I wanted to post a link to a recent article showing some favorible remarks from some members of European Parliament related to FATCA. It appears MEP Catherine Trautmann is of France is quite fond of FATCA and recently called for the EU and US to join together to make FATCA a new global standard. Trautmann appears to have no regard for the issues raised here.
Additional comments from EU Commissioner Algirdas Šemeta linked to below
http://www.egovmonitor.com/node/46880
While not related to the topic at hand here at Isaac Brock Society I note with great interest Commissioner Semata continued interest in a global financial transactions tax, a tax that the current Canadian Prime Minister Stephen Harper and Finance Minister Jim Flaherty have indicated will be implemented over their dead bodies in Canada. I linked to another blog comments on this very issue way back in 2010(Note the comments from a certain familiar commenter)
http://worthwhile.typepad.com/worthwhile_canadian_initi/2010/04/canada-and-the-bank-tax.html
If every country have their own FATCA how will things work in the world? Can you imagine all US banks dealings with all dual citizens and resident aliens in the USA and reporting their accounts to their countries of origin?…
Some Canadian firms appear to favour selling out US ‘person’ clients by joining the FATCA club – are you a client of one of their members?
See: http://www.complinet.com/global/news/news/article.html?ref=152318
Feb 14 2012 Emmanuel Olaoye
“FATCA Partners” agreement would limit compliance burdens, Canadian trade group says”……….
“The compliance burden for Canadian investment dealers would be limited if Canada joined the five European countries that are cooperating with the U.S. government on under the Foreign Account Tax Compliance Act, a Canadian investment industry trade group said.” ……..Ian Russell, president of the Investment Industry Association of Canada (IIAC), said the changes would be a “very positive step” for Canadian firms if Canada signed on as a FATCA partner. “It would resolve the problems of conflicts in privacy laws.”……………
Here is the IIAC site with list of members:
http://www.iiac.ca/welcome-to-iiac/about-us/iiac-members
Mark, I don’t know if the US is trying to do this on purpose. Sometimes we think something is a “grand plan”, but in reality, they are only managing a situation as it plays out in real time. But what we DO know for a fact is this:
1. The US does not like US citizens to live abroad, unless they are doing the US’s bidding.
2. The US views citizens as chattel for taxation and political purposes.
Going back to the original train of thought: They could have easily said “exception: US citizens living abroad continuously for 10 years or more”. But they didn’t do that.
I think that the US is unique in this situation. All governments of the world like to receive tax money, but none of them have this same hatred of citizens who live abroad. So as far as information sharing between countries goes, I bet we’ll see more. But branding people for life based on birth like the US has done, I doubt it.
FATCA, on principle, if designed to catch whales, is not the end of the world. It’s the by catch of minnows, which is the problem.
The easiest way I can see that would solve that problem would be to get rid of the citizenship part for the US. Maybe there are other fixes, but they would be more complicated. If FATCA only applied to “non-residents”, and covered large accounts, and if the different countries could come up with a plan that was workable in practice, it might even be a good idea.
As it is now, I think the practicalities of it will be so burdensome to administer, it will need to be adjusted or it will collapse under it’s own administrative complexities
@Canuckdoc: In their hunt for minnows and whales, US has appointed IRS as their shark. US won’t rest until all the sea life is dead in the water and in the belly of the shark.
@Blaze Possibly, but that would be a dumb move for the shark and the ocean, (let alone the minnows and whales and all the other sea life).
To continue the metaphor…at some point the ecosystem will start to fall apart and the shark will have to change it’s tactics, if possible, or it will die. And hopefully that will happen before the whole system collapses because then we are all in big trouble and FATCA will be the least of our problems!
@Canukdoc: I agree completely. Unfortunately, I don’t think we are dealing with anyone who cares about the environment, ecosystems or the atmosphere they are creating through their polluting policies and poisonous attitudes.
You’re also right, destroying all the sea life would be a dumb move. So far, I haven’t seen anything to convince me we’re dealing with anyone who is even slightly smart. We’re just seeing Hungry Shark on the prowl for food wherever he can find it. Shark needs to feed his insatiable appetite for power, dominance and money. Shark doesn’t care who he hurts or kills in his hunt–even if it is babies he himself parented long ago.
The IRS should be viewed as a hungry cannibal on the loose. Don’t try to reason with it, just run and be thankful the Canadian government is aware the cannibal is out there.
@Brock
The response of the investment industry association of Canada is to be totally expected and predictable. I and in some sense at the end of the day there probably will be some type of agreement the question is holding our politicians in Canada feet to the fire as to what type of agreement it will be.
@Brock
I just read your link (It’s hard to keep up -there is so much going on here) The most interesting thing about it is the use of the word “residents” There is nothing in it about “citizens”. maybe it’s just a mistake by someone who doesn’t know the difference (many people seem to have that problem), but maybe it is important
“The U.S. government revealed last week that France, Germany, Italy, Spain and the UK signed a deal that would see them share the tax information of U.S. residents who hold bank accounts in their territories. The deal with the five countries — who are known as FATCA partners — has raised questions about whether Canada, a country with millions of U.S. residents,”
I find some hope in that, because it is the Citizen part that is irksome to me. If this was just about US residents, it wouldn’t affect me (or probably most of us, at all) and I can see why the US would legitimately want to know about off-shore accounts belonging to US residents.
. So I think that is where this whole FATCA partners might actually help us in the long run. On it’s own, the US will go after whoever it wants, but the complication of adding “partners” who may be interested in finding their own “resident tax evaders” but not particularly in adding a lot of extra work for their financial institutions to identify “US persons” who are not US-residents, might push things in the right direction. Maybe the US will settle for the accounts of only “US residents” who are a whole lot easier to identify, if that’s what they have to do to get the agreement they want.
One can only hope…
@CanuckDoc
What are describing is presently the current arrangement between Canada and the US ala the focus on residents however it would appear as Canada was not one of the partner countries announced this arrangement is no longer considered desirable by the US. Canada is currently the only country the US automatically exchanges account information with.
@Tim, @Canuckdoc, re ‘residents’ or ‘citizens’ in FATCA articles and discussions; Sometimes (as in the Bob Rae letter in another thread, or as in quotes by Jim Flaherty) I feel more clear or more certain that they have chosen their terms for a very specific reason. Other articles I’m not as clear about – adding to my continued state of uncertainty. So maybe they did only mean US residents (I’m very suspicious that the mention of getting around privacy constraints might be the thin edge….). Re investment firms (IIAC), am hoping that since I didn’t see the credit unions I was looking for on the list (?), perhaps they at least will not be FATCA converts…
Not surprised that the French rep would say nice things about FATCA.
French citizens are fabulously successful capitalists outside of France. The French gov would like to find a way to get some of that money. All those start-ups in California, for example. There is money there but before FATCA it was pretty tough to suck it out. The US is basically saying that they will help. Great news! 🙂 Once that seems feasible and the data starts rolling in I predict that there will be something along the lines of a “Solidarity Tax.” Not too onerous, just a 2-3% tax (like the CSG). Politically it would VERY popular.