I found an interesting article on FATCA at Financial News this morning that for an “industry” publication is the first I get some sense that they are getting it. A couple of interesting quotes:
“Once countries have got the structure in place to comply with US Fatca, their governments won’t just say, ‘we’ll bear the costs of helping the US gather its tax and leave it at that’. Something will happen.”
That “something” will not be a repeal of US Fatca, Fleming said. The realistic options, he said, are either that every country develops its own version of Fatca, or that a “global Fatca” is developed, where every country has to disclose the assets of every other countries’ citizens under a common framework. He said: “There will have to be a ‘global Fatca framework’ – the alternative is even worse. We couldn’t operate on the basis of 27 Fatcas in the Europe Union, say.”
The significance is enormous, he said: “It will be a global tax system. It is impossible to comprehend how you maintain national tax integrity under such a system; how you get to a global Fatca is an immense challenge.”
A few points they seem to be making:
Many in the financial industry are increasingly taking the view that FATCA and any copy cat legislation is going to be an overriding issue for the rest of the decade.
In closing the authors state that they in fact think the US is playing a “long game” of trying to determine the world’s taxation model.
Unfortunately this article now seems to be pay-walled, but you can sign up for a free four week trial.
http://www.efinancialnews.com/story/2012-03-27/fund-managers-predict-global-fatca
@nobledreamer…
I so think this tweeting stuff is mostly a waste of time, but occasionally I pick up some new information, and get responses which surprise me. It is pretty easy to do, so I just will keep at it a while longer before I pack it in…
@Just Me – Au contraire! I follow you faithfully every day on Twitter and I know others do to. Not a waste of time at all, m’dear. Trust me 🙂
Ok Victoria… I will persevere! 🙂
Just adding similar comment from a most recent thread
This is a more recent story on similar topic is not behind a paywall…
Fatca could send fund groups ‘back to the dark ages’
Fund groups could go “back to the dark ages”, selling only domestically, if other countries adopt a version of the new US tax regime, an expert has warned.
http://www.ftadviser.com/2012/03/30/investments/north-america/fatca-could-send-fund-groups-back-to-the-dark-ages-ygyuT5F40rpxXWfBdhwI5L/article.html
@Victoria, I like your four points in getting our message the right kind of attention. Your use of “diaspora tax” has gotten approval from a few here. Conjures up emotions of struggle, regression and exile better than the bland “extraterritorial taxation”. Roger wonders if it’s too closely related to the plight of the Jews in history and modern times. He did point out that it was used in reference to the UN resolutions against Eritrea in more recent history. Why not ride on those coat tails? He asks if I would find something newer than what his dictionary from 1989 offers that would broaden its meaning. Maybe you can help in diversifying the search, as Google thinks everything I search is for a man 55-65 (apparently I make the wrong kind of cookies for a woman in her mid fifties).
As far as acronyms go, I like GATCA too, but I think I’ll use my FrankenFATCA when a monster is needed.
@bubblebustin
I like ‘riding on the coat tails of Eritrea’. The fact that Susan Rice, America’s ambassador to the UN, stood up and addressed the issue of the terrible extraterritorial tax on the Eritreans, perhaps, people could closely relate to the similarities.
@bubblebustin – Roger is right that “diaspora” was originally a word used to describe the exile and scattering of the Jews but its meaning has expanded beyond that in recent times. Secretary Clinton has captured the modern sense of the term with her IDEA (International Diaspora Engagement Alliance)
http://diasporaalliance.org/forum.cfm
Gabriel Sheffer’s excellent book, Diaspora Politics, has a fine take on it and a very good definition/citeria which was the basis of this Flophouse post – Defining Diaspora
http://thefranco-americanflophouse.blogspot.fr/2011/09/defining-diaspora.html
I used that to argue for the existence of an American Diaspora
http://thefranco-americanflophouse.blogspot.fr/2011/09/american-diaspora.html
Feel free to critique or refine my analysis.
