There are many Canadians supporting the Florida economy, as well as that of Arizona and other USA winter retreats !!!
What does this mean for Florida land development and Florida real estate investment?
Eight Billion Reasons Feds Like FATCA In a November 2011 Reuters piece covering FATCA as a forecasted financial tsunami, one U.S. legal expert opined during an Italian tax conference that FATCA may cost the big multinational banks $100,000,000 EACH Tax evasion law could cost big banks $100 million | Reuters.
Compare this against the predicted $8+ billion in tax revenue that FATCA is expected to bring into the coffers of the U.S. Department of Treasury, and we begin to see where the battleground really lies. The old adage of “show me the money” is often wise advice.
It’s going to be very hard to get FATCA repealed when it’s promising so much revenue to a federal government dealing with a severe economic crisis. Additionally, Congress passed this law as a means of catching alleged tax evaders (whether or not it will actually hurt or halt tax evasion is another issue), so FATCA brings with it a righteous rationale that also weakens the likelihood of repeal.
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Earlier this month, Jim Flaherty (Canada’s Finance Minister) spoke to reporters Ottawa awaits U.S. accommodation on tax law | Business | Reuters to say that the Treasury Department was working with his office on ways to make FATCA easier on Canada’s banks. Flaherty’s explanation? Canada is not a place where U.S. tax evaders are known to find safe harbor. Since FATCA is aimed at collected hidden tax dollars overseas, Canada is arguing that its banks shouldn’t be forced into spending a lot of money to institute compliance (aka collection) procedures that don’t jive with FATCA in the first place.
IRS Commissioner Discusses FATCA Impact Before International Tax Institute
On December 15, 2011, the Commissioner of the IRS gave a speech at the IRS/George Washington University 24th Annual Institute on Current Issues in International Taxation, (You can read the full text of his speech online here Commissioner Douglas H. Shulman Speaks at the IRS/George Washington University 24th Annual Institute .) It doesn’t sound like the IRS thinks that FATCA’s days are numbered – Commissioner Shulman definitely sounds like he’s with those that think FATCA is a done deal.
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What does this mean for Florida land development and Florida real estate investment?
Well, particularly here in Miami, we are a cosmopolitan culture with longstanding ties – both busness and personal – to countries all over the world. Florida’s economy is in serious trouble, and lots of people are working hard to build upon our global ties to bring foreign investment into the Sunshine State.
We need to be building that cross-polination between Florida and Brazil, Mexico, Israel, Canada, and beyond. Asking that these folk come here to invest and build while at the same time, asking their banks to spend millions in an effort for the United States to collect tax dollars — well, in its simplest terms, it’s not very hospitable, is it?
Financially, it’s much more complex than that, of course. But that is for another post on another day. “
Good points Peter. And I am sure that you saw the WSJ article that is talking about the DATCA (US Domestic version of FATCA) that will impact Canadian’s deposits in Florida Banks. And the plot thickens…
Banks Sweat as Tax Net Tightens
New Rules Target U.S. Citizens With Accounts Abroad and Noncitizens With Deposits at U.S. Banks
http://on.wsj.com/rVmODv
“This is just a bad, bad idea,” says Alex Sanchez, president and chief executive of the Florida Bankers Association. He estimates that Florida banks hold about $80 billion of deposits from non-U.S. residents, representing about 20% of the state’s deposits. An IRS spokesman declined to comment.”
FATCA will turn out badly for the United States. Assume that it brings in 8 billion in revenue (who knows where that figure comes from – I suspect the figure is just “made up”). It will cost the United States far more than it brings in. Everybody except Congress seems to understand the concept of opportunity cost. (But then again, Congress didn’t know that it had enacted FATCA, because they don’t read the legislation.)
FATCA will cost the U.S. lots of opportunity to make money. How? Let’s begin with the obvious. FATCA affects two groups – foreign financial institutions and U.S. citizens abroad.
FATCA is very costly to foreign banks. They will find ways to avoid the U.S. capital markets.Ultimately the U.S. dollar will cease to be the world’s reserve currency. The flow of investment into the U.S. will be eroded.
U.S. citizens abroad – 6 million U.S. citizens bad mouthing the U.S. What is he message? The U.S.A. – even it’s own citizens hate the country.
Repeal citizenship-based taxation. Join the world!
Read more here:
http://renounceuscitizenship.wordpress.com/2011/12/27/stop-citizenship-based-taxation-repeal-fatca/
Hi Just Me: please note that this was Calgary411 who put up this post. As much as I’d like to take credit for everything, this is a group blog! 🙂
Cheers, Peter
Thanks for pointing out who posted that. I will have to learn not to skim and assume. You would think by this time of life, I would have learned those lessons, but… NOOO! Good job calgary411
This post was written and published by a Miami attorney who publishes a blog that regularly covers FATCA among other issues impacting South Florida — Rosa Eckstein Schechter, Esq.at Florida Commercial News.
While you have given a reference to that post’s title at the top, cutting and pasting her work here seems wrong not only from a copyright infringement perspective unless you got her okay in advance, but also because you’re not allowing folk the opportunity to comment directly to the Florida attorney who’s provided this info and more.
By blogging on FATCA issues on her blog, the Florida attorney is opening up dialogue on this issue. Seems like a good opportunity that is being missed here by the way this post appears here.
Alternatively, why not ask Rosa Schechter to guest post here?
Thanks. I’ve sent a note to Rosa Schechter and my apologies for posting her information on this site. I copied what I posted and asked if she would like to guest post.
Regards.
Thanks, Calgary411 … it will be interesting to have a guest post on the subject of FATCA. Appreciated!
On my personal blog, I don’t as a rule copy other people’s posts without permission. I have found, however, that my material will often end up in many different places. Consider that my recent Santa Claus post ended upon Daniel Mitchell’s blog and at Townhall.com. I was delighted, though I wish that my name had been included as the author. Generally speaking, if your blog gets reposted, even without your prior permission, it enhances your reputation and it is a good thing. I doubt that Ms. Schechter will mind–it calls greater attention to her concerns and provides an expanded readership–and it provides free advertising for her law practice. Furthermore, as a result of Calgary’s sharing this post here, I went and made a comment at Ms. Schechter’s blog (though it is still unapproved). But if she does object, we would be more than happy to remove it.
Cheers, Peter W. Dunn
Calgary, let me know her response. If she wants to guest post, I can send her an invitation.
https://twitter.com/#!/renounceus/status/152773093167869954