Privacy Isn’t All We’re Losing by Peggy Noonan in Wall Street Journal is one of the best I have read on the NSA issue. Much of what she says can be applied to FATCA, IRS, FBAR, OVDI, etc.
If—again, if—what Mr. Snowden says is substantially true, the surveillance state will in time encourage an air of subtle oppression, and encourage too a sense of paranoia that may in time—not next week, but in time, as the years unfold—loosen and disrupt the ties the people of America feel to our country.
Americans and former Americans living outside US have already experienced that. Many of us now feel only animosity.
Peggy Noonan wonders what can be done
So what’s needed? We must realize this is a crucial moment: We either go forward with these programs now or we stop, and think.
Unfortunately, US seems to have lost the ability to stop and think. We have been repeatedly told that the FATCA train has left the station. If it doesn’t derail, there will be more and more passengers jump off the citizenship train as soon as they can. Many of us who left the citizenship train years or decades ago are not about to get back on it–not even for visits.
How did we get here? You know.
The Coalition for Tax Competition Urges Support for FATCA Repeal
Twenty of USA’s “largest and most influential free-market, taxpayer protection and grassroots organizations, sent a letter to Senate members urging support for legislation introduced by Sen. Rand Paul to repeal the majority of the Foreign Account Tax Compliance Act (FATCA). The bill, S. 887, would repeal FATCA’s most costly and privacy-violating provisions.”
The Coalition for Tax Competition letter explains: “FATCA imposes on foreign financial institutions the obligation to provide financial information on the accounts of U.S. citizens without the need for evidence of tax evasion or other crimes. Institutions that fail to comply with costly reporting requirements are subject to a draconian 30% withholding of U.S.-derived income. In addition to the unjustified and unconstitutional invasion of the privacy of millions of Americans suspected of no wrongdoing, the practical consequences of the law include a growing refusal of many financial institutions to accept American clients or invest in the U.S. economy, the straining of relations between the U.S. and foreign nations whose fiscal sovereignty is being trampled, and an erosion of the separation of powers between the executive and legislative branches.”
The letter states the following reasons why Senator’s should sponsor S. 887 and repeal FATCA: 1) FATCA will not achieve its stated goal of significantly reducing tax evasion. 2) Unilateral and extralegal imposition of requirements on foreign institutions is straining relations with other nations. 3) Americans living and working overseas are being dropped by financial institutions seeking to avoid FATCA penalties, and face excessive penalties for minor mistakes. 4) The US economy will suffer a loss of foreign investment, resulting in fewer jobs and economic opportunities. 5) Promises by Treasury Department officials to provide reciprocal information sharing will add costly burdens on domestic institutions and their customers. Moreover, the intergovernmental agreement process they are using is not authorized by the law and represents a troubling end run around the Senate’s treaty review authority.
We haven’t derailed the FATCA train yet, but it sure helps having having these heavy hitting players on board!
When we were told in the past “It’s the law,” I drew a comparison of Rosa Parks.
Now, Douglas Goldstein, CFP (Certified Financial Planner) is doing the same. He asks: Would Rosa Parks File Her FATCA Forms or Move To The Back of the Bus?
Mr. Goldstein writes:
America’s greatness is her policy of equality to all and nondiscrimination. Rosa Parks is famous for her stance on refusing to give into racial discrimination. Who will be the Rosa Parks and stand up against America’s policy of geographic discrimination?
Mr. Goldstein, that is exactly what many of us are doing through Maple Sandbox, Issac Brock Society, American Citizens Abroad (ACA), Association of Americans Resident Overseas (AARO) and others.
He points out what many of us know:
America’s legal system works on the presumption of innocence… unless you happen to live abroad. FATCA assumes unless you file its forms (in addition to the FBAR required) you’re a tax evader.
He asks another question:
Doesn’t the government have better things to do than bully its citizens?
The answer to that is apparently not.
His final question is a repeat of the first:
Rosa Parks sat in the front of the bus to fight racial discrimination. What American will fight geographic discrimination and fiscal imperialism?
I do not consider myself American, although the United States of Arrogance wants to claim otherwise. I will continue to fight US fiscal imperialism in Canada through political, legal and other channels. I hope people around the world are prepared to do the same in their countries.
But, it may take someone who is a US citizen to actually take action in US courts before anything changes like it did for Rosa Parks.
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!
Do you want to Share Your US Tax Story?
Well, Democrats Abroad wants to hear from you. They are publishing a selection of stories each day and say they will use some in submission to the government.
My big question is, what has Democrats Abroad done so far? My sense is not much (neither, of course, have Republicans Abroad). If representatives of either would like to dispute that, they are free to come here and tell us differently. Don’t be surprised if we don’t agree with you.
You will either weep or scream as you read the stories.
Someone who has been a Canadian citizen for decades who got caught up in IRS snare with no one telling her she relinquished US citizenship and could get a CLN and be free of IRS.
A Belgian who had bank accounts closed. An Israeli terrorized by IRS over legal sale of stocks. A US citizen in Switzerland overwhelmed with costs and time to be compliant. A Thai businessman who finds IRS anti-business.
Then, there’s the Canadian citizen born in Canada with “US citizenship as it was passed to me, like a genetic disease, from my American father.” Legal fees to the “sharks” (aka tax lawyers) and penalties extorted through OVDI cost him six months salary. He considers himself “lucky” with a understanding wife, a mortgage to pay, and a young family to support. It seems none of those “sharks” told him CRA will not collect for IRS on Canadian citizens. He’s waiting to renounce US citizenship.
I personally am not going to tell Democrats Abroad my story as I don’t consider myself American (and I don’t trust them!) Have they told one Canadian citizen she relinquished three decades ago or told the other one born in Canada that CRA will protect him? I doubt it.
I am posting this, though, in case others want to share their experiences to try to make a difference.