Shout, shout, knock your self out, no one is listening

My friend Graham Keighley sent me this following statement regarding the new law that goes into effect Jan 1, 2013. 


What about this new 30% withholding on funds sent via an international wire that flows from or through the U.S. banking system? First, it originates in the recently passed HIRE Act, the so-called Jobs Bill. No, it doesn’t have anything to do with employment…but there you go. Politics. Second, it isn’t yet in effect but is scheduled to take effect starting Jan. 1, 2013. Third, no one right now knows exactly how this will all shake out. Many believe, and it seems likely, that banks will err on the side of caution and simply withhold the 30% on nearly every international wire transfer made using the U.S. banking system. Excluded it seems will be transfers to yourself (that is, when the sending bank account and the receiving bank account are titled in the same name), as well as (critically) transfers to countries that have signed exchange of information treaties with the United States (this is the leverage being brought to bear). When buying real estate overseas, you typically transfer the required funds to the seller, your attorney, or to an escrow account. In other words, the transfer isn’t typically made to your own account in the country. You probably wouldn’t have one (perhaps you wouldn’t be able to open one, depending on the country and the circumstances) before making the real estate purchase. This means that it’s likely 30% of your transfer would be withheld. The seller probably isn’t going to go along with the suggestion that he wait to get the remaining 30% of his purchase price until after you’ve gotten it refunded by the U.S. government. Meaning you’ll have to inflate the amount of money you wire for the purchase by enough to cover the withholding.  This could be expensive. In fact, you’d have to wire US$142,857 to net US$100,000 on the receiving end.
We’ve been reporting on this issue in recent weeks, and readers have been getting in touch with questions as well as to suggest possible solutions. One alternative offered by a reader was to FedEx a cashier’s check. While this could work for U.S. dollar transactions, the timing would likely get complicated. Foreign banks typically don’t release funds for a cashier’s check any sooner than they do for a regular check. In Panama, it takes three weeks for funds to clear when you deposit a check from the United States. Building this delay into your purchase timeline could be fine…or it could create a problem for you. Additionally, sending a U.S. dollar check for a non-dollar purchase means you have a currency risk during the time it takes for the check to arrive and clear. If the exchange rate goes against you in the intervening days or weeks, you could find yourself short on the amount due to close. Moving large amounts of cash across international borders legally requires a lot of paperwork and planning, and I don’t recommend that you attempt it less than legally.
So what’s an international investor to do? Start moving your investment funds outside of the United States now. Diversify your assets among different jurisdictions, different accounts, and different currencies before Jan. 1, 2013. I believe this will be the real, though unintended, effect of this new law. More money will move out of the United States more quickly than it would have otherwise because of concern over how this potential 30% withholding is going to affect even average, every-day, law-abiding, tax-paying Americans trying to manage their own assets and plan their own financial futures. While the withholding isn’t a tax, as you’ll be able to claim it back on your tax return, it is a nuisance and a cash flow issue. It puts the burden on you (as the American who wants to stay IRS compliant) to file for the refund and to be able to show to the IRS’s satisfaction that no tax was due in the first place. Our offshore and tax attorneys will keep us updated as the international banking community continues to process the implications of the new tax laws buried in the HIRE Act. Meanwhile, diversification is, as always, the best way to keep yourself from being at their mercy, however they play out.
(Note;  In Mexico, the way around this would be for you to apply for an FM3 immigration status which would allow you to open a bank account in your name.  This would allow you to transfer funds to your own bank account here with out being assessed the 30 % withholding tax.  Applying for and FM# status is simple and costs about $180 usd per year.  You do not have to be a home owner to apply. 

philosblog asked: Great job Philo.

Thank you very much.

Have you ever wanted to really get away from it all?  Somewhere really different?  Somewhere quiet, exotic and truly mind altering?  Well, then how about a trip to a 400 year old mining town of 600 people located in the Mountains in Mexico? The following is an excerpt from vallartainfo.com.

