Tax Shelters are Bleeding America Dry! How Romney and the 1% are robbing America.

How Tax Shelters Bleed America Dry

By: Veracity Stew Blog:

According to The Tax Justice Network “tax” is under attack. That’s not a good thing for working class families, and it is patently bad for our national economy:

Tax is the foundation of good government and a key to the wealth or poverty of nations. Yet it is under attack. These places allow big companies and wealthy individuals to benefit from the onshore benefits of tax – like good infrastructure, education and the rule of law – while using the offshore world to escape their responsibilities to pay for it. The rest of us shoulder the burden.

Tax havens offer not only low or zero taxes, but something broader. What they do is to provide facilities for people or entities to get around the rules, laws and regulations of other jurisdictions, using secrecy as their prime tool. We therefore often prefer the term “secrecy jurisdiction” instead of the more popular “tax haven.”
But how much damage is done each year? Recent reports estimate that the rich are hiding at least $21 trillion and possibly as much as $32 trillion in un-taxable offshore accounts. For those among us who are unsure, here’s what $32 trillion looks like: $32,000,000,000,000. For 5th graders who are learning scientific notation, that’s $3.2 x 1013. No matter how you write it or say it, this figure is nothing to sneeze at; neither are the taxes owed on earned interest from these accounts. The Stew crunched the numbers for you using different interest rates. The first column represents the total estimated amount in these offshore accounts. The third column is the interest earned from investment. Finally, we calculated how much these accounts would have contributed to education, infrastructure, police, fire fighters, and to the funding of those wars the rich find so darn profitable. Let’s start with the least estimate of $21 trillion. Interest rates reflect the likely range of 3%-7.5%:

Offshore Hidden Treasure Interest Rate Interest Earned Yearly   Taxes Owed (30%)
$21 Trillion             3%                        $630 Billion          $189 Billion
$21 Trillion                   4%                        $840 Billion          $252 Billion
$21 Trillion             5%                        $1.05 Trillion          $315 Billion
$21 Trillion             6%                        $1.26 Trillion          $378 Billion
$21 Trillion             7%                        $1.47 Trillion          $441 Billion
$21 Trillion             7.5%                           $1.58 Trillion             $472 Billion
Data Compiled by Veracity Stew  

Even the lowest estimate of $189 billion in taxes owed would put a nice dent in our deficit. It is estimated that offshore accounts could hold as much as $32 trillion, so let’s examine this upper bound as well.

Offshore Hidden Treasure Interest Rate Interest Earned Yearly    Taxes Owed (30%)
$32 Trillion               3%                        $960 Billion           $228 Billion
$32 Trillion                    4%                        $1.28 Trillion           $384 Billion
$32 Trillion              5%                        $1.60 Trillion           $480 Billion
$32 Trillion              6%                        $1.92 Trillion           $576 Billion
$32 Trillion              7%                        $2.24 Trillion           $672 Billion
$32 Trillion              7.5%                          $2.40 Trillion           $720 Billion
Data Compiled by Veracity Stew  

At the upper end, you will observe that anywhere from $1/4 trillion to $3/4 trillion is drained from the tax coffers each year by people who take huge government handouts for themselves. No amount of food stamps could collectively drain this amount in any given year. By the Stew’s calculation, $228 billion would supply food stamps for 46 million Americans for three full years! Mitt Romney said after the NAACP visit that the African Americans he addressed were “looking for free stuff”. That’s pretty much like scoffing at the “greedy” guy begging for pennies outside the bank even as you walk inside to rob the vault!

These numbers also make Eric Cantor look callously heinous when he made the announcement that over 50% of Americans do not pay taxes, because they receive refunds based on tax exemptions. Nothing can compare to the hundreds of billions drained from our economy each year due to abuse of tax havens, and Mitt Romney – the man who would be president – leads the charge.

Writers like Nicholas Shaxton expound upon how élites in the poorest African nations retard the development of their countries and drain their national economies by shifting their wealth to offshore tax havens. In many African nations, there is a huge, distinct chasm between the richest and the poorest of the land; is this to be America’s destiny? Will greed bring this empire to its knees?