Obama's got this one right
Presidential hopeful Barack Obama struck a blow for sanity this week, co-sponsoring a bipartisan bill that would stop the new and ludicrous practice of patenting "tax-saving strategies." Based on an expansive reading of some court decisions that were odd to begin with, the Patent Office has decided that someone can claim that they invented a particular way to save taxes, stopping others from using the same method to reduce their own taxes unless the others pay whatever fee the "inventor" demands. It's one of the stupider things that has come out of the federal government in recent years -- and let's face it, that's saying a lot. The sooner it gets relegated to the dustbin of history, the better.
The same bill would crack down on the use by U.S. taxpayers of certain notorious countries as places to hide or shelter income from U.S. taxes. An interesting list of tax rogues:
Antigua and Barbuda
Aruba
Bahamas
Barbados
Belize
Bermuda
British Virgin Islands
Cayman Islands
Cook Islands
Costa Rica
Cyprus
Dominica
Gibraltar
Grenada
Guernsey/Sark/Alderney
Hong Kong
Isle of Man
Jersey
Latvia
Lichtenstein
Luxembourg
Malta
Nauru
Netherlands Antilles
Panama
Samoa
St. Kitts and Nevis
St. Lucia
St. Vincent and the Grenadines
Singapore
Switzerland
Turks and Caicos
Vanuatu
Ah, Netherlands Antilles. That one's been a lil' stinker for decades. Anyhow, good that Obama and his co-sponsors continue to think about the business of the nation while he continues to test the presidential waters.
| Posted at 12:08 AM | Permalink |
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Comments (6)
Personally I was thinking about trademarking the letters of the alphabet, or any combination thereof.
The Nickle
Posted by The Plugged Nickle | February 22, 2007 4:58 AM
Paradoxically, barring the "patents for accounting strategies intended to 'minimize, avoid, defer, or otherwise affect liability for federal, state, local, or foreign tax'" would seem to be a BAD idea. Let's say you give someone a patent on Strategy X, which tells how to reduce taxes by 10%. Now, the owner of the patent on Strategy X has exclusive control over that Strategy, unless someone coughs up some dough to use it, or takes out a costly license.
Alternatively, say the same person CANNOT get a patent on Strategy X and, so, merely publishes their Strategy in the next issue of Forbes. The Strategy is now available to anyone (practitioner and taxpayer alike) who wishes to implement it.
Which scheme will result in the greatest adoption of tax-avoidance Strategy X, the one implementing exclusive rights and a licensing scheme, or the one published without restriction in a newsmagazine of wide distribution?
Posted by Jud | February 22, 2007 7:46 AM
I've been quite concerned about Jersey for years.
Posted by stan | February 22, 2007 7:53 AM
Interesting point by Jud, However if you remove the motivation to create these schemes i.e. the exclusivity of a patent then parties are less likely to walk down the road of discover (see classic patent arguments)
More interesting is the absence of Ireland from the list. Many companies (Microsoft included) use a dual Irish structure that can reduce there tax burden to below 12 %. It ain't Zero but some have seen it as the Irish's way of getting back at the Brits and the rest of the continent for that potato thing.
Posted by travis b | February 22, 2007 9:25 AM
I need to go on a fact-finding mission to some of these places.
Posted by Jack Bog | February 22, 2007 4:01 PM
"Bahamas" yeah that one is coming up in the news a lot these days as being associated with nefarious activities.
"I need to go on a fact-finding mission to some of these places." You should make it a nice long trip, do a little research here and there, write a book and take a big fat deduction for the entire thing. All of the income flowing into a tax free offshore account of course.
Posted by UsualKevin | February 22, 2007 7:59 PM