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U.S. Moves to Thwart Use of Foreign Acquisitions to Dodge Taxes

nytimes.com

151–160 of 164 posts

Re: U.S. Moves to Thwart Use of Foreign Acquisitions to Dodge Taxes

#151

Earlier quoted context omitted.

It's political newspeak because the large majority of the federal budget is social programs and so is the overwhelming majority of "non-discretionary spending." Excluding it diverts focus away from the primary source of government expenditures. It's language designed to make a particular thought unthinkable, which is the defining characteristic of newspeak.

You said: "Things they want are non-discretionary, other things are discretionary." That simply isn't true. Things that are funded by an appropriations bill are considered discretionary because the level of funding they receive is up to the discretion of Congress. Things that are funded by a mandate are not considered discretionary because their funding is not up to the discretion of congress from year to year. The o…

> Medicare and social security, the two biggest non-discretionary expenditures by the federal government, come out of entirely different piles of money than discretionary expenditures do. Were you not aware of that?

Medicare and social security are paid for through income taxes. The trust fund is entirely a work of accounting fiction. It contains only IOUs from the government to itself.

The system is built on a lie.

When the system was originally put into place, benefits were paid out to people who never paid the tax. From day one the money collected from taxpayers went to paying the previous generation's benefits. It wasn't saved in a trust fund, it was spent. The only reason there is any surplus money at all is that the population has been expanding, so they collected tax from more people than collected benefits. If we allowed people to opt out of social security and everybody below retirement age did so then the "trust fund" would run out of money long before it paid out as much as it ostensibly owes to people, because most of the money those people paid has already been spent on previous retirees.

But the remaining "trust fund" money was also spent. It's gone. They didn't invest it in real estate or shares of HP, they lent it to themselves and then spent it. The "trust fund" is a piece of paper that says the government owes itself money.

> Your income taxes are not funding social security.

My social security income taxes are funding social security for existing retirees. My federal withholding income taxes would fund social security in any year that the "trust fund" decreases in size, because that's where the rest of the money actually comes from.

> Your social security taxes are not funding things that come out of the general budget.

They do in any year that the "trust fund" increases in size.

> Legally, that isn't true.

The people who decide where the money goes are the people who make the law. A law can't be illegal. It could be unconstitutional, but I don't see any obvious reason why changing social security or medicare benefits would be unconstitutional.

> Cutting social security benefits would not free up more money to fund the things you think government should be doing.

It certainly would. Even if we keep the charade of separate accounting, reducing social security benefits would increase the size of the "trust fund" which serves as a long-term/perpetual debt sink for the rest of the government which allows the rest of the government to spend the money in present day and pay it back arbitrarily long in the future (or, as has historically been the case, never). Or if you prefer to look at it more directly, reducing both social security benefits and social security taxes would allow withholding taxes to be increased in the same amount without changing the total amount of money the government takes out of the taxpayer's paycheck.

You can't actually borrow money from yourself. You can do all the paperwork you like but at the end of the day the credit and the debit cancel out.

Re: U.S. Moves to Thwart Use of Foreign Acquisitions to Dodge Taxes

#152

Earlier quoted context omitted.

You said: "Things they want are non-discretionary, other things are discretionary." That simply isn't true. Things that are funded by an appropriations bill are considered discretionary because the level of funding they receive is up to the discretion of Congress. Things that are funded by a mandate are not considered discretionary because their funding is not up to the discretion of congress from year to year. The o…

> Medicare and social security, the two biggest non-discretionary expenditures by the federal government, come out of entirely different piles of money than discretionary expenditures do. Were you not aware of that? Medicare and social security are paid for through income taxes. The trust fund is entirely a work of accounting fiction. It contains only IOUs from the government to itself. The system is built on a lie.…

You didn't answer my question -- do you have any sort of proof that "discretionary spending" was actually invented by radical leftists? That was your original claim, remember? Do you stand by that claim, or no?

So, let me summarize your argument: You think that we should re-engineer the language to get rid of the distinction between discretionary and non-discretionary spending, in order to achieve a policy goal you find favorable. The situation is simple -- people like medicare and social security much better than the rest of government. In order to undermine support for popular social programs, you wish to change the language. I get that you believe there isn't really a distinction because of the way the government has borrowed from the SS trust fund. I don't entirely disagree with that. But you're still arguing for dumbing down the language to alter how people feel about government programs.

That sounds pretty Orwellian to me. It's a classic case of accusing one's opponent of the very thing you are doing.

So. Please refrain from these ludicrous, childish accusations about radical leftists and whatnot when you don't have proof and are in fact yourself engaging in Orwellian language games. Take 5 seconds to appreciate what an asshole that makes you look like, OK?

Re: U.S. Moves to Thwart Use of Foreign Acquisitions to Dodge Taxes

#153
post #55

Earlier quoted context omitted.

> And the US double taxes their citizens living abroad the same way. The tax code has provisions to avoid "double taxes" on foreign income. You file Form 1116 to claim credit for taxes you paid to a foreign country as an offset against your U.S. tax liability.[1] That tax credit is separate from the income exclusion, which excludes the first ~$100k of foreign income from U.S. taxation. Generally, your total tax liabi…

What! How can you not see the injustice in a US expatriate who has not set foot in the US for 20 years paying taxes to the IRS if they earn over $100K and their country of residence has a lower tax rate than America? That is exactly what happens today, no other country does this, and there is nothing just about it!