Home Page Tours in Puerto Vallarta General Information Maps of the Area Hotels in Vallarta Transport in Vallarta Vallarta Restaurants Vacation Rentals Prices in Vallarta Insider Tips for Vallarta Outside of Puerto Vallarta Local Customs Events Calendar Real Estate Vallarta Street Food Golf Courses Art & Galleries in Vallarta Beaches around the Bay Photo Gallery Fables and Legends Churches & Charities E-Mail
Up behind Puerto Vallarta in the Sierra Madre Mountains is an old mining town that has a completely different atmosphere than Puerto Vallarta. At 4,500 ft. with pine trees, the air is crisp and clear and at night it can be quite cold.
In the surrounding valley you’ll find cattle, corn and coffee plantations. This local coffee is excellent and you can sample and purchase it in town.
Founded in 1605, San Sebastian del Oeste was one of the gold and silver mining centers of Mexico. At one time a provincial capital of 40,000 people, you will find it strangely deserted with only about 600 people living there now.
The Plaza, it’s Bandstand and surrounding buildings are typical of the colonial period.

The mines were, in part, responsible for the start of Puerto Vallarta. Then know as Las Peñas and consisting of just a few huts at the mouth of the Rio Cuale, it was used to supply the mines with salt which was taken by mules up to San Sebastian and other mines in the High Sierras and used in the smelting process. The silver and gold from the mines was sent, again by mule train through Guadalajara and Mexico City to Veracruz, where it was sent, once a year, to Spain

The church, dedicated to San Sebastian, was originally built in the 1600s but was rebuilt after an earthquake in 1868.
The mines are long gone, although the ruins of them are still there, some distance from the town  

It is a joy to wander around in this is very peaceful town, which has changed little in hundreds of years. More Photos
There are a few restaurants in town but not many places to stay. One great little restaurant is Montebello, an Italian Restaurant run by my old friend Coco and her husband Walter. If you face the Town Hall (on the east side of the square) her place is down the side street on the right, Pipila # 11, call 297-2883 or ask anyone. Web Site.
A short distance from town is the the Hacienda Jalisco, once the headquarters of the mining company, beautifully restored by expatriate Bud Acord, where you can stay, maybe in the same room used by Richard Burton and Elizabeth Taylor. See below.   Getting There

By bus, two hours, cost 65 pesos.
Three ATM Red Line busses leave every day to Talpa de Allende from the corner of Calle Lucerna and Calle Havre, red on the MAP in Colonia Versalles, at 9AM, 2:30PM and 6:30PM. Two Blue Line busses at 6:30Am and 4:30PM leave from behind Plaza Las Glorias, blue on the MAP. You can purchase your ticket there when you leave or purchase the tickets at least one day in advance. The busses do not go all the way, but stop at La Estancia, on the way to Mascota, where the side road goes to San Sebastian. It was usual to then hitch a ride from someone going there, now there are 8 taxis at La Estancia to take you the rest of the way.

They also have a tour by land on Monday, Wednesday & Friday, cost US$76 per person. Info.
Superior Tours will take you for US$28 per person, if you can get 10 people together (the whole van is US$280 min) - Info Click Here

You can also drive there yourself, with the new road and bridge about two hours - see Map.

Staying There

At this moment the Hacienda Jalisco is the best place to stay. A wonderful old colonial Hacienda, built 170 years ago by the Spnish, with tall ceilings and a fireplace in every room - it gets cold at night. There is no electricity, evenings are lit by oil lamps and candles, there’s no telephone.
Many famous people have stayed here in the past.
Rates for Hacienda Jalisco are 770 pesos per person, in the summer, including breakfast and dinner, or 550 pesos with just breakfast.
In the winter 820 pesos incl. breakfast & dinner, or 650 pesos with just breakfast.
A chauffeured vehicle or horses are also available for hire. Private transport to and from Puerto Vallarta is available.
No children under 12 years old and no dogs allowed.
Web Page.  

The Plaza, it’s Bandstand and surrounding buildings are typical of the colonial period.

