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Trump’s Tax Returns Show U.S. Lags Behind in Fiscal Competitiveness

By: Guest Contributor - Mar 15, 2017, 2:34 pm
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Would he rather pay $38 million to the ghouls at the IRS, or would he rather make an annual payment of €100,000 to the Agenzia Entrate? (Hill Talk)

By Daniel J. Mitchell

The multi-faceted controversy over Donald Trump’s taxes has been rejuvenated by a partial leak of his 2005 tax return.

Interestingly, it appears that Trump pays a lot of tax. At least for that one year. Which is contrary to what a lot of people have suspected – including me in the column I wrote on this topic last year for Time.

Some Trump supporters are even highlighting the fact that Trump’s effective tax rate that year was higher than what’s been paid by other political figures in more recent years.

But I’m not impressed. First, we have no idea what Trump’s tax rate was in other years. So the people defending Trump on that basis may wind up with egg on their face if tax returns from other years ever get published.

Second, why is it a good thing that Trump paid so much tax? I realize I’m a curmudgeonly libertarian, but I was one of the people who applauded Trump for saying that he does everything possible to minimize the amount of money he turns over to the IRS. As far as I’m concerned, he failed in 2005.

But let’s set politics aside and focus on the fact that Trump coughed up $38 million to the IRS in 2005. If that’s representative of what he pays every year (and I realize that’s a big “if”), my main thought is that he should move to Italy.

Yes, I realize that sounds crazy given Italy’s awful fiscal system and grim outlook. But there’s actually a new special tax regime to lure wealthy foreigners. Regardless of their income, rich people who move to Italy from other nations can pay a flat amount of €100,000 every year. Note that we’re talking about a flat amount, not a flat rate.

Here’s how the reform was characterized by an Asian news outlet.

Italy on Wednesday (Mar 8) introduced a flat tax for wealthy foreigners in a bid to compete with similar incentives offered in Britain and Spain, which have successfully attracted a slew of rich footballers and entertainers. The new flat rate tax of €100,000 (US$105,000) a year will apply to all worldwide income for foreigners who declare Italy to be their residency for tax purposes.

Here’s how Bloomberg/BNA described the new initiative.

Italy unveiled a plan to allow the ultra-wealthy willing to take up residency in the country to pay an annual “flat tax” of 100,000 euros ($105,000) regardless of their level of income. A former Italian tax official told Bloomberg BNA the initiative is an attempt to entice high-net-worth individuals based in the U.K. to set up residency in Italy… Individuals paying the flat tax can add family members for an additional 25,000 euros ($26,250) each. The local media speculated that the measure would attract at least 1,000 high-income individuals.

Think about this from Donald Trump’s perspective. Would he rather pay $38 million to the ghouls at the IRS, or would he rather make an annual payment of €100,000 (plus another €50,000 for his wife and youngest son) to the Agenzia Entrate?

Seems like a no-brainer to me, especially since Italy is one of the most beautiful nations in the world. Like France, it’s not a place where it’s easy to become rich, but it’s a great place to live if you already have money.

But if Trump prefers cold rain over Mediterranean sunshine, he could also pick the Isle of Man for his new home.

There are no capital gains, inheritance tax or stamp duty, and personal income tax has a 10% standard rate and 20% higher rate.  In addition there is a tax cap on total income payable of £125,000 per person, which has encouraged a steady flow of wealthy individuals and families to settle on the Island.

Though there are other options, as David Schrieberg explained for Forbes.

Italy is not exactly breaking new ground here. Various countries including Portugal, Malta, Cyprus and Ireland have been chasing high net worth individuals with various incentives. In 2014, some 60% of Swiss voters rejected a Socialist Party bid to end a 152-year-old tax break through which an estimated 5,600 wealthy foreigners pay a single lump sum similar to the new Italian regime.

Though all of these options are inferior to Monaco, where rich people (and everyone else) don’t pay any income tax. Same with the Cayman Islands and Bermuda. And don’t forget Vanuatu.

If you think all of this sounds too good to be true, you’re right. At least for Donald Trump and other Americans. The United States has a very onerous worldwide tax system based on citizenship.

In other words, unlike folks in the rest of the world, Americans have to give up their passports in order to benefit from these attractive options. And the IRS insists that such people pay a Soviet-style exit tax on their way out the door.

Daniel J. Mitchell is a senior fellow at the Cato Institute who specializes in fiscal policy, particularly tax reform, international tax competition, and the economic burden of government spending. He also serves on the editorial board of the Cayman Financial Review. This article was originally published on FEE.org. Read the original article.

Chilling Audio Reveals Details of Guatemala Fire that Killed 40 Girls

By: Adriana Peralta - @AdriPeraltaM - Mar 15, 2017, 1:32 pm
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EspañolRecordings of three survivors from a massive fire in Guatemala that killed 40 has been released by a local media outlet, revealing shocking details about the moments leading up to the event. Nómada, a Guatemalan media outlet, interviewed young survivors of the tragedy that happened at a girls' shelter, and subsequently published the recordings. During the interviews, the girls claim the police told them to simply tolerate the fire as it was happening. Also, that there was a revolt being planned by the girls in the shelter against their mistreatment. Nómada's website was inexplicably shutdown following the publication of this information. The three survivors recounted how the police locked them up and did not help them when they saw they were in danger from the fire. "They told us we could rot," one of the victims claimed. The accounts coincide with research carried out by the Human Rights Attorney's Office, as well as other officials reports and testimonies collected by the media. The night before the tragedy, a riot broke out and a group of teenagers escaped from the shelter. The police were able to apprehend them and inflict what has been described as serious abuse on many of the girls, according to one girl's testimony, which you can listen to here. Read More: Sugar Subsidies, America’s Least Efficient Corporate Welfare Program Read More: Mexico’s Tax on Soft Drinks is Fattening Power Hungry Politicians Teachers and caretakers at the shelter were waiting to receive the escapees, who were then shut into a classroom until about one in the morning. "They laid out some mattresses for us," one girl said during the interview. "They did not bring us any sheets, we slept outside, just on the mats, that's all. A group of female PNC agents locked us up and were taking care of us." The next day, after breakfast, according to the girls' reports, some requested to be taken to the bathroom. "We asked the police to please take us to the bathroom and the police did not want to let us out, they said that we could rot for all they care. My classmates made a mini a hole in the mattresses and did what they had to do there," one girl said. googletag.cmd.push(function() { googletag.display('div-gpt-ad-1459522593195-0'); });   The three teenagers agree on what happened next: They set a mat on fire in hopes that the police would open the door and help them. "One of the agents said, 'let those miserable girls suffer.' If we had been strong enough to escape, we would be strong enough to bear the pain." The Public Ministry of Guatemala has since captured Secretary to the shelter Carlos Antonio Rodas, Deputy Secretary Anahy Keller, and Director Santos Torres. They are charged with homicide, breach of duties and mistreatment of minors. Sources: Nómada, Soy502

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