The HIRE Law, Another of Obama’s Threatening Plans
On March 18, 2010, when the President of the United States, Barack Obama, signed the Incentive Law for hiring and restoring employees – known in English by its initials HIRE – perhaps only a few United States citizens completely understood the large extent of the changes made by the proposed legislation. Fears of the content of the law’s articles are growing at the same level in which the law approaches coming into force (starting in 2014).
Some experts feel that with HIRE it will be much more difficult and expensive for North Americans to move their personal revenue outside of the country. This will have a negative influence on those citizens who live outside of the country or who are planning on doing so in immediate future. At present there are many Americans who, when faced with heavy taxes and the internal crisis, have decided to invest abroad, since they can’t find a way to maintain the high cost of living in the United States. These plans are in danger with HIRE.
One of the main articles of HIRE relates to the increase of reports and the payment of taxes for any monetary transfer that is sent outside of the United States or is associated with foreign accounts. Furthermore, it stipulates that certain foreign banking institutions will have to pay a tax when receiving these transactions.
Another controversial point with HIRE is the section regarding the individual Disclosure for active financiers abroad. This section obliges Americans to reveal and report any type of interest in determined financial activities abroad. With HIRE, the citizen must show: a) the name and address of the foreign banking institution where you have your account, as well as your account number; b) the name, address and all information relating to shares owned by the citizen living abroad. These data must be precise for identifying the type of shares.
The breach of any HIRE clause will have heavy financial penalties. For example, not revealing requested information will receive a penalty that varies between 10 thousand and 50 thousand dollars.
Furthermore, through HIRE, the IRS is trying to obtain 30% of currency transfers sent abroad. It is specified in the law that the retention of taxes goes to the IRS and that it is done to ensure the requirements of reports on foreign accounts that belong to North American citizens or northern entities. This clause states that this retention will be 30% on “any transfer or payment made to a foreign bank institution.”
Faced by these disagreeable perspectives, some experts feel that United States citizens are increasingly searching alternative and secure alternatives (among which second passports, offshore accounts, and offshore companies) for moving their money abroad or for just keeping there. This way they will avoid persecution from the IRS which, without a doubt, will increase with the implementation of HIRE.