have some new enemies to watch out for, the real question at hand is, who then are the new enemies of the United States, and its allied countries in Western Europe? 

Well, we know the Soviet Union is gone, replaced by a new nation called Russia.  They have enough of their own economic problems at the moment, never mind being concerned about “world domination”.  The “Communist Chinese”, what about them?  Well, the US has publicly criticized the leadership in that country for mistreating its citizens and “human rights” violations, yet the US government continues giving them “most favored nation” trading status.  What can we say about the “communist” government in Vietnam?  Well, they seem to be “OK” now, and the US has re-established both diplomatic and economic ties with them.  In fact, the only “bad” communist left in the world is Fidel Castro, and the Canadians & Europeans both don’t seem to have a problem with him, just the Americans (although that is slowly changing too, at least recently anyway).  So, who are the new bad guys and where did they come from?  In other words, what is the new “Cold War”?

Well, the new bad guys were always there.  That is to say they did not just “pop up” over-night, nor did they just come off they assembly line from the “bad guy factory”.  No, what has happened is, they have been now promoted to super villain status.  I suppose, for them, a rare honor indeed.

So, who the are the new super arch villains of the world?  Well, for starters, we are lead to believe that hoards of people involved in the processing or distribution of illegal drugs have appeared out of nowhere suddenly.  In addition, or coupled with that, seems to be an incredulous number of people involved with “money laundering” activities.  So much so in fact that new regulations have been passed to address this new and grave threat to the “democratic way of life”.  Of course with regards to drugs, even a new “drug czar” post was created by the office of the President of the United States to attend to this matter personally (must be pretty serious stuff to have their own department).

Just as often in the case of “wars” or conflicts, innocent third parties get dragged in, whether they wish to or not.  So, as a result, those viewed as “aiding and abetting” the new super arch villains have also been caused to suffer “the slings and arrows of outrageous fortune”.  Who are they?  Well, other countries around the globe that all seemingly have a few things in common (the scoundrels).  Countries that have lower or zero tax rates, and regulations about things like privacy of one’s personal affairs in banking.  Countries such as the Bahamas (you can’t fool us with those fancy shorts, banana daiquiris and cute accents, we know what you’re up to).  Other jurisdictions, such as Panama, have also been mentioned on the “aiding and abetting list” (those Panamanians must be guilty of something, after all, they speak Spanish for god’s sake).  In addition, we have other “bad guy” supporting countries like Cyprus and Malta (any country that grows olives cannot be trusted, unless of course they have the same tax rates we do, like Greece for example).  Among this long list let us not forget the most heinous of all countries, a tiny group of islands in the South Pacific that most people cannot even pronounce, never mind spell.  In this case, apparently anyone that wears a loincloth, and fishes with a spear is, to be kept under extra special close watch by the “good guys”.

Every war also has its groups of refugees or misplaced casualties of war as well.  They could be the people or soldiers on the front line, but often enough this group consists of average citizens just “caught in the cross fire”.  When the old “cold war” ended, it was of course the “soldiers” that found themselves “out in the cold” literally.  People like “secret agents”, CIA & MI5 guys, the intelligence community, or what can be also termed “spooks”.  With no enemy remaining to fight, most found them-selves out of work.  Well, lets face facts, one needs some time to find new work for employees that have been “laid off”.  In other words, one needs time to find a new war and a new enemy (they are not so easy to come by you know, you need time to be creative and think them up).  Many of these people departed from government service to work in the private sector, becoming security analysts or using their skills to work as a “corporate spy”.  The “Russian Mafia” of course has recruited many of the former KGB agents (and why not, the pay is probably better and they get weekends off too).

That’s all fine and well, but who then are the refugees from this new “cold war”.  Well, unfortunately, they are the average hard working citizens caught in the middle.  I think the army calls it “collateral damage” (it is not politically correct to say that innocent civilians were killed or hurt, they say there was “collateral damage”).  That is to say, those subject to “collateral damage” are the middle class people that go to work every day, run their businesses, pay taxes, and generally do all the things a good citizen is supposed to do.  Most do not even realize that they are being victimized because of a war, or in the name of a war.  After all, there are no food shortages or bombs falling from above, as might possibly be the case in a conventional war.  And the reasons for the war, seem sound enough.  After all, who wants to say that the “Bad Guys” shouldn’t be apprehended or punished?  Who wants to say they do not support the war against a dangerous foreign enemy? And it is of course directly called a war by the politicians and press, so using the word “war” is not a stretch or poetic license.

No, the victims only realize all of this when something happens to them personally to make them understand the ramifications of it all.  During World War II, there was food and gasoline rationing, so every citizen was directly affected by the “war”.  The new “cold war” is a different story.  That is to say, many sacrifices for the war are not so apparent or clear in everyday life.  But, when they become clear, they become very clear for the people affected.  Things like having to provide a thumb fingerprint when cashing a check at the bank (when cashing a check someone gave you, at the bank where you do not have an account and where the check was drawn from).  It would seem photo I.D. or Drivers License is not good enough anymore.  Things like having to provide complete personal I.D. and tax number information when sending $ 50 to your “Aunt Bess” in another city via Western Union, or when purchasing American Express Traveler checks for an amount higher than $999. I suppose it makes sense that the purchase of  $ 1,000 worth of Traveler Checks does need to be reported immediately to the Treasury Department (in order to fight the war on drugs & money laundering).  After all, it would appear to be true that many drug traffickers do buy American Express Traveler checks when going on vacation, or so I am told (Carl Malden was indeed an effective spokesman for American Express, hitting across all demographics).

There are other things too, like seeing your civil liberties taken away one by one.  Judges in the US, for example, have declared that personal property or possessions are not covered under either the constitution or bill or rights with regards to undue search and seizure regarding having due process of law first (before they take your stuff).  It has been ruled that only human beings have rights, but that the personal property of those human beings, of course do not.  Kind of like saying a human being has no color, only their skin has color.  Therefore, a human being cannot legally complain about any form of discrimination on behalf of their skin (the skin must do the complaining, as only the skin was the party affected).

The interesting thing about a war is that it usually is about something other than what is being stated.  The Gulf War?  That was about whom gets to control the oil, not about righting a wrong for a small country.  If you really believe the latter, then why hasn’t the “coalition” of “good guys” helped out the nations in Africa that have been invaded by neighboring countries?  I will tell you why, no oil.  Why haven’t they stepped in right away when one country invaded the other in former Yugoslavia?  No oil, plus the Yugo was not a top seller in America.

The new “cold war”, well that’s about taxes, nothing but taxes.  It is also very much so about regulating and controlling the “money”.  This was never a problem before because it was only a few very wealthy people in the past that got involved with things like offshore trusts, and so on.  Wealthy people that were also in a position of power and influence, so not much was said or done.  What is the story today?

Well, the “middle class”, are the “refugees” who are leaving in droves (with their money).  They are leaving Canada, Australia, the US, and a number of other “high-tax” countries in Europe.  They are leaving places where they are taxed to death, and are tired of supporting social welfare or other programs they do not agree with.  It would create an outcry for any democratic government to say its citizens cannot leave or move about freely, so they simply prefer to say that their money cannot leave. Remember that money or material goods have no rights, or have no exemption from being incarcerated unfairly, so we are now told.

Every war also has its famous heroes, and of course famous battles.  The latest battle lost (or won, depending which side you are on), is of course the Bahamas.  You could see it coming for some time if you wanted to look hard enough.  Well, at least they still are famous for short pants, which is nice.

 

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