Victoria
@Victoria, thank you.
I just posted this on another thread:
@Roger to answer your question I did a little research and according to Wikipedia:
“The first mention of a diaspora created as a result of exile is found in the Septuagint in the phrase “esē diaspora en pasais basileias tēs gēs” translated to mean “thou shalt be a dispersion in all kingdoms of the earth”. Its use began to develop from this original sense when the Hebrew Bible was translated into Greek; in Ancient Greece the term διασπορά (diaspora) meant “scattering” and was used to refer to citizens of a dominant city-state who emigrated to a conquered land with the purpose of colonization.”
“After the Bible’s translation into Greek, the word Diaspora then was used to refer to the population of Jews exiled from Israel in 587 BCE by the Babylonians, and from Judea in 70 CE by the Roman Empire. It subsequently came to be used to refer to the historical movements of the dispersed ethnic population of Israel, to the cultural development of that population or to the population itself.”
“Expanding definition:
In an article published in 1991, William Safran set out six rules to distinguish diasporas from migrant communities. These included criteria that the group maintains a myth or collective memory of their homeland; they regard their ancestral homeland as their true home, to which they will eventually return; being committed to the restoration or maintenance of that homeland; and they relate “personally or vicariously” to the homeland to a point where it shapes their identity. While Safran’s definitions were influenced by the idea of the Jewish diaspora, he recognised the expanding use of the term.
Rogers Brubaker (2005) also notes that use of the term diaspora has been widening. He suggests that one element of this expansion in use “involves the application of the term diaspora to an ever-broadening set of cases: essentially to any and every nameable population category that is to some extent dispersed in space.”
http://en.wikipedia.org/wiki/Diaspora#Expanding_definition
According to William Safran’s six rules defining a diaspora, it could be argued by some whether US citizens living outside the US should refer to themselves as diaspora, but with the ever-expansion of its definition, why not? By virtue of being taxed, we certainly are committed to the maintenance of the homeland. Or, if we aren’t diaspora are we better described as slaves?
i see elsewhere that there’s been some research on the American diaspora. Here’s something from 2009 from the Harvard Business Review warning of the imminent American brain drain. I have read elsewhere how the current actions of the US are as much to with curbing the loss of intellectual capital as it is to create revenue. http://hbr.org/web/2009/hbr-list/looming-american-diaspora
What extraterritorial Americans come to learn is what Gertrude Stein (also notable as “expatriate”) aptly expressed in these few memorable repetitive words:
There is no there there
With no respect to original context, I years ago latched onto this phrase as a good evocation of the native-born inlander’s expansive sense that everything is here and nowhere else is there. Intuitive imperialism.
The melting pot turns everything into the same slush. The only wars that really left trace on both land and memory were the two that ended in 1789 and 1865. (Full apologies here to 1812 and to guiding light Isaac.)
Some Brocker, I think it was Eric, posted data on percentages of citizens abroad for different countries – recollection is that US was at the bottom of the scale, under 1%.
For me, that is argument enough against attaching to diaspora in the Brock context. We feel dispersed, but the numbers that remain in the “homeland” are far too great. So I like it when Victoria in her closing leans on the word “yet.”
The word diaspora appears to have entered English language usage in 1876 in this sentence:
[The Moravian body’s] extensive diaspora work (as it is termed) of evangelizing among the National Protestant Churches on the continent.
Three subsequent citations from the 1880s all connect with the situation of the Jews.
Sources: Oxford English Dictionary and Barnhart Dictionary of Etymology.
Wow.. it sucks to be an American. That country tries to control US Citizens’ lives in every way. This morning I saw an HBO documentary on Iran. The presenter said that Americans need special permission as a US Citizen to work in Iran from the US Government. Low and behold, I found it here:
http://www.sanctionlaw.com/2011/03/26/a-big-no-no-iranian-americans-working-in-iran-without-a-license/
US Citizens need approval from the US Treasury.