It wasn’t long ago that we had an insurance symposium here at Philo’s.  Three speakers spoke of three different types of insurance in Mexico.  Each speaker had about thirty minutes to discuss their option for the three main insurance concerns that expats and/or foreigners are interested in.  Here is a brief synopsis of each discussion. 

1. Evacuation insurance 

A representative from SkyMed, the emergency medical evacuation membership program in North America spoke to us about evacuation insurance.   

Skymed is specifically designed for Americans and Canadians who want to be absolutely sure they can go HOME to their city of choice in the United States or Canada, in case of a medical emergency.  SkyMed members pay nothing - membership pays 100%.  Memberships start as low as $29.00 a month.  If you are interested click on this address www.skymed.com/mariasierra or call Maria personally at …..322 120 3009. 

2. Private health, auto and home insurance. 

This discussion was lead by Clement Celis Uribe.  Clem is an insurance broker who represents and sells insurance for several different insurance companies.  I have health, home and auto insurance policies that I purchased from Clem.   

My health insurance policy costs me about $550 usd every three months.  Quite a bit less than I was paying in the US in the 1990’s.  This policy has a $2000 deductible so it can be considered a catastrophic insurance policy.  Like most policies it can not be purchase after the age of 65.  If you have the policy before you turn 65 you can keep it until you die. 

I also have Mexican insurance on my car and my home through Clem.  For more  details contact Clem at   jc_celisu@hotmail.com

3.  Mexican IMSS (Mexcian Social Security health insurance.)

This discussion was lead by Jose Maria Gracia Bravo.  Jose works for the department of Social Security in Mescales.  

Unlike the private insurance, there is no age limit on signing up for this Insurance.  I signed up several years ago and am paying a little less than $300 U S Dollars per year for this insurance.  I am covered for any medical problems as well as any dental problems that I might have.  I have used it several times now and have been completely satisfied with the results.   This insurance even pays for bus transportation to Guadalajara or Mexico City if the need to use the facilities there should arise.  

For more information about the program see your local IMSS person at the IMSS office near you.  Or, if you would like more information and/or help applying for this insurance please contact:  Maria at 322 120 3009.  Maria’s email address is:  mariasconcierge@gmail.com

Maria Charges $75 usd for taking you through the application process.  It is well worth the money.     

Changing America’s Broken School System

 “Until the 1970s, United States public schools were among the best in the world. Today, among 30 developed countries, the US ranks in the bottom third: 25th in math and 21st in science. Even during the worst recession on record, the country’s high tech industry couldn’t find the engineers and programmers it needed and had to recruit elsewhere. By 2020, the country will have 123 million high-skill jobs to fill and fewer than 50 million Americans qualified to fill them.”  http://www.tonic.com/

How long are we going to put up with our broken school system?  People try to identify the problems and then hope to find solutions.  Take one problem at a time, they say.  But the problems that face our schools and our teachers are not easily fixable given the existing environment.

Having taught school for ten years in a completely different type of school, I can say that my take on the broken system is quite different than what most others see as problems.  These disturbing facts were taken from an article published on the NPR web site.

http://www.npr.org/templates/story/story.php?storyId=14055656

• One-third of American eighth graders cannot perform basic math. That means more than a million thirteen-year-olds can’t do the simplest calculations needed to buy a candy bar or ride a bus.

• One-third of all teachers leave the profession in their first three years; by five years, half of them have left.

• A black child in Washington, D.C., has less than a 30 percent chance of learning how to read before he turns ten.

• The odds that any given ten-year-old in a large American city can read are about fifty-fifty, and six in ten for the nation as a whole.

• Only one in five students entering college are prepared for college-level work in math, reading, writing, and biology.

And yes, there are to many kids in the classroom, and not enough good teachers, and crime is rampant in the schools, and curriculums are to ridged, and a whole host of other things, none of which I see as problems.  I view these things as symptoms of a much larger problem, and, if viewed under a different light, a very fixable problem. 

Where do we start?  Well, how about we start by tearing down our schools.  No, I mean that literally.  We tear down our buildings and we start over. 

