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> Homeland Security To Confiscate Bank Safe Deposit Box Contents

6 April 2006, 21:40

Wow! I just tried your suggestion and got the expected reply. I expressed concern to my bank that if I opened a safe-deposit box, that because of the new HSA rules, that they might not let me take out what I put in. The bank clerk thought about it for a second and then, in a very low voice, told me that would only happen in case of a national emergency.

It’s no wonder that the wealthy are moving out of the US at by far the highest rate in history. According to US Census Bureau estimates, published in the "2000 Statistical Yearbook of the Immigration and Naturalization Service", they expected that roughly 370,000 US citizens and permanent residents would leave the US in 2003 and that estimate was made prior to the 9-11 terrorists attacks. How many of those people do you think were poor? (Hint: The poor come here looking for opportunity or with their hands out. The Rich are the ones with the most to lose.)

Also, comparison of the Merrill Lynch/Cap Gemini Ernst & Young annual "World Wealth Reports", over recent years has shown a significant drop in the number of millionaires in the US. These aren’t people who just lost money. The millionaires that they are talking about are those who dropped off the US financial radar screen. The only way that a US millionaire can drop off the financial radar is to move himself and his assets offshore.

When word of this new HSA safe deposit rule gets out, we can expect more wealth to move offshore. Some would say, "Let’m leave." But, just remember that the top 1% of income earners paid more than a third of the total personal income tax collected by the IRS in 2003 and the top 5% paid well over half (http://www.actionamerica.org/taxecon/irsdata.shtml). If the rich start leaving in large numbers, the rest of us will have to make up the difference. But, that would take a lot leaving, you might think. Oh, contraire. In 2003, the top 1% amounted to only 1.3 million taxpayers. At an expatriation rate of 370,000 a year, we could easily lose a significant portion of that top 1% in only a few short years and that assumes an expatriation rate that is stable at pre-Patriot Act levels. Other indicators suggest that expatriation of the wealthy has increased since that time.

If we loose a third of our tax base, the rest of us will have to make up the difference, to the tune of a 50% tax increase, just to stay even. What if we lose most of the top 5%? That could force a doubling of the current tax rate, just to keep revenue flat.

I’m not yet ready to pack my bags. But with this development, I sure think that it would be a good idea to put some of my money in some offshore investments, just in case. If things should continue the way the are and the government starts freezing assets or worse, it will give us some recovery capital, in a safe jurisdiction.