# Coming soon to a theater near you...



## lat19n (Aug 19, 2017)

We have always been worried something like this would happen here between US <-> Mexico. Whch is why we have Mexican accounts. 

https://www.zerohedge.com/news/2017-12-30/china-launches-new-capital-controls-puts-15000-annual-cap-overseas-atm-withdrawals

Now - a lot of people could live very well on $15K USD in Mexico. And this may only deal with ATM withdrawals. But still... Keep your heads up.


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## chicois8 (Aug 8, 2009)

Nothing in the article mentioned US or Mexico ATM withdrawals just Chinese citizens...Many expats live in Mexico very nicely on $1250 USD and less each month.....

I remember the peso devaluation from 3000 to 3 overnight, that is why I would never have a Mexican bank account.. I use Citi bank which owns Banamex with fee free withdrawals......


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## lat19n (Aug 19, 2017)

chicois8 said:


> Nothing in the article mentioned US or Mexico ATM withdrawals just Chinese citizens...Many expats live in Mexico very nicely on $1250 USD and less each month.....
> 
> I remember the peso devaluation from 3000 to 3 overnight, that is why I would never have a Mexican bank account.. I use Citi bank which owns Banamex with fee free withdrawals......


For clarity - are we talking 1994 ?

Edit : we also have a small account at Banamex - but we have it only for an emergency (like if our primary bank went away). They really pay crappy returns. Even their patrimoinal accounts under perform.


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## eastwind (Jun 18, 2016)

China is not the US. 

China is trying to do the impossible: to control and set domestic interest rates, to control and fix foreign currency exchange rates, to limit capital outflows, and to manage and limit the amount of dollars held by their central bank. Economic theory says in the long run this is impossible. George Soros made a lot of his money by breaking the Bank of England when they tried it. Eventually China is going to have to give up its attempt, but it will probably try additional currency controls first.

A large part of the real estate bubbles in Seattle, Vancouver, and Canada, the US and Australia in general is due to Chinese buyers trying to get their cash out of China and parked in a "safe" investment. A lot of the run-up in crypto currenices is due to Chinese buying, again trying to get their money out of the country. 

The US doesn't try to prevent any capital from moving around at all, except to try to interdict drug and terrorist money flows.

China had already instituted quite a few capital control laws before this. If, against all rational expectations, the US starts down the same path, you can expect a similar gradual ramp up of capital control rules, and you'll have plenty of warning long before they get to the point of limiting your ATM withdrawals or doing anything that directly affects most people.

The one thing you're most likely to see along these lines from the US is limitations on anonymous cryptocurrency accounts. I expect they'll clamp down on that soon, probably sometime next year, because of the potential for money laundering, terrorist finance, and other illegal financial transactions.


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## chicois8 (Aug 8, 2009)

For clarity - are we talking 1994 ?

Was there another time it went from 3000 to 3? LOL

I only use Banamex ATM's , no accounts.....


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## RVGRINGO (May 16, 2007)

The USA put limits on dollars going abroad in 1960, even suspending foreign travel by families of military personnel stationed abroad. I had gone abroad; car and household goods were shipped, but then the government held my wife‘s and children‘s passports to prevent them from following, as intended. They were stuck in temporary quarters with only sweaters, and winter approaching. It took a special intervention by my congressman to get a USAF Colonel to personally deliver their passports. Holding them was illegal. However, they were not granted the previously scheduled military flight arrangements to join me. So, we had to pay for their tickets to fly. By the time our tour abroad was completed, the issue had been “resolved“ and the restrictions lifted & we all flew back to the USA at government expense. I still have a sour taste from that experience.


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## lat19n (Aug 19, 2017)

Let me start by saying I am on thin ice here - But there was some politician on US TV this morning saying how the new tax reform was going to impose a 15% tax on foreign bank holding of US corporations. Can that be true ? Also take AT&T. AT&T Mexico is a totally different business entity than AT&T US. HSBC has locations all over the globe. Each is an independent business entity.


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## eastwind (Jun 18, 2016)

The law prior to the tax reform was that corporations had to pay US income taxes on income (profits) earned overseas when they brought them back to the US. The tax rate was whatever that corporation's tax rate was, which varied depending on what loopholes and special provisions they'd managed to lobby for, but could be over 30%.

Some corporations with overseas profits, most notably Apple, chose to keep their overseas profits overseas, untaxed, and not bring them back. All together, such corporations built up over 2 TRILLION in untaxed profits held overseas. They then lobbied for a special amnesty/tax holiday that would enable them to bring the money back tax-free. That would have been a mighty unfair screw to the individual tax payers because money that the corporations don't pay either adds to the deficit or has to be collected from individuals. The corporations succeeded in getting an amnesty passed in 2004, but that didn't do anything to solve the cause of the problem, so the $2T+ has all been built up since then. 