The first of my three years of teaching took place in San Francisco’s middle schools and high schools.  Some rough duty I can assure you.  Fresh out of college, armed with my new teaching credential, I was learning my chops by substituting for teachers that were out for the day or week and sometimes longer. 

What I did not learn was how to teach.  In those huge monolithic buildings with up to 4,000 students I learned other things.  What I did learn were survival techniques.  I witnessed teachers that were afraid to go a particular bathroom because that was the dangerous bathroom.  I watched them look both ways when coming out of their classrooms to make sure the hallway was safe.  I watched them avoid certain hallways if they saw congregations of kids of a certain ethnic group.   They didn’t leave their cars in the school parking lot but rather parked them a couple of blocks away so it didn’t get keyed or end up with broken windows.

I also came to realize that the teachers were way over loaded.  Most had 5 or 6 classes a day, with 30 or more students in each class and up to 190 total students.  They were lucky if they knew the names of maybe 20 or 30 percent of their kids.  Maybe, if the teacher was really conscientious, he or she new 5 or 6 of the kids parents.  And, for hanging out with the kids after school or at lunchtime, forget it.  That just didn’t happen.  How does a teacher overcome these obstacles and be an effective teacher?  It’s nearly impossible.

My next teaching assignment came in 1976, in the Mendocino County school system also in the State of California.  Mendocino high school was a smaller school with a total of about 350 kids.  They were having their problems too, but their biggest problem was having 38 percent of their students dropping out before graduation.  Because their ADA (average daily attendance) had fallen dramatically, the State of California, (which based their allotment of tax dollars on attendance), reduced their funds. Their schools were hurting for money and they needed to do something fast.

Don Kirkpatrick, a forward and progressive thinking educator, was hired as superintendant of the Mendocino’s school system.  His idea was to start a Community School.  The objective of this experimental school was first and for most, to get the kids back in school and engage them again.  

The County provided the building and the teachers were hired by contract.  The small company that held the contract that provided the salaries to the teachers, was paid a percentage of the ADA monies.  So, the more successful the teachers were in getting and keeping the kids in school, the more money the teachers made. 

The brilliance of this model was that the teachers were motivated partly because of their self-interest, i.e. more students, more money.  This meant first getting the students and then engaging them to keep them enrolled.  This small School model offered a real alternative to the big cumbersome schools that I had just come from. 

Perhaps contracting teachers for their services might be to bitter a pill for the teachers unions to swallow.  However the model of the small community school might be a welcomed difference to the teachers working in the huge school factories that exist out there now. 

My first experience with a public school was attending a one-room schoolhouse outside my hometown in Stephenson Michigan, located in the upper peninsula of the State.  That experience taught me a lot.  What I remember of that time was the school had a total of about 40 students of all ages up to the 8^th grade.  I remember that my older sister was three grades ahead of me and that my cousins were also in the same classroom.  I remember going to them when I need help with my schoolwork.  We knew the teacher, and the teacher knew all of the students and most of the members of the student’s family.

What a great model to emulate.  Small community schools spread through out the neighborhoods where everyone knows everyone else.  How many problems would that solve?  Well, for starters it would put teachers back in control.  The existing student anonymity in our huge classrooms and humongous schools, translates into individual irresponsibility and student apathy.  It is just way to easy for a child to slip through the cracks. 

So how about dismantling our huge buildings and setting up smaller community schools throughout our neighborhoods?  A school where the teachers would know all the students because the students would stay through their entire first 7 grades or their entire last 6 grades.   And, because the students would come from the immediate neighborhood, the teachers would know most of the parents, grandparents and siblings. 

How great would it be for a teacher to be in an environment like this?  If you had a problem student you would just call their parents and you would know those parents because this is your neighborhood.  Maybe a couple of years before, you had the student’s brother and perhaps even the student’s parent in your class.  And, you wouldn’t just be passing the student on to another teacher at years end.  The student would be one of the small number of kids that you would have, for multiple years, in your neighborhood community school. 

