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The Republican party is generally claimed to be the party of fiscal responsibility. Note the term "claimed" here; I do not think the record of Republican governance proves this claim at all well, but nonetheless the default expectation seems persistent. When I was younger, this was certainly a selling-point of the party to me, and I voted for Bush II in the hope that he'd get government spending under control. Then 9/11 happened, and he wasted trillions wandering our military through the middle east.
Now the debt is very bad, and people are once more raising the banner of Fiscal Responsibility. Is it in Republicans' interest to enforce "fiscal responsibility", and if so, how? If we were to seriously cut spending and raise taxes, as people claim the fiscal situation demands, this would almost certainly cost us the next election. In the best possible case that I can see, we would be expending our political power to create stable economic conditions for our opponents to then rule. The more likely case would be us expending our political power to ameliorate spending that our opponents increase to gain power for themselves, resulting in a much shakier economy and our complete political irrelevance.
Why not offer the Fiscal Responsibility mantel to the Democrats? The economy is very complicated after all, and they are at this point clearly the party of Expert Opinion: who better to determine and implement the hard-nosed measures necessary to right our economic vessel? When I was younger, the obvious rejoinder would have been that they would do a bad job of it and disaster would result, but it seems to me that we have not done all that much better, and disaster seems likely in any case. If disaster cannot be meaningfully avoided, then why expend limited resources demanded by a serious political conflict on an unfixable resource-sink of a problem? What's the actual plan, here?
The US unironically needs to raise taxes on the rich (I mean actual rich, not those earning large salaries). (Non-land) Wealth taxes are usually bad, but with the global reach of the IRS and their policy to tax worldwide income, there's no reason the US can't easily adopt a policy of taxing worldwide assets without too many bad side effects. This would raise significant money, imagine even a 1% worldwide non-US housing asset yearly tax on all US permanent residents and citizens (temporary residents get a pass because you don't want to discourage smart wealthy people from the rest of the world coming to the US), it would easily fill the black hole.
Why then would the wealthy hold such taxable property in their own name? It will be in a trust or foundation or in the name of their foreign cousin.
Second order effects dominate here.
Trusts and foundations can also be taxed like the UK does today (6% of their assets every 10 years, but equivalent to a 1% yearly tax is more like 10.5% every 10 years). The foreign cousin problem is harder to fix, but then again, if you're in the top 1% do you really trust your foreign cousin enough to not run away with your $40 million you've just put in his name legally? Very likely you'd want to insure against this risk and I think the yearly rate for such insurance would be above 1%. At that point it's just cheaper to pay the tax...
Trusts and foundations can be taxed by the country in which they are incorporated. Poland can't just randomly start taxing Italian foundations.
They can if the trust holds Polish assets or the ultimate beneficial owners of the trust are Polish (they shouldn't though because they don't have world hegemony or something equivalent to the IRS, they actually need to remain attractive to capital to succeed). All you do is require US citizens and permanent residents to declare details of any trusts they benefit from, subject to the usual penalties the IRS have if they fail to do so and then tax the value of them. Plus you put in FATCA sanctions for any place which doesn't willingly share this info. Already most places in the world don't let US citizens open bank accounts easily because of all the extra regulatory burden the US currently imposes on third countries for US persons, there's no reason they can't extend that to trusts and foundations.
This is something that only the US can do btw due to its exorbitant privilege, a very bad idea for basically any other country.
Discerning the true beneficial owners through multiple layers of indirection is highly non-trivial. Threatening sanctions over it isn't addressing the core issue: the majority of countries (mostly) readily turn over specific details pursuant to a particular investigation.
They can extend to US trusts and foundation, but when a Qatari firm shows up, that's not gonna apply.
[ It's also quite clear that the wholesale financial surveillance required here would make the debanking phenomenon seem quaint by comparison. A superweapon kind of thing.
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