Executive Summary – In Obama's never ending quest to punish the wealthy thinking that will fix the USA with its unsound monetary practices and toxic banks is now going to chase after the offshore hedge funds. I would guess that 98% of the people who were duped into voting for Obama would not be able to give you any sort of an inkling of what an offshore hedge fund is. They just think it is great that Obama go after them and maybe put some of that money into some social programs.

Details – Hedge funds assets in places that are considered offshore tax havens like the Cayman Islands and Bermuda account for 65% of the total industry, which is said to be $1.3 trillion dollars. That is a lot. It is estimated that $400,000,000,000 to $500,000,000,000 belongs to USA investors. This is also a lot. The rest belongs to foundations (hmmm could these be controlled by US investors?), endowments and pension funds. They are also targeting offshore private equity investment vehicles.

Implications – Obama is on a roll going after the wealthy productive business people. The super rich will not have much to fear. The guy with under $100,000,000 is in the crosshairs. The USA has high taxes. It is thought that one paying federal income tax, state income tax, property tax, possible city and county taxes, car registration tax, phone service tax, cable TV service tax, Internet service tax, sales tax and other sordid and sundry subtle forms of taxation is really paying about 65% in taxes and they get practically nothing from the government in return. Unemployment insurance is pathetically low, compared with say a Northern Europe country that has the same tax basis. Health care benefits are like not really there. Retirement is pathetically low, again compared to a Northern European nation who taxes at about the same rate. There were safety valves in the USA for the educated businessperson to shelter money and avoid working for the government. Let us not forget protecting assets from the broken civil litigation system operating there for decades. These days of prosperity are over forever. Obama is killing the goose that was laying the golden eggs so well that the goose will never rise again to start a business. He really doesn’t care. It will keep him in office and he will have no financial worries after a fun four years in the white house cruising around in limos and Air Force One. Heck he might even get to start a few of his own wars. The American people that are the unfortunate tax payers seem to put up with whatever he does, just verbal complaining so why not bear down harder he must figure. He is getting support from those who are tax consumers, not taxpayers. Tax consumers only destroy countries when they get too powerful and out of control. Sure they have a few good years before it comes down on their heads. There is no such thing as a free lunch. All we can say is expect the worst. In the long run the tax consumers will see how wrong they were. It never ever once worked yet. Meanwhile the largest multi-billion dollar multi national corporations are still going offshore to tremendously reduce their overall tax rate. They pay to lobby congress, pay political contributions, etc. The poor guy with a few million dollars who doesn’t pay protection like the large multinationals is now learning why they pay protection (lobbying, political contributions, etc.).

Obama Upping the Stakes – He is now going to jail people for not reporting offshore accounts. These are not violent criminals yet they will be getting long harsh jail sentences while the tax consumer’s cheer. The USA is one of very few nations to jail people for tax crimes. Guess their taxes are so awful with so little in return they have to resort to this. Will this create ill will towards OBama, sure but so what? He will continue to do as he wants and the people will gripe and bicker while they go to jail, become homeless, have no jobs, no credit, no health care, no home equity etc.

http://www.panamalaw.org