Tuesday, 30 April 2013

DUMMY OFFSHORE COMPANIES - ONLY $79.99

I AM ACTUALLY NOT A DUMMY
YOU LOT ARE THE DUMMIES.
I have been asked to clarify TAX-EVASION-CAPITAL-FLIGHT. Is the recently estimated $32 trillion in tax-havens (about 80 million jobs) all tax that should have been paid?  

No! How it works is that if, for example, a business trading in the USA, employing 5,000 people and serving 2 million customers, makes in a year, say $25 million profit - the corporation tax bill (tax on profits) will be about 20% or $5 million.

BUT - for the bookkeepers to fiddle the accounts sufficiently to kill off the $5 million tax bill - they have to send themselves dummy invoices for the whole profit - $25 million. So, they register a pretend company in  a tax-haven - say Cayman, or Delaware; there are 75 to choose from. The company has no costs, no employees, no commercial activity and its ownership is hidden - and its directors are dummy directors, pretend executives. 


To be legal and therefore to get tax relief, this dummy company must in American Law be a real trading entity, on normal commercial terms, be at arms length from the profitable company (so not controlled by the same people - but independently managed) and NOT to be formed to reduce US taxes. These conditions make the bookkeepers' work difficult.

After much head scratching, the bookkeepers in the USA make up some invoices, appearing to come from the tax-haven company, that they hope the IRS will nod through - and grant US tax relief on. The false invoices are for the whole US profit of $25 million. That's the simple story - but because of the anti-evasion rules, it ain't that simple - so the bookkeepers end up in an ENRON accounting maze - with dozens of companies - onshore and offshore - all dummies - all sending each other false invoices. The net result is that the $25 million profit is absorbed in the chaos.

The Accounts and Balance Sheets are prepared by the bookkeepers, approved by the auditors and lawyers and directors, for very large fees, as being True and Fair Views of the dozens of companies - and the bewildered bullied blackmailed or bribed IRS then also approve all the transactions - and agree a NIL profit and NIL tax in the USA. The professional advisers then dress the false transactions in legal and accountancy gobbledygook and miles of small print - to baffle everyone.

To complete the transactions' debit and credit bookkeeping (there still is some logic to bent accounting), the main profitable company, with the complicit help of their banks, pays the dummy invoices - to the dummy tax-haven  companies, into their offshore bank accounts. The whole $25 million is paid. The CAPITAL leaves America. This is the Tax-Evasion-Capital-Flight, which leaves the US and is no longer available for investing in the nation - which provided all the revenues and all the police, armed forces, hospitals, roads, bridges and business infrastructure, and all the real employees. So US banks are depleted. The only way to bring the capital back is to borrow it - from the FREE MARKETS. Then US citizens are told they are lazy, living in debt, must work harder for less and that their pensions have been lost - "Due to the economic downturn". Have you ever been more suckered?

It is all just make believe - to enable 0.5% of the population to steal all the assets of the 99.5%. But, We The People, in all OECD countries where large companies trade - are required to pretend that we believe all the millions of dummy transactions - to siphon off trillions of dollars from our High Streets - are real. YES - We do all believe in Fairies!

TAX AND ECONOMICS ARTICLES 29TH APR 13

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