There are multiple things wrong with this claim, but the most fundamental, I think, is that it represents a remarkable misunderstanding of the reasons why we have taxes in the first place.
In his latest blog, Paul Krugman continues his blogging battle with the MMTers.Quote: Steve Landsburg asserts that you can’t tax a man if you can’t persuade him to reduce his consumption. They don’t primarily exist as a way to induce lower private consumption, although they may sometimes have that effect; they are there to ensure government solvency.I agree with Krugman that taxes do not "primarily exist as a way to induce lower private consumption." In fact the government can only set the tax code and tax rates. Tax revenues vary with the economy over which the government has little control from one year to the next. In any case, taxation is subject to much political compromise and is a blunt tool at best for controlling private consumption.The primary function of taxes is to create a demand for the government's fiat money. Taxes are needed to limit government debt relative to the national income, although the upper limit is well above the current level. Krugman is quite mistaken when he asserts that taxes "are there to ensure government solvency." There is never an issue of solvency when the government's debt is denominated in its own currency, as it is in the US.
Consider first the taxes raised by, say, the state of New Jersey. Chris Christie doesn’t tax me because he wants to reduce my consumption; he taxes me because NJ needs money to pay its bills. It’s true that in the short run, if we ignore the legal restrictions on state borrowing, he can spend more than the state takes in in taxes; but over the longer run the state must, one way or another, collect enough revenue to pay for its spending.True, but irrelevant. The focus of MMT is on the national government and its currency.
Does the same thing hold true for the federal government? Well, the feds have the Fed, which can print money. But there are constraints on that, too — they’re not as sharp as the constraints on governments that can’t print money, but too much reliance on the printing press leads to unacceptable inflation. (Cue the MMT people — but after repeated discussions, I still don’t get how they sidestep the issue of limits on seigniorage.)Krugman misunderstands the MMT position here. MMT people do not sidestep the issue of limits on seigniorage. They have clearly stated that unrestricted printing of money will lead to unacceptable inflation. Their basic point is that government deficit spending creates non-government financial wealth, and deficits are non-inflationary up to the point of nearly full employment.
So taxes are, first and foremost, about paying for what the government buys (duh). It’s true that they can also affect aggregate demand, and that may be something you want to do. But that really is a secondary issue.It is certainly true that the government cannot simply print the money it spends without its leading to runaway inflation. Taxes help pay for what the government buys, but a government deficit is needed on average to increase the financial wealth of the private sector consistent with a growing population and economic output.
And may I say that now is an especially peculiar time to think that taxes matter only if they reduce consumption. We have lots of excess capacity in the economy; the government can easily buy more goods and services without requiring that the private sector buy less. The only reason to raise taxes now, or promise future rises, is to address solvency concerns.MMTers do not advocate raising taxes now, and certainly not to reduce consumption. So I don't understand what Krugman is getting at here. Discussions like this really disturb me; they indicate that there are a lot of people with Ph.D.s in economics who can throw around a lot of jargon, but when push comes to shove, have no coherent picture whatsoever of how the pieces fit together.
Friday, April 29, 2011
Monday, April 25, 2011
Lawyers on a Global situation
Lawyers on a Global situation
Your international legal magazine on Legal Magazine
U.S. taxpayers who failed to file disclosure forms were alerted by the U.S. Treasury on September 21, 2009 of a one-time extension of time to October 15, 2009 to comply with the special voluntary disclosure requirements of the Internal Revenue Service for Americans with unreported income from bank accounts situated outside the United States. As a result, after the deadline passed, many amnesty filings were made with the U.S. Treasury.
The total amount of tax, interest and penalties assessed and collected were so significant to the Treasury that another voluntary tax amnesty program and period would be offered with less favorable terms.According to the latest information from the U.S. Treasury, more than 15,000 amnesty filings were made on or before the 15th day of October 2009. The IRS and the IRS Commissioner, Douglas Shulman, disclosed that even after the above deadline, an additional 3,000 taxpayers came forward to be in compliance with America’s tax laws in relation to foreign bank accounts.
IRS Commissioner Shulman stated:
"As I've said all along, the goal is to get people back into the U.S. tax system. Combating international tax evasion is a top priority for the IRS. We have additional cases and banks under review. The situation will just get worse in the months ahead for those hiding assets and income offshore. This new disclosure initiative is the last, best chance for people to get back into the system.", "As we continue to amass more information and pursue more people internationally, the risk to individuals hiding assets offshore is increasing…This new effort gives those hiding money in foreign accounts a tough, fair way to resolve their tax problems once and for all. And it gives people a chance to come in before we find them."
The voluntary amnesty program will be termed the "2011 Offshore Voluntary Disclosure Initiative" (OVDI) and, from what I have seen to date, will incorporate many of the items of the 2009 amnesty, both good and bad. Taxpayers participating in the new initiative must also file all original and amended tax returns and include payment for taxes, interest and accuracy-related penalties by the Aug. 31 deadline.
Tax specialists may make reference to a particular tax rule and continue to state that the rule had so many exceptions that it was like "the tail wagging the dog."