After tearing down the huge old buildings, the property where they once stood could be used for groupings of smaller satellite school centers. Special centers where kids could congregate with other students from other community schools.  These centers could provide day programs and after school programs where the kids could participate in sports, music programs, art classes, computer and science labs, and other essential programs that would exist at these centers. 

If community schools were located in neighborhoods through out the city it would be easier to offer classes to adults, or the learning impaired, or the physically impaired.  After all, the school would be just around the corner or just down the street.  Public education would not and should not stop at the end of the 12^th grade.

Tearing down our schools, building new buildings and re situating them throughout the cities would be a very expensive proposition and would take years to accomplish.   However, this year alone we will spend 100 billion dollars on the war in Afghanistan, another 100 billion dollars on the war on drugs and who knows how much money on the social problems that exist solely or partly because of our failed schools. 

When you put this into perspective it doesn’t seem like it would be a bad investment.  We could try changing to a smaller community school based system in just one district in one of our problem Cities.  If we have good results, we could tackle the rest of the City and then on to other inner Cities expanding outward from there, one step at a time.

Really, what are the reasons for these huge factory type monolithic structures anyway?  Are they just a way to save money?   Just how much money are we really saving when we factor in the costs of all the social problems that result from our bad schools?  

There are Charter schools out there now that are experimenting with smaller schools with more individual care.  These schools are for the most part private and deserve our support.  However, the powers that be, in the government and public school system, need to step up and make some changes that will actually produce some results.   I think our children, and our society needs and deserve a better and safer a school system.

Footnote:  In my last year of teaching at the Community school in Mendocino, our school, thanks to our brilliant director Charles Bush and the other incredibly gifted members of the staff, won the Golden Bell award.  The Golden Bell award was given to the best alternative school in the State. 

You are right about the nature of the violence, (in Mexico).  It is cruel and inhuman.  However be forewarned.  This show is coming to a town near you.  Just google Cartels moving into the US.  This from a site called Crime spider. 

Mexican Cartel Problems Spill Into United States

“The Mexican drug cartels waging the violence in specific cities are competing for the distribution rights in the lucrative marijuana, hashish and cocaine markets within the United States. The DEA claims most of the Mexican cartels have become the “delivery service” for cocaine that originates in Colombia, Ecuador, Peru, Bolivia and Venezuela. This export service has grown to include violence. The Department of Justice is reporting that cartel “hit teams” have carried out murders and kidnappings in more than 230 American cities.”

And if you don’t think that American thugs are capable of such atrocities remember your history lessons.  Remember the Tommy guns of the Prohibition area and the indiscriminate slaughtering of the mobs and the killings in the speak easies of innocent people.  How about the Saint Valentine’s day massacre?   Human nature is human nature in every culture and greed makes the very worst come out in man.

In the mean time you are right and I will be careful here.  I do love Mexico and I want things to change.  We need to change the drug laws.  However that probably won’t happen in my life time.  What Mexico will do next, will be to reelect the PRI party candidate and they will stop the war on drugs and it will go back to some dramatically reduced level of violence.  The US won’t like that but hey, the US, they are the ones causing most of the problems.

America needs to change its drug laws.

America needs to change its drug laws.  It is criminal what the USA is doing to Mexico and other Latin American Countries, and to Afghanistan, not to mention what it’s doing to its own society.

The flow of money and guns from the sale of illegal drugs, to Latin America, is one of the primary reasons for South America’s swing to the radical left.  The drug lords now control large parts of many South American countries, and through the funding and bribing of politicians, is dramatically changing the face of government in Latin America.

In Mexico, some northern states are said to be on the verge of tipping toward being totally controlled by the Cartels.  Think of it.  Criminals are right now taking over the government of America’s southern neighbor.

Terrorism from the Middle East is being fueled by opium and heroin derived from poppies grown in Afghanistan.  Without the money from the illegal sale of these narcotics, terrorism would lose a lucrative source of it’s funding.  The majority of those drug sales are made in the U.S.