If you're an expatriate who hasn't set foot in the U.S. for 20 years and don't intend to return, maybe you shouldn't maintain your U.S. citizenship. But I don't think that's the typical case. I think the typical case is someone from the U.S. living abroad for a few years, regularly visiting and intending to return.

Re: U.S. Moves to Thwart Use of Foreign Acquisitions to Dodge Taxes

#154

Earlier quoted context omitted.

> Medicare and social security, the two biggest non-discretionary expenditures by the federal government, come out of entirely different piles of money than discretionary expenditures do. Were you not aware of that? Medicare and social security are paid for through income taxes. The trust fund is entirely a work of accounting fiction. It contains only IOUs from the government to itself. The system is built on a lie.…

You didn't answer my question -- do you have any sort of proof that "discretionary spending" was actually invented by radical leftists? That was your original claim, remember? Do you stand by that claim, or no? So, let me summarize your argument: You think that we should re-engineer the language to get rid of the distinction between discretionary and non-discretionary spending, in order to achieve a policy goal you f…

> You didn't answer my question -- do you have any sort of proof that "discretionary spending" was actually invented by radical leftists?

What are you actually asking for?

Even if the first person to ever use the term was William F. Buckley (which I rather doubt), what matters is who popularized it into common usage, which requires a population of people who would then have to be categorized as left or right. But even that wouldn't work because people don't fit into boxes. A Republican who supports expanding Medicare is on the left of that issue regardless of their party affiliation. Are you asking me to write that PhD thesis?

Both sides do this. "Intelligence community" instead of "spy agencies" is one of the right's. You know which side invented it because of who benefits from it. The proof is cui bono.

And I never said it was invented by Karl Marx or Leon Trotsky. The left comprises the likes of Nancy Pelosi or Hillary Clinton. Do you want citations to such people using that term or taking advantage of it? Here:

http://www.politifact.com/truth-o-meter/statements/2010/feb/... http://www.democraticleader.gov/newsroom/pelosi-floor-speech...

The right has come up with their own version of the lie, because the left generally uses "discretionary spending" to make the military budget look bigger (as with the OP), so the right now talks about "non-military (or non-defense) discretionary spending." That one is even worse. It cuts nearly the entire budget out of the budget. But it's a convenient lie whenever you want to cut "non-military discretionary spending" because it makes it look like five times as high a percentage of the budget than it really is.

> The situation is simple -- people like medicare and social security much better than the rest of government.

In no small part because their advocates have structured the language around them in order to make them immune from criticism.

For example, social security writes a bigger check to people who made more money while they were working. It might make more sense to make payments more uniform by reducing payments at the high end by a small percentage. And a small percentage of social security is an enormous amount of money. As in, 1% of social security is larger than the entire NSF budget. But if we consider only "discretionary spending" then we can't even consider that. It becomes unthinkable.

> But you're still arguing for dumbing down the language to alter how people feel about government programs.

Removing biased terms is quite the opposite of dumbing down. It's not even like they're using "discretionary" in the same sense as it's used in economics and personal finance -- in that sense the only non-discretionary part of the government budget would be the small subset of the military necessary for the government's survival and not one penny of social security.

I would love to see some proof of your position that undoing an Orwellian language change is an Orwellian language change. That's one heck of a status quo bias.

> Please refrain from these ludicrous, childish accusations about radical leftists and whatnot when you don't have proof and are in fact yourself engaging in Orwellian language games. Take 5 seconds to appreciate what an asshole that makes you look like, OK?

You're the first person in this thread to use the term "radical leftists" and ending your posts with ad hom attacks says more about you than the person you're describing.

Re: U.S. Moves to Thwart Use of Foreign Acquisitions to Dodge Taxes

#155

Earlier quoted context omitted.

Ah, so it only applies if you go back to the US. Good to know. Thanks.

Read it again. It applies if you spend time in the US or you paid above a certain amount in tax before you expatriated.

>covered expatriates who spend at least 31 days in the United States in any year

Doesn't "covered" here mean people who had to pay expatriation tax? That seems to indicate it's an AND rather than an OR. Thanks for your input!

Re: U.S. Moves to Thwart Use of Foreign Acquisitions to Dodge Taxes

#156
post #149

Earlier quoted context omitted.

It solves the problem of illegal tax evasion, by making it legal. See? Problem solved!

Exactly. Taxes are morally wrong.

No. They're not. It's the way how we as a society pay for common things.

Re: U.S. Moves to Thwart Use of Foreign Acquisitions to Dodge Taxes

#158

Earlier quoted context omitted.

Read it again. It applies if you spend time in the US or you paid above a certain amount in tax before you expatriated.

> covered expatriates who spend at least 31 days in the United States in any year Doesn't "covered" here mean people who had to pay expatriation tax? That seems to indicate it's an AND rather than an OR. Thanks for your input!

Read the very first sentence. There's no qualifier.

The thirty day part applies to you if you don't pay much in taxes.

Re: U.S. Moves to Thwart Use of Foreign Acquisitions to Dodge Taxes

#159
post #157

Earlier quoted context omitted.

Yes. That's how it works.

No, it's not. You're not paying taxes twice on the same money.

Yes, it's is. You are paying twice into two different jurisdictions. It is called double taxing.
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