It depresses me that even the most eloquent within our group can’t come up with a term that aptly describes who we are in terms of our struggle. Would “tax slave” be overly dramatic or too closely associated with African Americans for some?
Individuals who were either born in the USA or naturalized US citizens who have changed their citizenship.
Bruce Hutchings is writing about GATCA at the Financial Times again. It is behind a paywall, so here is the details for your information…
He is saying what I have been saying…. FATCA begets DATCA begets GATCA
http://www.efinancialnews.com/story/2012-04-02/fatca-is-about-to-go-global?ref=email_37827
There are some smart people living in America, and many of them work in the country’s Treasury department. The rest of the world is only just beginning to realise how clever they have been to issue legislation that is going, in all probability, to set the template for a worldwide tax system that most of us will not like…….
In Conclusion, he says…
People will also have to face the prospect that their personal financial details will be shared with every government from the middle of nowhere to the back of beyond.
Criminals will be salivating with anticipation. The rest of us are not going to like it one little bit.
And there is nothing, really, that we can do about it. We can hope that the tax raised by doing this will exceed the cost of putting the systems in place, but we can’t stop this ball rolling. It’s too late for us even to negotiate the basic shape of the Fatca, because that’s already been set – by those smart people in the US Treasury, who obviously saw this coming and decided to get ahead of the game.
@JustMe
You wrote “We can hope that the tax raised by doing this will exceed the cost of putting the systems in place”, which I hope is a typo. If not, is there some other logic at play here? I’m all confused now that you’re saying that a lot of good minds came up with FATCA.
Bubblebustin – ask Victoria. She’s definitely more eloquent than I am. I don’t consider myself part of US Dispora; rather, someone who just wants to live his life overseas with no hampering from his place of birth. If I have to renounce to do that, I’ll do it.
I went to a “despachante” (Roger will know this word) about an hour ago. The woman kept asking me questions and I kept answering. She only got suspicious when I pulled out my ID and I have this long foreign-sounding name on it. She said “You’re not Brazilian?” Being American for me here does absolutely nothing for me. I would imagine that being American does nothing for any of us since we are living in different countries with different sets of laws and rules.
@bubblebustin
Sorry for the confusion. That was NOT me saying that … It was the quote from the article. I should have put ” ” around it.
Another story on FATCA going Global…
Why every bank will soon be a tax collector for every government everywhere!
Picking up the theme:
“The whole thing very dramatically changes the investing and tax landscape for Americans with money abroad. Worse, the crazy US rules won’t be the end of it. No, read this piece by William Hutchings in Financial News, and you will see that Fatca is about to go global.”
http://www.moneyweek.com/blog/banks-tax-collectors-for-governments-everywhere-58203
“In the last three years, the Federal Reserve, Bank of England, European Central Bank and Bank of Japan have taken on an extra $10 trillion of debt, according to risk management consultancy CheckRisk, taking their collective balance sheet to $15 trillion.
“They are looking at every possible way to help pay it off. Ramping up their powers of tax collection is one of the few things they can do to help themselves. It is not such a big jump from there to the introduction of a global Fatca, an international framework obliging foreign financial institutions everywhere to act as tax collector for every government.”
How many banks will go bankrupt under the weight of what it costs to be an unpaid tax collector for the world’s governments? How will that affect the broader economy?
Look at the suffering currently being experienced by Americans because they can’t get banks to loan them money to buy a house. There seems to be no end in sight for the misery. Is the solution really to make banking more difficult?
What will a bank do if they get multiple governments making conflicting demands on the same tax payer? A bank cannot be put in the position of being judge and jury to the whole world. If the costs of meeting these demands don’t do them in, tax payer lawsuits will.
If it costs $10 to collect $1 on someone else’s behalf, nobody will want to be in the business of banking.
What the world’s governments want to do is the equivalent of me asking my neighbor to pay my mortgage. I don’t think I’ll try asking him.