What the Trump tax plan does, if I have my info right, is it effectively forces all the untaxed profits stored overseas to be considered brought back, right now, and taxed, but the compromise is that the profits are taxed at a lower rate of 15% than they would have been had the corporations been bringing their income back all along under the old system. 

That clears up the old system. The Trump tax law also changes the system going forward in ways I'm less clear on but with the promised result that corporations will pay their taxes when they earn their profits, and there won't be this option of temporarily avoiding taxes by stashing untaxed profits overseas. 

There has been some spin that this 2+ Trillion dollars, less 15% for the government, that is brought back will be used to create more jobs and investment. That's probably mostly hooey. A lot of the money will be used for paying down debt, funding pensions, stock buybacks, special dividends, and takeovers of smaller companies. The reason for that is interest rates have been so low for so long that most corporations have been able to cheaply borrow all the money they want for expansion, job creation and investment in the business. If they needed cash to grow the business, they probably already had it. So this money from overseas will likely be used in ways corporations typically use cash they _don't_ need for investing in the business. A lot of it will flow back to the owners of the business, the shareholders.

Overall, I think it's a good way to close the loophole, clean up the problem, make corporations pay at least some of their fair share, and make sure the problem doesn't repeat. A higher tax rate, say 20%, would have been more fair to individual taxpayers (aka hard working Americans).


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## chicois8 (Aug 8, 2009)

So Trump will save 50% on taxes on his Chinese factories making " America First" red baseball caps and all his other overseas companies.........


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## lat19n (Aug 19, 2017)

Eastwind: I think I already knew most of what you mention - but back to my AT&T example for a moment. Does a US shareholder in AT&T have even a sliver of interest (ownership) in AT&T Mexico ? What is Trump going to get from AT&T Mexico ? For example...

My wife and I, on the other had, have to pay first Mexico on our investment income and then pay the US on top of that. Sure we can file the foreign tax credit - but still. It irks me that any Mexican fulfills their tax burden but we have to pay more to the US. I tell myself that that is the price I pay for the ability to have made a decent living in the US during my working years - but it still doesn't quite fit.


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## eastwind (Jun 18, 2016)

I have no idea about AT&T's corporate structure, and a quick web search didn't turn up anything helpful. When it comes to international corporate structure, it varies by corporation, no two are identical.

Ascribing to Trump the ability to get specific measures through the congress that particularly and especially benefit his businesses is giving Trump a lot of credit for influencing what was written by a congressional committee. Moreover, the democrats in congress, the senate, and all their staffers would have to be universally a bunch of useless idiots to allow a provision like that to get through without calling it out specifically. Oh, and the press. Does anyone believe such a thing could get through without at least one media analyst noticing and reporting on it?


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## lat19n (Aug 19, 2017)

I can not stomach Fox News. I also can no longer stomach Morning Joe and his wife. BUT - I thoroughly enjoy Rachel Maddow and her approach to the news. (We have a Roku device and VPN).

Edit : Personally I would not mind the IRS dropping any audit reviews on Trump just to allow him/they to release his returns for review. I do not think it is that unusual for an employer to ask questions of an employee to determine if they have any outside interests that might affect the business.


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## lagoloo (Apr 12, 2011)

lat19n said:


> I can not stomach Fox News. I also can no longer stomach Morning Joe and his wife. BUT - I thoroughly enjoy Rachel Maddow and her approach to the news. (We have a Roku device and VPN).
> 
> Edit : Personally I would not mind the IRS dropping any audit reviews on Trump just to allow him/they to release his returns for review. I do not think it is that unusual for an employer to ask questions of an employee to determine if they have any outside interests that might affect the business.


Pardon the cynicism, but since when is DT working for anyone but hisself?


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## TundraGreen (Jul 15, 2010)

lat19n said:


> I can not stomach Fox News. I also can no longer stomach Morning Joe and his wife. BUT - I thoroughly enjoy Rachel Maddow and her approach to the news. (We have a Roku device and VPN).
> 
> Edit : Personally I would not mind the IRS dropping any audit reviews on Trump just to allow him/they to release his returns for review. I do not think it is that unusual for an employer to ask questions of an employee to determine if they have any outside interests that might affect the business.


What does an audit have to do with Trump releasing his tax returns. There is no law that tax returns cannot be released while they are being audited.


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## chicois8 (Aug 8, 2009)

lagoloo said:


> Pardon the cynicism, but since when is DT working for anyone but hisself?


Since Jan.20th. 2017 when he went to work for 320 millions Americans, at least he was supposed too........


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