This is the first piece of good news we have heard from United States of Arrogance. Rand Paul has introduced a bill to repeal FATCA (or at least the parts of it which affect most of us.)
Rand Paul is a Republican tax-fighting Senator from Kentucky. He seems to be somewhat of a maverick. He is one of the few members of Congress who has been listening, who gets it and who cares. (There I go again praising the virtues of a Republican. The world has definitely gone topsy-turvy!)
In a letter to Senate colleagues, he wrote:
“I intend to offer a bill to repeal certain provisions of the Foreign Account Tax Compliance Act, or FATCA (P.L. 111-147). The intent of this law was to prevent tax evasion by increasing access to overseas bank accounts held by U.S. citizens. However, any law enforcement benefits have been vastly outweighed by the deleterious effects of FATCA on economic growth and the financial privacy of Americans.
“FATCA requires the financial institutions of foreign countries to register directly with the IRS, and to provide financial information on the accounts of U.S. citizens—regardless of whether or not these U.S. citizens are suspected of tax evasion,” he added. “A failure to comply with these requirements subjects that foreign financial institution (FFI) to a 30% withholding of U.S.-derived revenues. This has had the practical effect of forcing FFIs to relinquish any association with American customers, and to avoid direct investment in the United States. It goes without saying that overseas investment in the U.S. is an important engine of our economic growth and prosperity. FATCA endangers an estimated $25 trillion in foreign capital currently invested in the U.S.
“Perhaps even more troubling, the implementation of FATCA has allowed the Treasury Department to make independent decisions with respect to the sovereignty of foreign nations and the privacy of United States citizens. In order to implement this law, Treasury has initiated intergovernmental agreements (IGAs), citing the intent to engage in reciprocal information sharing with other nations,” said Paul. “The Treasury Department, without the consent and authority of Congress, will force U.S. financial institutions to provide the bank account information of private customers to foreign nations. Such a requirement not only diminishes U.S. privacy protections, but also imposes billions of dollars in compliance costs here at home, which will be passed onto customers and the American public.
“My bill is drafted with the intention of removing only FATCA provisions that undermine Americans’ constitutional privacy protections and add burdensome regulations with a negative economic impact on the United States,” Paul’s letter continued. “Other provisions enacted at the same time, such as those pertaining to clarification of foreign trusts and treatment of dividends that do not have those negative impacts, have been left alone. The intent of this bill is not to disrupt legitimate tax enforcement, only to repeal counterproductive and constitutionally suspect mandates.”
RepealFatca.com calls this a major game changer. They also say a companion bill is expected to be introduced in the House of Representatives.
Will it succeed? We can only hope. You Go Rand Paul!
Thank you. Thank you. Thank you!
Re the Reuters piece today, I sent Mr. Paul another message (after the first one sent right after this news, congratulating him for his stand). I have not had an acknowledgement of my message, although some have. I sent a further message today as I have some questions:
Dear Mr. Paul,
Re: FATCA
I am a Canadian citizen who has recently renounced US citizenship, compliant with US tax returns and reporting since 2005 when I realized it was not true what had been told to me when I became a Canadian citizen in 1975. I applaud you standing up for US Citizens Abroad who are collateral damage in looking for the real tax evaders — and being labelled tax evaders and traitors in the process. I thus want nothing further to do with the US unless it is to be with a US relative loved one in their time of medical need or at the end of their life.
As stated in the Reuters piece, “Senator Paul offers bill to weaken U.S. anti-tax evasion law” (http://uk.reuters.com/article/2013/05/08/usa-tax-fatca-idUKL2N0DP00X20130508):
“In a letter to other senators, Paul said his bill would repeal only provisions that undermine U.S. privacy protections.
“The intent of this bill is not to disrupt legitimate tax enforcement,” said Paul, who is popular among conservative Tea Party Republicans and libertarians.”
and your letter to colleagues:
“My bill is drafted we the intent of removing only FATCA provisions that undermine American’s constitutional privacy privacy protections and add burdensome regulations with a negative economic impact on the United States. Other provisions enacted at the time, such as those pertaining to clarification of foreign trusts and treatments of dividends that do not have those negative impacts have been left alone. The intent of this bill is not to disrupt legitimate tax enforcement, only to repeal counterproductive and constitutionally suspect mandates.”
It is not all black and white, as many will read it.
Can you explain so we all know exactly what is proposed to be taken out and what exactly you propose to remain in FATCA.
I would like more information on the meaning of your “clarification of foreign trusts and treatments of dividends that do not have negative impacts” — negative impacts to the US, not necessarily meaning negative impacts to US Persons abroad. In Canada, those foreign trusts include registered accounts: Tax Free Savings Account (TFSA), Registered Education Savings Plan (RESP), Registered Disability Savings Plan (RDSP) — and of course the Registered Retirement Savings Plan (RRSP) and Registered Retirement Income Fund (RRIF) if IRS Form 8891 (U.S. Information Return for Beneficiaries of Certain Canadian Registered Retirement Plans) is not correctly and timely filed each year.
