Bio: Founder of
Citizens for
Equal Trade

Citizens For Equal Trade (CET) [Ref. 1] is requesting legal help to present a Supreme Court case that questions the legality of the U.S. Trade Deficit. Our petition [Ref. 2] requests the Supreme Court rule on the violations of Constitutional and U.S. Law of America’s Trade Deficit. We claim that free trade policy requires the serious misuse of public tax money.

The full petition and signatures may be found in Ref. 2. We claim two violations of constitutional law and one violation of common law. We claim only equal (balanced) trade is constitutional.

If you have legal means, please contact us through our website Citizens For Equal Trade. We offer the opportunity to try this landmark case outlined here.

Why now is this happening?

Now more than ever before there is ample data to show serious tax losses due to years of trade deficits. These substantial tax losses add to the national debt and thus create the equivalent of a “Reverse Tariff” [Ref. 3]. Government data now shows an 84% correlation between the trade deficit and the national debt due to high yearly tax losses [Ref. 4]. CET’s model indicates that between 6.5% and 16.3% of the national debt is caused by trade deficit tax losses [Ref. 4]. We claim this is illegal use of public tax money used to help subsidize U.S. trade deficits.

Why are trade deficit tax losses illegal?

Ordinary citizens end up paying for Trade Deficit tax losses that add to the national debt so they end up subsidizing trade. Therefore U.S. citizens are forced to pay for trade deficit products and services that they did not purchase. This is illegal use of tax money as it equates to stealing, a common law violation. As well, this leads to technical Constitutional Violations [Ref. 2, 5] as described herein.

What is the origin of trade deficit tax losses?

Tax losses result mainly from trade deficit related job losses, outsourcing, and offshoring of U.S. corporations and WTO trade violations. Furthermore, it is well known that foreign owned companies in the U.S. pay far less taxes [Ref. 3]. In addition tax losses result from Trade Deficit imbalance allowing foreigners to buy up U.S. businesses. For example, foreigners now own $7.85 trillion [Ref. 4] more of us that we do of them. This trade deficit has occurred because of the illegal use of public tax funds.

What is the evidence now available on trade deficit tax losses?

Evidence now includes:

1. A statistically significant 84% correlation study between the trade deficit and the U.S. national debt indicating between 6.5% and 16.3% of the national debt is caused by trade deficit tax losses [Ref. 4].
2. A 2005 Grant Thornton Report showing that foreigners own over 15% of all U.S businesses while proportionately stifling U.S. job growth in hiring only 3.6% U.S. workers [Ref. 7] increasing tax losses yearly [Ref. 3, 4].
3. Trade deficit has cost over 3.6 million jobs losses [Ref. 9].
4. Promotes uncontrollable Economic Global Greed violating WTO agreement costing U.S. business failures and significant job losses [Ref. 9] cheating U.S. citizens out of financial opportunity and forcing financial failures.

Citizens for Equal Trade Legal Claims

Definition: Hereafter, the term “Reverse Tariff Debt” is used to refer to that portion of the national debt created from trade deficit tax losses.

Common Law Violation Claim

We claim a violation of common law by illegally allowing a free trade policy that requires subsidizing U.S. trade deficits with public tax money. Under common law this amounts to stealing money from U.S. citizens who are forced to pay the Reverse Tariff Debt [Ref. 3]. Why for example, should I have to partly pay for someone else’s purchase? Imbalance trade also promotes foreign cheating in the form of currency manipulation, product counterfeiting, excessive offshoring and outsourcing etc. This difficult to control cheating is financially rewarded due to an American policy allowing for illegal use of public funds enabling large yearly trade deficits. As such, ordinary citizens end up being cheated financially without retribution while this criminal behavior is rewarded.

Claim of two violations of Constitutional Law

Violation No. 1: We have identified and verified with a constitutional lawyer [Ref. 10], a violation on tax of interstate commerce. This constitutional law states (Article 1, Section 9, Clause 5): “No Tax or Duty shall be laid on articles exported from any State.” We claim, U.S. taxpayers end up paying a “Reverse Tariff” [Ref. 3] duty on moving imported trade deficit goods from state to state. An illegal use of public funds.