1. The above 25% penalty may be reduced to 5% in very special situations;
2. If your offshore accounts (and assets!) are less than $75,000 in any tax year from 2003 through 2010, then that year will face a reduced penalty from 25% to 12.5%. However, the tax, interest and accuracy related penalties will still apply in full, please see immediately below on the interest and accuracy related penalty.OVDI has increased the penalty to 25% of the amount in the foreign bank accounts in the year with the highest aggregate account balance while looking at a 7-year period, from 2003 through 2010. This 25% penalty will apply to most filers of the OVDI amnesty. In addition, amnesty filers will be required to accept and pay back any and all taxes, interest and accuracy related penalties with a total payoff of these taxes, and interest and penalties on or before the August 31, 2011 deadline.
3. As mentioned in the 2009 amnesty, the IRS continues to solicit compliance with the threat of "possible" criminal prosecution for taxpayers who do not come forward in the 2011 amnesty offering.
4. The 2011 initiative offers clear benefits to encourage taxpayers to come in now rather than risk IRS detection. Taxpayers hiding assets offshore who do not come forward will face far higher penalty scenarios as well as the possibility of criminal prosecution.
Your international legal magazine on Legal Magazine
U.S. taxpayers who failed to file disclosure forms were alerted by the U.S. Treasury on September 21, 2009 of a one-time extension of time to October 15, 2009 to comply with the special voluntary disclosure requirements of the Internal Revenue Service for Americans with unreported income from bank accounts situated outside the United States. As a result, after the deadline passed, many amnesty filings were made with the U.S. Treasury.
The total amount of tax, interest and penalties assessed and collected were so significant to the Treasury that another voluntary tax amnesty program and period would be offered with less favorable terms.According to the latest information from the U.S. Treasury, more than 15,000 amnesty filings were made on or before the 15th day of October 2009. The IRS and the IRS Commissioner, Douglas Shulman, disclosed that even after the above deadline, an additional 3,000 taxpayers came forward to be in compliance with America’s tax laws in relation to foreign bank accounts.
IRS Commissioner Shulman stated:
"As I've said all along, the goal is to get people back into the U.S. tax system. Combating international tax evasion is a top priority for the IRS. We have additional cases and banks under review. The situation will just get worse in the months ahead for those hiding assets and income offshore. This new disclosure initiative is the last, best chance for people to get back into the system.", "As we continue to amass more information and pursue more people internationally, the risk to individuals hiding assets offshore is increasing…This new effort gives those hiding money in foreign accounts a tough, fair way to resolve their tax problems once and for all. And it gives people a chance to come in before we find them."
The voluntary amnesty program will be termed the "2011 Offshore Voluntary Disclosure Initiative" (OVDI) and, from what I have seen to date, will incorporate many of the items of the 2009 amnesty, both good and bad. Taxpayers participating in the new initiative must also file all original and amended tax returns and include payment for taxes, interest and accuracy-related penalties by the Aug. 31 deadline.
Tax specialists may make reference to a particular tax rule and continue to state that the rule had so many exceptions that it was like "the tail wagging the dog."
1. The above 25% penalty may be reduced to 5% in very special situations;
2. If your offshore accounts (and assets!) are less than $75,000 in any tax year from 2003 through 2010, then that year will face a reduced penalty from 25% to 12.5%. However, the tax, interest and accuracy related penalties will still apply in full, please see immediately below on the interest and accuracy related penalty.OVDI has increased the penalty to 25% of the amount in the foreign bank accounts in the year with the highest aggregate account balance while looking at a 7-year period, from 2003 through 2010. This 25% penalty will apply to most filers of the OVDI amnesty. In addition, amnesty filers will be required to accept and pay back any and all taxes, interest and accuracy related penalties with a total payoff of these taxes, and interest and penalties on or before the August 31, 2011 deadline.
3. As mentioned in the 2009 amnesty, the IRS continues to solicit compliance with the threat of "possible" criminal prosecution for taxpayers who do not come forward in the 2011 amnesty offering.
4. The 2011 initiative offers clear benefits to encourage taxpayers to come in now rather than risk IRS detection. Taxpayers hiding assets offshore who do not come forward will face far higher penalty scenarios as well as the possibility of criminal prosecution.
Tuesday, April 5, 2011
Thai Baht Account
Thai Baht Account
Agreements and contracts on Agreements and Contracts
As a matter of fact, non-residents may also open and maintain a Thai Baht account with the authorized agents in Thailand. In addition to a passport, the authorized agents may also require a work permit (if any). What is more, the depositor will be requested to submit certain necessary documentary evidence, such as in the case of a deposit of Thai Baht derived from sale of foreign currency which originated from abroad--the evidence of such sale of foreign currency, or if derived from salary received while working in Thailand--the certificate of income from the employer. Similarly, the minimum amounts required for opening of different types of Thai Baht accounts may also be specified by the authorized agent with which the accounts are to be opened and maintained.
Agreements and contracts on Agreements and Contracts
As a matter of fact, non-residents may also open and maintain a Thai Baht account with the authorized agents in Thailand. In addition to a passport, the authorized agents may also require a work permit (if any). What is more, the depositor will be requested to submit certain necessary documentary evidence, such as in the case of a deposit of Thai Baht derived from sale of foreign currency which originated from abroad--the evidence of such sale of foreign currency, or if derived from salary received while working in Thailand--the certificate of income from the employer. Similarly, the minimum amounts required for opening of different types of Thai Baht accounts may also be specified by the authorized agent with which the accounts are to be opened and maintained.
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