Will the new 30% tax on U$D transferred abroad stop US expats from buying here?

[steveinbsas]

Thanks to a provision that was buried in the HIRE legislation that was recently passed by the US Congress and signed into law by President Obama, the days of US citizens easily transferring money out of the US may be over...unless they are willing to pay a 30% transfer tax on amount over $50,000.

http://21stcenturywire.com/2010/03/...s-soviet-style-capital-controls-on-americans/

 

[Ries]

Steve, you have linked to another wingnut teabag sky is falling website- which cant even get the facts right.

Here is the actual text of the bill-

Any funds transferred from the US to any overseas account are subject to a new tax equal to 30 percent of the total amount of the payment – unless the payment is sent to a foreign bank that has agreed to report all American-owned accounts automatically and electronically to the US government.

Now, note that last part- the part that starts with "unless".

What it means is, NO 30% tax on any bank that will actually be transparent about its depositers. What this is in reality is a tool to use against Swiss and Bahamian banks that are hiding US funds that are being deposited overseas to avoid paying US income taxes.

I dont know which, if any, Argentinian banks do or do not disclose this info to the US government, but if there is money to be made dealing with US funds, I am pretty sure banks like HSBC will comply. The vast majority of the banking profits in a field like this are NOT you and I sending a hundred grand to buy an apartment- its corporations wiring a million a month. And with the numbers involved, I really doubt that every single bank in Argentina will stand on principle, and refuse to tell the US government who is banking with em.

My guess is this will turn into another tempest in a teapot- and once the actual law takes effect in 2012, the wingnuts will find no actual change in most banking and transfer policies worldwide. The Swiss have already started to cooperate with the US government on this stuff.

 

[sergio]

This will then stop expats from transferring money to casas de cambio. I know quite a few people who have done this to avoid bureaucracy with banks. It will also be a problem with Argentines who want to repatriate money without informing the Argentine government. This law sounds to me like one more freedom lost for Americans.

 

[SaraSara]

This law sounds to me like one more freedom lost for Americans.

IMHO that's precisely what Patrick Henningsen, author of this piece, would like readers to believe. The column is titled:

"New Obama Law Places ‘Soviet-Style’ Capital Controls on Americans

Here's a list of other Henningsen's balanced and unbiased pieces, taken from his website:

=== "Obama to Crush Economy with Massive CO2 Taxes as Early as Next Week" -- April 2, 2010
=== "The Criminal NSA Eavesdropping Program" -- April 2, 2010
=== "Cops Raid Home Without Warrant" -- April 2, 2010
=== "Forensic experts to reexamine WTC rubble" -- April 2, 2010
=== "CIA Can Withhold Oklahoma City Documents" -- April 2, 2010

Before believing a column it is a good idea to check out the author, see where's he's coming from, and draw one's own conclusions. Mine is that this guy is another paranoid Obama-basher.

Sara

 

[Ries]

Here is a link to the actual bill-
http://primapanama.blogs.com/files/hire-act-of-3-18-10.pdf

It is not really clear, but it seems to be mainly about savings accounts- it makes no mention of real estate purchases.
My guess is that it will be interpreted by the feds at an administrative level, and how that happens is yet to be seen.
None of this takes effect til December 31, 2012. That is, almost 3 years from now.

I suppose there are people who send $100,000 thru casa de cambio- me, I wouldnt do it- but I have bought my one and only apartment in Argentina already, and did not mind paying a bit more for the security of using a bank, plus, the bank I used was the same bank as my seller used, so we could do the entire transaction there, which was much more convenient than renting an armored car to transport the money from a casa de cambio, or however you do it-
How is it done- do you just stuff a lot of $100 bills in your underwear and take a taxi to the closing?

And the law requiring reporting of foreign accounts and interest has been in effect for some years- so the only "loss" of freedom is the loss of the freedom to break the law and not get caught?
Because the actual "freedom" to not report foreign interest income, and shield assets in Swiss banks, was taken away many many years ago in the USA.

 

[SaraSara]

How is it done- do you just stuff a lot of $100 bills in your underwear and take a taxi to the closing?

When we bought our house my husband took the train to San Isidro carrying a grocery bag full of dollars, along with some potatoes and celery. Worked like a charm.

 

[French jurist]

When we bought our house my husband took the train to San Isidro, carrying a grocery bag full of dollars, along with some potatoes and celery. Worked like a charm.

Actually, every here and then, in the press appears a story of someone who forgot a bag with 30.000/80.000 US$ in cash here !
Last stories that emerged (since one year only !), as I can remember were a taxi driver in La Plata who found like 20 or 30.000 USD, he returned the money !

Too, a few months ago, an ambulant ice-cream seller sold ice-creams to a little girl who ran into her house -her father is a dentist- to grab some cash, she returned with like 20.000 pesos and gave it to the ice-cream guy who warned the father. The ice cream guy had all his front teeth missing (saw it on Cronica tv), and the dentist promised to give him a new smile as a reward.

Just to point out that not all Argentines are "muertos de hambre" (well, there may be many untold stories where the finder kept the cash and the loser didn't complain due to the provenance of the money, but that's another story).

 

[French jurist]

Edit :
Here is the story of the ice-cream guy (it was 12.000 pesos)
http://www.clarin.com/diario/2009/11/04/sociedad/s-02033514.htm

 

[French jurist]

Added :
(re)Found the story of the taxista. It was 130.000 pesos (!!!).

http://www.clarin.com/diario/2009/05/07/sociedad/s-01912876.htm


What I did not know is that some young guys set up an internet site afterwards to reward the taxista (he didn't want any reward). They managed to get close to 50.000 pesos for him.

Nice story

 

[sergio]

And the law requiring reporting of foreign accounts and interest has been in effect for some years- so the only "loss" of freedom is the loss of the freedom to break the law and not get caught?

I am not speaking of reporting foreign accounts and interest. I was referring to money sent to a casa de cambio to buy property or perhaps to renovate a property. If everything was clear and simple in Argentina transferring money to a bank would be ok. Suppose you had transferred that money just before the crisis when the accounts were frozen? Money sent to a reliable casa de cambio would not have been frozen. Why do you think Argentines use these services? They are afraid of banks and what can happen.