Violation No. 2: We claim a constitutional violation related to Article IV, Section IV of the U.S. Constitution, where the federal government has a required duty and obligation to remove foreign invaders from U.S. soil. We interpret that the trade deficit allows for a foreign financial invasion. Foreigners must reinvest trade deficit profits in the U.S. due to the WTO currency agreement. Such reinvestments have led to excessive foreign ownership of U.S. business. In the last study on this subject we are aware of, a 2005 Grant Thornton report [Ref. 6] found “total assets at foreign-owned companies increased 15 percent to $9.2 trillion in 2005 from $8 trillion a year earlier and was more than three times the 1996 total of $3 trillion. Foreign-owned assets totaled just $37 billion in 1971.” This ownership has also only led to a deplorable 3.5 percent U.S. job creation [Ref. 8]. Right now foreigners own $7.85 trillion more of us than we do of them made possible mostly by the trade deficit.

The applicability of the Political Question Doctrine

It is possible that when constitutional law is violated that the courts may choose not to rule citing a “Political Question Doctrine,” if the court feels “it is prudent not to interfere.” However, there are key reasons why passing on a ruling is not prudent. The first key reason is that legislatures and economists have had ample time to act on reducing the trade deficit. They have shown lack of knowledge as to the impact on the trade deficit on tax losses, and an inability to legislate this economic problem. What is worse, we currently have a partisan congress who has displayed stalemate behavior on meaningful economic reform. Therefore, only a Supreme Court ruling is able to address the trade deficit legalities. Furthermore, mathematically we show there is a solution, that of equal trade which does not have these tax consequence.

Why is Equal Trade Constitutional

One interesting thing observed in our correlation study [Ref. 4] was that if the trade deficit went to zero, the tax consequences (i.e. Reverse Tariff) would also diminish. This indicates that equal (i.e., balanced trade) would in fact be an excellent resolution to the trade deficit tax loss problem and is consistent with WTO policy. Historically, there was a proposal called the Balance of Trade Restoration Act of 2006 originally suggested by Warren Buffet. While this has been ignored by Congress, there was a recent failed effort to push a modified version of this proposal [Ref. 11].

Summary

Citizen’s for equal trade feels that that current U.S. trade policy violates constitution and common law due to extreme tax losses. We feel that members of congress and today’s economist are mostly unaware of this issue, and if aware of it, will ignore fixing free trade policy unless the Supreme court rules on a policy that requires illegal use of public money.

References:

1. www.CitizensForEqualTrade.org
2. Petition, www.thepetitionsite.com/7/Citizens-For-Equal-Trade
3. Reverse Tariff – Economic Crisis Due to Free Trade’s Flaw, Dr. Alec Feinberg, August 2, 2010, http://economyincrisis.org/content/reverse-tariff-economic-crisis-due-free-trades-flaw
4. Trade Deficit’s Reverse Tariff Increases the U.S. National Debt – an 84% Correlation!, Dr. Alec Feinberg, August 19, 2010. http://economyincrisis.org/content/trade-deficit%E2%80%99s-reverse-tariff-increased-us-national-debt-%E2%80%93-84-correlation-0
5. Trade Deficit is Illegal, Unconstitutional, Unethical, and Violates the WTO (Sept. 9, 2010) http://www.economyincrisis.org/content/trade-deficit-illegal-unconstitutional-unethical-and-violates-wto
6. 2005 Grant Thornton Report, www.reuters.com/article/idUSN2744743020080827
7. 2009, Foreign-owned companies in the United States have a work force of more than 5.3 million, or some 3.5% of all workers.”
8. www.nytimes.com/2009/10/18/business/18excerpt.html
9. Biggest Threat to America’s Future –The U.S. Free Trade Deficit, Dr. Alec Feinberg, June 14, 2010, http://economyincrisis.org/content/biggest-threat-americas-future-us-fre… -0
10. Private communications with Wesley Oliver, Professor of Constitutional Law, Widener University, March 2010
11. U.S. Trade Deficits Rip-Off America and Its Workers, Kenneth Davis, July 27, 2010 http://www.economyincrisis.org/content/us-trade-deficits-rip-america-and…

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