As “US persons” abroad there is one thing that we all have in common: we are all vulnerable to the US government and subject to the whims of politicians and a tax code from a distant foreign country, who do not represent us as overseas citizens yet still subject us to their laws as if we lived there. Many of our own countries are busy lining up to sell us out (“us” being dual citizens and “US person” permanent residents) as quickly as they can to the US government.
This is abhorrent and wrong – What would you do if you were a world leader with the power to challenge FATCA? How would you right this grave injustice? What follows is done partly in jest, partly as a seriously intellectual exercise and partly as a rant to express my disappointment with our political “leaders” worldwide. Suspend your belief for awhile:
I have just anointed myself the next European Commissar, a role with undefined, absolute power over all EU Member states. I am appalled by FATCA and will take all necessary steps to resist it, since I am a single issue politician and my only purpose in life is to punish the US Government, Congress and the IRS. This is my agenda, much in the same way that several US Congressmen seem to only be interested in bleeding all “US persons” abroad dry. Here is my agenda, in two stages:
- I would immediately denounce FATCA clearly and unequivocally as an extraterritorial tax grab, gross invasion of privacy and sovereignty and the most arrogant law ever conceived in the history of the United States’ existence. I will give the US Congress 2 weeks time to repeal FATCA or face “serious consequences” and tell them to expect diplomatic relations to be downgraded if it is not repealed. Details of the “serious consequences” will remain vague, much in the same way that the FATCA draft provisions never seem to be finalised and will be in a state of flux to enhance confusion and increase US lobbying costs.
- The US Congress, even if it wanted to comply, would be unable to pass legislation this quickly due to its partisan politics. The two week deadline was meant to be unrealistic as a statement on how FATCA itself is unrealistic in expecting every FFI (Foreign Financial Institution) in the world to somehow comply with its draconian reporting requirements. I call the US Ambassador to the European Union for a dressing down and implement the next stages of my policy, which include the following (which I also dictate to him in person in crystal clear Brussels-style French, because the US Ambassador to the European Union knows French for sure):
- I will work with Switzerland to protect them from the US and, in unison, we will both immediately publicly release all US corporate and US politician-held accounts in Switzerland, Luxembourg and in every country in the EU, likely exposing several US Congressmen who are not complying with FATCA or even aware of what it is even though he or she likely signed the bill back in 2010. I will also work with Caribbean financial hubs towards the same purpose: immediate release of all accounts held by US corporations and politicians offshore. These acts will violate every country’s data protection law, but this is OK since FATCA has set the precedent that Data Protection Laws are inconvenient and meant to be ignored. The US preferred policy is to name, shame and terrify – We are just copying this fine import and applying it on America’s finest: its “public servants” 😛
- Next, I will create CCCPFASM* (Congress Critters Contravention & Presumptuous Foreign Account Seizure Mechanism), a sort of anti-FATCA. This will entail withholding 30% of all EU source or pass-through income through any EU bank intended for the IRS or “Congressional Persons”. This will be automatic for any US Congressman or the IRS and is unavoidable. It will also include special retroactive FBAR-style reporting rules dating back to 1960, entailing a 10,000 Euro penalty per un-filed year for each non-willful failure to file.
- Following the above, any US politician that decides to close an EU/EEA bank account will be automatically considered a “covered expatriate” and subject to a special exit tax, in return for services rendered. What those services were for a non-resident is not relevant, much as it does not matter whether or not somebody renouncing US citizenship and is subjected to an exit tax has actually used any US services in their lifetime.
- Further to this point, all US citizens based in the EU will benefit from immediate protection from the IRS. The IRS will be labeled a terrorist organisation and given 48 hours for all personnel (yes, all five of them!) to leave every EU member state before being subject to European Arrest Warrants on charges of harassment, disturbing the peace, extortion, spying for a foreign government, intention to commit fraud and money laundering. All EU-US taxation treaties will be declared null and void and the principal of the territoriality of taxation will be enshrined in the Lisbon Treaty (EU Constitution) with immediate effect and added to the European Declaration of Human Rights.
- Extradition to the US for any financial crime or US tax filing mistake will be immediately outlawed for both EU citizens and residents alike. US citizens who renounce citizenship and become stateless will receive an automatic guarantee that they will not be deported and will be able to apply for citizenship under an expedited procedure. Actually, all extradition to the US will be outlawed as we distrust their legal system and respect for the rule of law, both internationally and likely domestically.
- EU banks will be outlawed from reporting any information to the IRS or any other foreign government. For each instance that the US seizes 30% of income intended for an EU bank or resident, the EU will seize the equivalent amount from all monies going to public or corporate accounts in the US (again, individual citizens are exempt) to offset the balance and reimburse our own banks and companies. Because banks in the EU cannot report “US persons” accounts to the IRS, all “US persons” will be able to immediately access normal banking services again.
- FDI (Foreign Direct Investment) in the US will be outlawed from European sources and sanctions imposed on investing in US mutual funds, banks, and other financial assets until FATCA is repealed. This is in response to the US government’s fine criticism of the diaspora tax/extortion on Eritrean citizens overseas and call for the practice to be banned. We believe in investing only in democratic, representative societies where people have the right to come and go, so we will allow these sanctions until the US repeals US citizenship-based taxation.
- Lastly, as an aside, All US Ambassadors found to not be able to speak their host country’s language will be called in for a dressing down and immediately expelled. The Ambassador to the European Union will be expected to speak flawless French, German and the language of the country holding the rotating 6-month presidency (currently Denmark). They will also be barred from accessing US-sourced bank accounts and financial assets and will be invited to participate in special “US Government Persons” bank accounts at selected branchs, with selected rates and restrictions. All reporting costs attached to these accounts borne exclusively by the account holders.
*CCCPFASM: Dear US Government, We have selected this ridiculous ackronym to emphasise how much we love all of the silly US government ackronyms that you have produced recently, such as FATCA(T) and F(U)BAR. We chose this combination especially for you, US politician and viewer, due to your penchant for proclaiming anything foreign as being socialist or communist (CCCP: USSR) and the FASM bit for proclaiming anything else that you don’t seem to understand the meaning of but want to shout your disapproval at loudly anyways as being “fascist”. With our compliments 🙂
Remember, I am a single issue politician and not at all concerned with the ill-will generated by this, by the economic and financial side-effects or fallout, or by the charges of violating data protection laws or discrimination against a specific group (here “US Government Persons”). This is identical to how the US Congress has passed FATCA: no concern for other countries’ laws, sovereignty, financial security, data protection laws or even its own image overseas or financial security at home.
What would you add, change or modify? How would you battle FATCA, either as a realistic politician or as a single-issue autocrat as above? What tools are at the disposal of world leaders to effectively challenge this sort of legislation? Share your thoughts.