Good message Calgary411.
The Retuters story says his bill has little chance of being passed, but it’s a beginning. At least someone seems to finally be paying attention.
and, Blaze, some higher-level awareness of the FATCA consequences for US Persons Abroad. It will be interesting!!
Here’s another article from Wall Street Journal.
http://online.wsj.com/article/PR-CO-20130508-914454.html?mod=googlenews_wsj
You have to love some of these comments:
“Successful tax systems attract capital. Unsuccessful tax systems attempt to force other countries to become their tax collectors. That’s what FACTA is, and it should be repealed.” — Grover Norquist, Americans for Tax Reform.
“Senator Paul’s bold stand against FATCA has come at an opportune time. The world is fed up with U.S. fiscal imperialism. Rather than allow regulators to continue pursuing an unconstitutional ‘intergovernmental agreement’ strategy, it is time for lawmakers to accept defeat and abolish this fatally flawed law.” — Andrew Quinlan, Center for Freedom and Prosperity.
“The last thing America should be exporting is its complex tax laws. Senator Paul deserves a round of applause from taxpayers in our nation and around the world for recognizing the dangers FATCA poses to our economy and our civil liberties.” — Pete Sepp, National Taxpayers Union.
Reuters is a mouthpiece for the current powers that be. I wouldn’t expect them to say much in support for the bill.
Rand Paul’s bill is big news. I am surprised ACA hasn’t said anything about it yet.
Senator Rand Paul’s press release shows he gets everything which is wrong about FATCA.
http://www.paul.senate.gov/?p=press_release&id=792
“Tax evasion is a problem that should be addressed, but not in such an egregious way. FATCA violates important privacy protections, disregards the sovereign laws of other nations and will cost the U.S. economy hundreds of billions of dollars in compliance costs. FATCA should be repealed, and Congress should consider less onerous means of enforcing tax laws.”
The Hill: “Rand Paul introduces bill to roll back parts of tax evasion law”
http://thehill.com/blogs/on-the-money/domestic-taxes/298529-rand-paul-introduces-bill-to-roll-back-parts-of-tax-evasion-law
This article is in need of some comments from ex-pats.
This comment below from “danomano” is an indication of the current level of stupid comments going up for this article:
“Bottom line: Rand Paul supports tax evasion. He can mouth on about principles, but the principles he support are that he wants unlimited campaign contributions by rich people, and rich people who can evade taxes in foreign shelters have the money to give to him.”
Yippee yahoo. maybe someone who finally gets it. I hope Flaherty sends him a bouquet – or a good case of scotch!
And yes, maybe it doesn’t have much hope of going through, but at least someone is finally paying attention. Let’s hope this is only the FIRST of many to come!
Nigel Green thinks Rand Paul’s thinks Rand Paul’s “actions should be seen as nothing short of heroic.”
http://www.nigel-green.com/2013/05/09/senator-rand-paul-joins-fight-to-have-fatca-repealed/
He also says there has been some heavyweight support for the bill in the form of National Credit Union Association.
I really like these words from Nigel Green:
“There appears to be something of a welcome sea change of opinion taking place in Washington on this issue. As such, I hope foreign governments who are yet to sign up to FATCA through an intergovernmental agreement (IGA) will now feel more emboldened to reject the fiscal imperialism that the US Treasury is trying to impose worldwide.”
We have a long way to go, but let’s make that sea change into a tsunami!
I suggest trying to interest National Post columnist Conrad Black in this issue. As a columnist he has wide latitude in picking subjects, and the luxury of in-depth commentary. I have a gut feel he would be interested and will be sending him a background letter with some quotes and links.
His contact: cbletters@gmail.com
I don’t know if this is on his radar. Black is possibly a “US person” under FATCA, having lived lived, worked and been incarcerated there for years. And he’s interested in US issues. He covers the “boomer” demographic beat as well – so FATCA impact on retired Canadians is another angle as well. The involvement of quotable high profile people – like Peter Hogg and now Rand Paul – also makes news.
Another high profile person I would love to see take this on is Kevin O’Leary of Dragon’s Den and the Lang-O’Leary exchange on CBC.
I’m sure he’s affected by this. He likely has a green card or some other means of participating on Shark Tank in US. If not, then surely he is affected as a member of the board of Genstar Capital.
He turned a $10,000 loan into a $4.2 billion business.
I don’t like either Conrad Black or Kevin O’Leary. But, I don’t usually like former members of Mike Harris cabinet or Republican libertarians either. But, right now, I’m liking Rand Paul and Jim Flaherty for standing up to FATCA (or at least in Flaherty’s case, not caving in to it yet).
http://en.wikipedia.org/wiki/Kevin_O%27Leary
Blaze,
My understanding is Kevin O’Leary did have a green card but turned it in sometime in the last few years in the context of what has been going on.
