British banks revolt against Obama tax plan

Sun May 24 11:26:56 PDT 2009

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The following article is a story of financial repression, pure and
simple.

Tax "slavery" is nothing new; taxation itself being legalized theft, the
very existence proof of subjugation to any so-called "sovereign"
throughout
history.

In various forms, the U.S. has had an official policy of universal
taxation
of individual income and assets for more than a hundred and fifty years.
Since the advent of income taxes, "any source whatever" has been the
rule,
with no exceptions, no matter where in the world that source exists. The
telegraph made it conceivable. The Hollerith card made it possible. The
electronic computer made it profitable, and ubiquitous global
internetworks
now make it inescapable. Financial cryptography once held out hopes of
changing the rules of the game, but the chance of, shall we say, hope
and
change, diminishes daily on that front.

As we're seeing below, when universally networked book-entry settlement
permits a geographic force-monopoly to forbid, defacto, a human being's
rights to ownership of financial assets outside its borders,
accelerating
its already asymptotic claims to an otherwise free peoples' income and
private property as its own, it's an act no less repressive than
installing
a concertina wire fence at the border and giving the guards orders to
shoot
to kill.

Immediately, if this kind of policy is not rescinded somehow, I expect
that
except where a US bank is already present in a country, many US citizens
abroad wil become "unbanked".  That might not be a bad thing, if it
accelerates the advent of the kind of global non-bank finance that
cryptographers have presaged --  for almost twenty years now.

However, since the US government has pretty much outlawed non-bank
finance
inside its own borders, and seems to be in the process of outlawing the
private ownership of banks themselves, things might get much worse
before
they get any better.

Cheers,
RAH
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<http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/5374095/Br
itish-banks-revolt-against-Obama-tax-plan.html>

Sunday 24 May 2009 | Banks and Finance feed | All feeds

The Telegraph

British banks revolt against Obama tax plan

British banks and stockbrokers may refuse to take on American clients if
new international tax proposals outlined by President Obama are passed.

By Louise Armitstead
Last Updated: 12:02AM BST 24 May 2009

The decision, which would make it hard for Americans in London to open
bank
accounts and trade shares, is being discussed by executives at Britain's
banks and brokers who say it could become too expensive to service
American
clients. The proposals, which were unveiled as part of the president's
first budget, are designed to clamp-down on American tax evaders abroad.
However bank bosses say they are being asked to take on the task of
collecting American taxes at a cost and legal liability that are
inexpedient.

Andy Thompson of Association of Private Client Investment Managers and
Stockbrokers (APCIMS) said: "The cost and administration of the US tax
regime is causing UK investment firms to consider disinvesting in US
shares
on behalf of their clients. This is not right and emphasises that the
administration of a tax regime on a global scale without any flexibility
damages the very economy it is trying to protect."

One executive at a top UK bank who didn't want to be named for fear of
angering the IRS said: "It's just about manageable under the current
system
- - - - and that's because we're big. The danger to us is suddenly being
hauled
over the coals by the IRS for a client that hasn't paid proper taxes.
The
audit costs will soar. We'll have to pay it but I know plenty of smaller
players won't."

The British Bankers Association (BBA) and APCIMS had a meeting with
European counterparts 10 days ago to discuss the crisis. A delegation is
set to meet the US Treasury's Internal Revenue Service on 16th June to
demand they drop the reforms.

Ahead of the meeting APCIMS, whose members manage #400bn of Britain's
wealth and employ 25,000 people, has sent a letter to the IRS
complaining
that the "unfair" proposals represent "no benefit but... significant
cost"
to its members.

President Obama's proposals are built on the so-called Qualified
Intermediary system which was intended to ensure Americans paid the
correct
tax wherever they were domiciled. Foreign financial institutions that
handle American money have to fill in a US tax form on behalf of the
client
that has to be audited too. In return, the banks receive a QI seal of
approval as a qualified intermediary.