FairTax: Repatriating Offshore $USD

Posted on August 13, 2011 by Bill E. Payne

November 2010 – FairTax Friday:
Yesterday afternoon, the shares of Cisco Systems, Inc lost 16.2% of their value. Ironically, last month the CEO of Cisco and the President of Oracle Corporation penned a joint letter in the Wall Street Journal with a solution to our economic fatigue. Their common sense plea was to lower the US tax rate for corporations wishing to bring their overseas earnings to the United States. The current rate of up to 35% strongly discourages re-investment in our nation and is opposite the policy of the rest of the developed world. They imagined a trillion dollars flooding into our nation and millions of Americans hired. They were ignored.

Imagine American businesses unshackled from one of the highest tax rates in the world and thriving in the lowest. Small businesses starting in record number, the Made In America label making a comeback and record employment. Trillions of investment dollars flowing into the US from around the world, the stock market reaching never imagined – and sustainable – heights, while the US becomes the undisputed financial leader in the world for generations to come.[1]

The challenge of U.S. dollars being held in offshore bank accounts in an effort to avoid paying taxes on capital gains and interest has grown significantly in the past few years. Some estimates say that money is as much as $15 trillion (based on past data plus annual growth estimates) and is growing by an estimated $860 billion per year[2], resulting in billions of dollars in lost tax revenue every year. Other (earlier) estimates claim as little as $1.6T is being held in offshore accounts. Regardless of the actual amount being held offshore, it is strongly believed that the FairTax would repatriate the vast majority of that money, bringing it back on US soil and putting it to work for the United States. “Former Federal Reserve Chairman Alan Greenspan said that once the FairTax is passed it would take only months for that money to be repatriated back into U.S. banks where it could then be used to grow the economy”.[3]

Let’s just take the high road here and assume the best. 15 TRILLION DOLLARS injected into the economy in a matter of months! That makes stimulus packages and “quantitative easing” look like pocket change. Especially since those efforts didn’t create jobs or improve the economy – not like a $15 Trillion shot in the arm, anyway.

Under the FairTax, the United States stands alone as the only advanced nation in the world with a zero rate of federal tax on productive income, whether from returns on capital or personal earnings. The U.S. becomes the most attractive, tax-haven venue in the world for investment, manufacturing and exports. Investment lost to foreign outsourcing repatriates to our shores as the U.S. becomes the global seat of production, management, research and export activity. Capital trapped offshore by our tax morass repatriates as well. Eventually, other nations will be forced to follow suit and reduce marginal tax rates or lose their investment to the U.S.; this global reform stimulates worldwide economic growth to the benefit of the global community, thus providing U.S. producers with larger markets.[4]

We are one match short of a cookout. The FairTax (HR25/S13) has been in committee for years, reviewed in a hearing July 26, 2011 and is picking up co-sponsors as time passes, but America needs the FairTax now! YOU are the match.

Your representative’s name and contact information is here:
http://www.house.gov/representatives/

Your senators’ names and contact information are here:
http://www.senate.gov/general/contact_information/senators_cfm.cfm

We urge you to contact them by phone and/or e-mail and demand that they learn about and endorse or support HR25 (House of Representatives bill) and S13 (Senate bill). Copy and paste this information into an e-mail to them and let them know you will only vote for candidates who support HR25/S13, THE FairTax.

References:
[1] FairTax Friday – November 2010: http://www.fairtax.org/site/MessageViewer?em_id=25481.0
[2] TaxJustice.com – Price of Offshore: http://www.taxjustice.net/cms/upload/pdf/Price_of_Offshore.pdf
[3] Wikipedia – Predicted Effects of the FairTax: http://en.wikipedia.org/wiki/Predicted_effects_of_the_FairTax#Repatriation_of_offshore_accounts
[4] Submission of Americans For Fair Taxation on the FairTax Comprehensive Tax Reform Proposal to The President’s Advisory Panel on Federal Tax Reform April 29, 2005: http://www.fairtax.org/PDF/FairTaxTaxPanelStatement.pdf