Plutocrats Receiving Corporate Welfare Want To Turn Detroit Island Into Haven For Tax Dodgers

Detroit Park Would Have “Commonwealth” Status With It’s Own Laws, Currency & Tax Code

Steve Dibert, MFI-Miami

Ayn Rand Smoking While Collecting Medicare

Ayn Rand having a cigarette while collecting Medicare for lung cancer

A group of “free enterprise” activists have hatched an idea to buy an island park nestled on the Detroit River long the U.S.-Canadian border named Belle Isle from the City of Detroit for $1 Billion.  Inspired by the philosophies of Ayn Rand, the chain smoking author who preached the benefits of an anarcho-capitalist free market system while collecting public assistance for her lung cancer, supporters hope to transform the 982 acre island park into a 35,000 person free-market city-state with it’s own laws, currency, customs and tax code.

This idea of a libertarian fantasy island is the brainchild of Ayn Rand enthusiast, Rodney Lockwood, Jr., a developer of  government subsidized housing for seniors.    Supporters of the plan, most of whom made their fortunes as recipients of corporate welfare from either the state of Michigan and/or the federal government want to buy the island for $1 Billion and claim the concept of the Belle Isle Commonwealth, as it is being named, “champions freedom and opportunity”

Supporters include retired Chrysler President Hal Sperlich, who rode along with Lee Iacocca  to Washington, D.C. on September 7, 1979 with hat in hand to beg the Carter Administration and the U.S. Congress for an unprecedented government bailout of $1.5 billion ($4,756,632,231 in today’s dollars) and Clark Durant, co-founder of Detroit’s Cornerstone Schools, a multi-million dollar charter school system that is essentially a private school that receives tax money from the state of Michigan.  Groups involved in the plan include the glorified Ayn Rand fan club, the Mackinac Center for Public Policy who receives funding from the Koch Brothers, the Wal-mart heirs, Michigan Pyramid Marketing Pioneers, the VanAndel family and Lockwood who, as a board member of the Mackinac Center, openly admits to using tax subsidies and government loans for his development projects.

After reading the proposal on the website, it sounds like the plan was hatched after the concept’s creator, Lockwood read Ayn Rand’s “Atlas Shrugged” and The Fountainhead one too many times and began believing everything he read in those books as fact and not some piece of dystopian fiction.  He even wants to name the currency, “The Rand” which will be based 100% on commodities.  What Lockwood and his boosters don’t come out and say is that they want to turn Belle Isle into is an Americanized version of the British tax havens of Jersey, Guernsey or the Isle of Man which are known to be havens for tax cheats and money launderers.  Below is taken directly from the website they will be unveiling on January 21st:

What are the main principles of the Belle Isle society?

There are three:

1)      Government is limited in its scope and provides only services required for the benefit of all citizens.  This is the fundamental enabler of low taxation, itself a key factor in competitiveness.  Competitiveness in turn drives the economy, providing both job and wage growth.  Also, the government is highly transparent and overseen by an active “Anti-Corruption Group”, which employs strict measures to prevent, as opposed to catch after the fact, corruption.  The government operates at or below 10% of GDP, by constitutional dictate.  The social safety net is operated by charities, which are highly encouraged and supported by the government.   

2)       Belle Isle has exceptional aesthetics.  It is a walking community without motor vehicles, except service vehicles in the middle of the night.  A monorail provides the primary transportation, both around the island and to the Transportation Center located on the Detroit side of the river.  The buildings conform to high architectural standards, overseen by a talented planning director, who is advised by the best architects and planners from around the world.

3)      One of the core values is respect for all its citizens, no matter their station in life.  Belle Isle doesn’t encourage anything which might cause divisiveness or envy among its citizens, by segmenting people into groups.  The culture is one of bringing people together, not dividing them.  Also, a command of English is required to be an immigrant, as a common language fosters common understandings.  Probably the most important personal value we like to see is that of “Self-Reliance.”  It is so important to individual freedom and a sense of worth, and is the key to limited government (55% of U. S. government spending is for entitlements).  It was one of the key principles on which America was based and has gradually been forgotten over the years.

What is the tax system of Belle Isle?

Taxes have to conform to three basic principles.  They need to be transparent, never levied on what is encouraged, and the costs of collection low.  Importantly, there are no income taxes on individuals or companies, and no taxes on interest, dividends, capital gains or estates. 