Global FATCA would be a dream come true for the G-20. Totalitarianism at its finest.
It will be better to live in a banana republic.
Less government = more freedom.
Pingback: DATCA is not Dead! It lives on… | The Isaac Brock Society
http://ca.news.yahoo.com/irs-rule-threatens-bank-capital-flight-analysts-234103596–sector.html
There is another article re information sharing and opposition from US banks:
“(Reuters) – Banks in Texas, Florida and other southern states could face a pull-out of non-U.S. depositors due to a new U.S. rule finalized on Tuesday, industry analysts said.
The rule issued by the Internal Revenue Service will require U.S. banks, starting on January 1, 2013, to report to the IRS payments of interest made to non-resident aliens.”…………………”Guggenheim Partners financial policy analyst Jaret Seiberg said the new rule “raises the risk that depositors in border states will pull their cash from U.S. banks. At its worst, this could threaten the viability of some of these banks.”
Capital from Latin America is a particular concern.
“We would note that banks in Florida and Texas were especially active in arguing against this rule, which we believe indicates that they have the most at risk,” he added.
(Reporting By Kevin Drawbaugh; editing by Andre Grenon)”
@badger…
That is DATCA morphing into GATCA 🙂
http://isaacbrocksociety.com/2012/04/17/datca-is-not-dead-it-lives-on/
DATCA, the domestic version of FATCA is not dead!
@badger…
BTW, the Kevin that wrote this story, is one of those in the past that has characterized everyone in the OVDI as TAX Cheats coming clean. I have written him before, and he never responds. I think he might be part of a mill that just works quickly from press releases and pushes articles out the door for quick release. I could be wrong, but that is my impression..
Nevermind… I wrote him again today…
Here is what I said. I do not expect a response…
Kevin,
I read with interest your story.. Thank you for drawing wider attention to it, as it is an important issue not fully appreciated.
IRS rule threatens bank capital flight: analysts
http://ca.news.yahoo.com/irs-rule-threatens-bank-capital-flight-analysts-234103596–sector.html
The one important fact I think you may have missed, or was edited out due to brevity requirements, is the relationship of this domestic requirement by the IRS to the FATCA legislation passed in the 2010 Hire act.
I call this DATCA as it is exactly the domestic version of FATCA. It is intended by the IRS as part of it’s strategy to get around other countries opposition to FATCA by offering US reciprocity of tax data exchange.
The IRS noted that the regulations would facilitate intergovernmental cooperation on FATCA implementation by better enabling the agency, in appropriate circumstances, to reciprocate by exchanging information with foreign governments for tax administration purposes.
“Finally, the reporting of information required by these regulations will also directly enhance U.S. tax compliance by making it more difficult for U.S. taxpayers with U.S. deposits to falsely claim to be nonresidents in order to avoid U.S. taxation on their deposit interest income,” the IRS added.
I think you may be missing the BIGGER story…
FATCA begets DATCA which begets GATCA or a Global Tax data exchange.
That is the underlying point of this effort.
Now you can argue endlessly about whether this is good or bad, but if you don’t even know it is happening, how can there be a discussion?
This story at Accounting Today has a fuller explanation along with comments..
http://www.accountingtoday.com/news/IRS-Issues-FATCA-Guidance-Reporting-Interest-Nonresident-Aliens-62370-1.html
Thank you for the reporting you do.
Best regards
And if you don’t believe a Global Tax Data Exchange regime (GATCA) is in the making, read this on Ireland. http://bit.ly/JcaSmO
Florida Banks Association fighting back against DATCA, but do they realize that they are just the leveraging tool to force FATCA down the throats of the FFIs and governments of the world?? I am not sure from reading this op-ed piece, as they told half a story, but I have posted comments online and written them as well just to do my part for awareness.
DATCA plus the FATCA partnerships will cement into place GATCA and the world’s MSM journalist sleep.