April 16, 2012
The latest bill empowering the IRS to revoke American citizens’ passports is currently in motion. But revoking American citizens’ natural travel rights is only the beginning of this federal government’s latest drive towards a fully-fledged, collectivist totalitarian society.
Senate Bill 1813, was originally introduced by Senator Barbara Boxer (D-CA) and already passed the Senate on March 14 – all the while disguised as legislation “to reauthorize Federal-aid highway and highway safety construction programs, and for other purposes.”
Those “other purposes” are contained in Senate Leader Harry Reid (D-Nev) latest addition to this legislation, that allows the State Department to “revoke, deny or limit passports” for any person deemed by the Internal Revenue Service as having “a seriously delinquent tax debt in an amount in excess of $50,000.”
The real purpose here, of course, is Federal Capital Controls. In other words, during the impending economic collapse, the US federal government does not want to allow any amounts of private holdings to leave the United States.
Few payed any serious attention to Obama’s Capital Controls bill two years ago, a bill which put the legal measures in place to enforce ‘Soviet-Style’ capital controls in America.
The capital controls wording was hidden, deep within a $17.5 billion “H.I.R.E.” Hiring Incentives to Restore Employment Act (H.R. 2487). This established control over Americans’ ability to move their money across international borders may become restricted thanks to new legislation passed two years ago.
It outlined new U.S. Federal restrictions on any foreign holdings which exceed the relatively meager amount of $50,000 and left the door open for a new 30% transaction or ‘holdings’ tax to be enforced by the IRS. The new law was the first step in an unprecedented extension of the US Government into the global sphere – a move that targets any American citizen who is thinking of moving his or her capital out of the US before the impending devaluation of the US dollar.
It was reported by this writer two years before in 2010 (and is more relevant today than ever):
Why has the White House and its Federal Government decided passed such a law now?
We should start by considering the big picture. The ramifications of this new under-the-radar federal move are large and far-reaching. Concerned readers would do well here to question both the fundamental and practical aspects of such a law. Consider for one moment the letter of the law- or the figure of $50,000. For extremely high net-worth individuals, this new regulation over their personal freedom amounts to a mere ‘speed-bump’ in financial terms. With their money buried securely into property, foreign investments and strings of shell companies and complex funds, financial elites will find this new super socialist state control affects only minor liquid cash amounts, or ‘pocket-money’. For the middle class or small investor, the picture is quite different. Fast-forward 12 or 18 months into the future where rising inflation and a severe devaluation of the dollar may occur.
The ability for a middle class American to migrate his or her savings into the relative safe haven of a foreign currency or overseas investment is now controlled by the United States Federal Government.
Economists and historians will note that such “Capital Controls” are part and parcel of super-socialist states like the Soviet Union and its former satellite states. Even today, it’s common practice for struggling socialist governments located in regions like South America, Central America and Africa to impose periodic restrictions on cash leaving those countries- a sure sign of a currency and economy in decline. This practice also characterizes foreign states who are under the economic restructuring administration of the International Monetary Fund (IMF). One could also speculate that such restrictions imposed on Americans would certainly pave the way for a future IMF-type administration of the USA, making it markedly easier to manage for the World Bank.
Putting all speculation aside though, this new law amounts to a dangerous precedent where the Federal Government can, with the full enforcement of the IRS, lay down Capital Controls on any dollar amount- regardless of its size.
In the event of a US currency devaluation (see US ‘Bank Holiday’) of the dollar, the said figure in the new bill- $50,000, could become a rather nominal sum amounting to only 2/3′s or 1/3 of its previous value. Do not count on the Federal Government to adjust its printed figure of “$50,000″ for inflation or devaluation, leaving a Capital Control on relatively smaller holdings, leaving no safe haven for the average American.
Throughout history, in countries where such Capital Controls are administered by the state, large black market cash courier industries have thrived. When a foreign currency is difficult or illegal for local citizens to acquire, they will either pay a tax to the government or a smaller black market premium to acquire it. If government transaction taxes are high enough(like the new 30% tax set by US law), punters may opt instead for the black market. This certainly was the case in fledgling socialist countries like Italy in the 1960′s where organized networks of independent couriers amassed large fortunes by smuggling cash over the border. Of course, new border restrictions and TSA surveillance technologies will make it almost impossible for an individual to move substantial amounts of cash through airports.
Through color of law, such activities might already be considered illegal and deemed as tax evasion by the IRS. Read a full analysis on Obama’s new law here, courtesy of our friends at Zero Hedge.