There are three sources of revenue.  The first is user fees, which apply primarily to the monorail.  A 10% sales tax provides a second source.  Importantly, sales taxes encourage thrift and are collected outside the cost structure of the products. Real estate taxes provide the third, but the system is radically different than that employed in the U.S.  Only the raw land value is taxed, not what the owner builds on it.  This follows the principle of government only receiving compensation for what it provides.  Government didn’t pay to construct buildings on the owner’s land, nor does it bear the risk of loss.  We encourage development of property, not discourage it.

The goal, which is very achievable, is to have total tax expense limited to 10% of GDP of Belle Isle, compared to the 40% of GDP government expense in America.

Do Belle Isle citizens pay taxes to the United States?

Yes.  As a Commonwealth of the United States, Belle Isle relies upon the United States for its defense.  Belle Isle pays its share of the U.S. defense budget, based on its population.  It amounts to about $2,000 per person per year.

Will rich Americans escape paying U.S. income taxes by becoming a Belle Isle citizen?

Belle Isle will need to establish a taxation agreement with the U.S. and other countries of the world.  Most international tax agreements provide for taxes to be levied on businesses and individuals based on where they are located.  Thus a Belle Isle citizen who owns a manufacturing plant in the U.S. will likely have to pay income taxes on the profits generated by that plant.  But a citizen who lives on Belle Isle who operates an investment fund with world-wide customers will pay no income taxes.

Won’t the U.S. lose a lot of tax revenue?

It will probably gain revenue.  The influx of foreign capital and jobs created in the U.S. will be huge.  Entrepreneurs from around the world will locate on Belle Isle and headquarter there, but often have their plant operations in the U.S. because the island is so small. Businesses producing products in the U.S. will still be taxed at U.S. corporate tax rates.  One of the key goals of a nation’s government is to facilitate the importation of capital as a key to job growth.  Limited government does this well, whereas large governments like that in the U.S. are a deterrent to growth of the private sector, the key to job growth.  When counting up the many ways America will benefit from this great social and economic miracle, don’t forget the multitude of new taxpayers created as Detroit trades destitution and the dole for dignity and jobs.

What are expected to be the primary industries of Belle Isle?

The primary industries are expected to be finance, insurance and investments.  As land is very limited, no large plants will be built on Belle Isle.  However, it is highly likely plants will be built across the Detroit River in Detroit, with the engineering and management functions on Belle Isle.  Companies from all over the world will locate on Belle Isle, bringing massive amounts of capital and GDP to the area.  Detroit, the State of Michigan and the U.S. will benefit from this influx of capital and ongoing GDP growth.

How will someone become a citizen of Belle Isle?

There will be an application process which will be reviewed by a citizenship board.  Applicants will have to post a citizenship fee, which will probably be in the $300,000 range, plus have a working command of English.  The citizenship fees will repay the investors who funded the purchase of the island from the City of Detroit, plus built the infrastructure such as sewer, water, paving, electric and gas utilities and the monorail.  The monies remaining will be used to back the currency.

So in other words, what they want to do is create a exclusive country club for select Plutocrats who made their money from corporate welfare they received from taxpayers and who now don’t want to pay taxes on the money they made from those very same taxpayers.  Oh, and let’s not forget they also want help foreign billionaires launder money.

Comments

  1. Robert Zraick says:

    Obviously the author is rather vindictive about Ayn Rand. Not all share your views and your reporting is rather biased. Her works will be long remembered long after you blog is forgotten forever.

    • Steve Dibert says:

      Robert,

      Some people like you can’t admit Ayn Rand was a hypocrite who profited from gullible chumps like you and then squandered her wealth on booze and cigarettes only to go to the government asking for welfare to pay for the cancer that was brought on by her own reckless behavior.

      Every person pushing this Belle Isle Commonwealth idea has been a recipient, like Ayn Rand, of some type of handout from the government they attest to despise. Libertarians cling to Ayn Rand’s fiction like Liberals cling to Aaron Sorkin’s fiction. You all believe that your particular writer has created a utopia where you want to live in the same the way Harry Potter fans believe in wizards and magic broom sticks.

      Is my piece biased? Yes it is. That’s why it’s an opinion piece. One could say that your response lacks objectivity and is biased as well. If you don’t want to open your mind to the fact that others have different opinions, then by all means go hang out at a Paul Ryan or Ron Paul rally instead. I’m sure you will find plenty of gullible Ayn Rand devotees to have endless debates about John Galt being more of a badass than Howard Roark from The Fountainhead.

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