America’s futile war on drugs has cost the U.S. $1 trillion in the last decade alone.  That money would have been better spent on fixing America’s schools; repairing the US infrastructure; and paying down America’s national debt.   It is past time, but not too late, to take a refreshingly objective look at how we deal with our drug problem.

All drugs, with the exception of pot, need to be legalized and regulated. I say not Pot because I believe that there is a strong and compelling argument for the complete legalization of Marijuana, however, hard drugs such as cocaine, meth, and heroin should be legalized and regulated under the law.

As it stands, there is no problem for addicts getting their illegal drugs now, even though they are illegal.  And yes, they are illegal and there is the potential of spending time in prison, and yes they are expensive and yes they are extremely dangerous to obtain, but that does not stop users from getting them, and using them.

However if there were a place where addicts could go to get their drugs and along with counseling, and perhaps see a medical physician at the same time, it would be far better and much less expensive for our society. 

So, what kind of a model would make something like this work?  If drugs were legalized and regulated, anyone wanting to do drugs would need to register and get their drugs from a government licensed source.  They would have to register as drug users.  Their name would be put on a users list and made available to employers, licensing agencies, etc.  That would mean that hard drug users couldn’t, for example, be licensed to fly planes or do other public endangering activities.

If someone were caught doing drugs, they would automatically be added to the users list and issued a card to enable them to purchase drugs.  No jail time.  No clogging the judicial system.  No nothing.  Just the stigma of being put on the users list.

That list could become a very strong deterrent, but without fines and prison time and the other expensive social costs associated with criminalization.  There could also be a path one could take to get removed from the users list, such as periodic drug tests to prove drug use has discontinued.

Yes, there would still be some illegal demand for drugs by people who want to do drugs without being on the users list.  However, if every time someone was caught doing drugs without a permit, they would automatically be added to the list, and a natural attrition of illegal users would result.  Eventually, the illegal sales of those drugs would become a trickle compared to what is happening now.  And remember, these same people are already getting their drugs this way.

This approach would remove the extraordinary profit from trafficking illegal drugs, and thus the motivation for people to sell them, resulting in less illegal drugs to buy.  

If drugs were dispensed by government licensed pharmacies, they would cost only a fraction of drugs currently sold illegally on the streets.  If addicts were making a choice between good quality, inexpensive, regulated, drugs and illegal street drugs, they would be more apt to choose the less expensive, better quality drugs.  Certainly that would be another reason why the sale of illegal drugs would be reduced to a mere trickle compared to what is happening now. 

If drugs were legal and regulated they would become less expensive.  Addicts wouldn’t need to commit a crime to get the money that they need to pay for the high prices that drug dealers are currently charging them.  Taking drugs off the street would mitigate gang warfare in the cities. Schools would become safer.  The problems with guns and the crime associated with drug trafficking would all but disappear.  

It could also take our kids out of the drug culture.  No pressure to do drugs because someone is trying to make money from the transaction.  The coolness factor, and the peer pressure would also diminish.  Kids wouldn’t be able to buy drugs so easily from their friends anymore.

It would also be safer for the addicts, because drug doses would become more consistent.  Less drug-related deaths.  Not only would they be getting safer drugs, but also counseling and help with other drug related issues.

There would be less need for police, and less need for prisons.  There would be fewer criminals in our judicial system clogging up our courts.  There would exist an all around safer environment.

This is just the beginning. This is just one model. There are other models that exist out there.  They should also be considered.  This is an important issue for our society.  There needs to be a free and open dialogue on this issue. We need to devise a system to resolve this drug problem.

There is nothing to fear.  We need to do this for our children and for the children in the countries that are being devastated by our unwillingness to bring this discussion out in the open and do something about the problem. 

Much of this, not to mention the end of the drug war, could be accomplished by legalizing and regulating drugs.  Let’s move toward a saner drug policy. This reckless and insane policy we have now, is crippling our society and perverting our culture.

Here it is Folks.  This is my youtube channel.  This is where all my videos live for my new album “South Of The Border.”  I hope you enjoy.

http//www.youtube.com/user/Philohayward#p/a