Offshore Tax Havens: Judge Napolitano Has an Opinion

The Economist says U.S. citizens have $20 Trillion stashed away in offshore tax havens, and “The Economist” wants to reform tax laws and bring the money back to the U.S. Judge Andrew Napolitano has a definite opinion about the legality of untaxable offshore accounts.

Once we pay taxes, our money belongs to us.

Once we pay taxes, our money belongs to us.

NAPOLITANO:…bring the money back home where it belongs? It belongs wherever the person who owns the money wants it to be. Let’s get this straight: if you earn $1000 in the United States, you can’t avoid paying income tax on that money by shipping it off to an offshore account, but if you earn $1000 in the United States, pay taxes on it and what’s left after taxes you put in an offshore account and that generates interest, the question is, is that interest taxable in the United States. That’s the dispute.

The Economist argues…in my hypothetical the $1000 is really $20 Trillion, so whatever the interest on the $20 Trillion would be is a huge number and the tax on that is a huge number that the government is not getting.

VARNEY: So do we bring it back?

NAPOLITANO: Of course not. It’s the decision of the person who sent it there. They’ve already paid taxes on it. It’s their money.

VARNEY: But the law says they must declare the interest and the dividends and the capital gains on any assets you have overseas if you are a resident in the U.S.

NAPOLITANO: I understand that. It’s the law. I’m not suggesting you should violate the law. It’s a bad law, because the U.S. has no claim on that…the interest was not generated in the U.S., so they have no right to tax it.

VARNEY: What chance of success would you have in the U.S. if you went out there and campaigned on…I’ve got a Cayman Islands account and I think it’s great. I’m going to put my money over there and you’re not going to touch it.

NAPOLITANO: Do you really think that I tailor my views to their popularity amongst voters? (some chat between Varney and The Judge)

NAPOLITANO: I say once you’ve paid taxes on your money it is yours to send it where you want. If it’s outside the U.S., the government has no claim on the interest it earns….

NAPOLITANO: Now would you let me join the Senate Committee interrogating Bernanke? We’ll have a ball. (this part of the conversation stops at about 3 mins-in. The video is 4:56 long)

Read The Economist article here. The opening sentence:

CIVILISATION works only if those who enjoy its benefits are also prepared to pay their share of the costs.

Stuart Varney and Judge Andrew Napolitano on Offshore Accounts (video)

Linked at BadBluethe baaaaddddest news on the planet!

Linked in SENTRY JOURNAL’S St. Patrick’s Day Edition of Teeing it Up Around the Links – thanks John! (find good reading here)

  • Good for Judge Napolitano! The Economist has become more and more leftist over the years; my husband subscribes to it and I throw it in the trash as quickly as possible. No imagination, just that smug self-righteousness that is so typical of West Europeans in general and left-wing West Europeans in particular. I would as soon use them as a guide to proper action as I would The Devil’s Handbook.

    • Norma Brown, don’t you wonder where they have their money?

  • The Judge is correct. If the money has already been taxed, once moved the government should have no access to the interest earned.

    Let’s be real, if you put your money in a CD today that pays 1.2% you will make virtually no money. In fact, when time is factored into the equation, you actually lose money.

    There are better ways to put your money to work http://www.heritagecole.com/about/

    • sandstone, he’s right, and yet we have this law…’bad law’ as the Judge says. We have no defending fathers in Congress.

  • Pingback: Teeing it up: A Round at the LINKs (St. Patrick’s edition) | SENTRY JOURNAL()