Oh this is very good news. Even if it fails it is going to reframe the debate. “Reciprocity” is a very scary word to homeland Americans who thus far don’t see how FATCA impacts THEM.
Norqust’s comment is dead on. Citizenship-based taxation is unworkable – too hard to track people down in 192+ countries much less make them pay. Hell, the US government doesn’t even know how many people they consider taxpayers living abroad there are. Even something as simple as trying to include them in the census was deemed “too hard.” So they delegated it to foreign entities which, if you think about it is a sign of weakness, not strength. When foreign governments looked like they might decline the honor of being tax collectors for the US, Treasury went to the negotiating table. What came out of that process was a clear request for reciprocity from foreign governments. “Give us something for our trouble,” they said, which Treasury more or less did with vague promises. And now the cat is among the pigeons because neither the American people nor the US government have any intention whatsoever of giving those foreign governments what they want. It would be too onerous for US banks and it would cost a pretty penny all around. I’m not sure yet if reciprocity is a FATCA-killer or not. What I do think is that FATCA could be watered down to be practically meaningless. It might become what citizenship-based taxation was for many years – a toothless law that pretty much everyone ignored unless there was enough money involved to make it interesting.
What a damn good show and I am finding it very entertaining. 🙂
And we are having something of a party right now over at Mother Jones. They published a piece that is very critical of Paul’s efforts and not only contains erroneous information but is slanted toward how “great” FATCA is. Here it is:
http://www.motherjones.com/mojo/2013/05/rand-paul-fatca-repeal-offshore-tax-evasion
After reading some of the comments I lost my temper. 🙂 Happily there were many other commenters like Just Me and Swisstechie who responded patiently and politely to all.
Enjoy. 🙂
Round 2 for sending comments to the Joint House Ways and Means and Senate Finance Committees:
http://americansabroad.org/issues/taxation/another-avenue-americans-overseas-be-heard/
https://taxreform.gov/
Lets give these guys another ear full!
I’m not an American citizen, so I won’t be commenting, however, for those out there who still are, it’s a good opportunity to be heard. Max Baucus, one of the senators behind the website, is scheduled to retire in 2014, so perhaps he actually WILL listen – what does he have to lose?
Well, doesn’t this show little backbone our banks and the CBA have,..
http://www.stepjournal.org/news/news/main_story/american_business_rebels_over.aspx
“The banking industry associations of two US states are suing the US government for billions of dollars, complaining of new Internal Revenue Service regulations forcing them to report account records to foreign governments.
The suits were filed by the Texas Bankers Association and Florida Bankers Association against the Treasury Department. The member banks fear they will lose billions in business due to the regulations, as foreign clients who risk having their account records disclosed will move their funds elsewhere.”
@Outraged: Wouldn’t it be great if banks in Canada and around the world would come together and do what banks in two US states are doing?
Someone has sent me this article from Huffington Post cautioning us about seeing Rand Paul as our savior. That person has chosen not to post here, but I think it’s worth reading to see what kind of issues Rand Paul takes on.
http://www.huffingtonpost.com/2013/05/11/rand-paul-obama-gun-control_n_3260890.html
Rand Paul claims by trying to promote better gun control, Obama is “helping anti-Ameican globalists plot against our Constitution” He also claims Obama used the families of the Sandy Hook victims as political props.
Again, I usually detest much of what Rand Paul stands for. As someone whose stepbrother was killed by another boy playing with his father’s gun over 50 years ago, I especially hate Rand Paul’s position on gun control.
Yet, Rand Paul seems to be the only one who is prepared to take a stand on what FATCA is doing to honest people trying to live honest lives.
It’s a conundrum for sure.
Here’s more on Rand Paul’s efforts. Thanks Just Me for tweeting this.
https://now.mmedia.me/lb/en/commentaryanalysis/fatca-finally-comes-home
The article says: Once FATCA was an American concern it became more vulnerable, even if the conventional wisdom is that that repeal will fail because Congress is too divided.
It continues with information about some who are and are not on side.
The concluding statement in the article says it all: He may succeed in repealing the legislation, or he may not, but Americans abroad finally see that someone is speaking on their behalf. What a shame that their government has failed to do so
Well, here I go again, quoting someone from the Patriots, a tea party group. Here’s her description of dealing with IRS:
“It was pretty much a proctology exam through your earlobe.”
http://www.washingtonpost.com/politics/groups-who-sought-tax-exempt-status-say-irs-dealings-were-a-nightmare/2013/05/15/35405920-bcd9-11e2-9b09-1638acc3942e_story.html
Republican National Convention is poised to join Rand Paul’s fight to repeal FATCA
http://www.washingtontimes.com/news/2014/jan/15/rnc-join-rand-pauls-fight-protect-privacy-american/