See also:
US Citizenship-based taxation and FATCA are egregious violations of the Master Nationality Rule
———————–
This whole situation is getting ridiculous. Through citizenship-based taxation the U.S.:
1. Steals from the wealth of countries;
2. Steals from the wealth of individuals who:
– just happen to have been born in the U.S.; or
– were born to U.S. parents who just happened to be living abroad
3. Terrorizes U.S. citizens living abroad and dual citizens in the same way that Eritrea does.
4. violates the national sovereignty of other countries by:
– imposing taxation by a foreign country on persons who are bona-fide residents of those countries and by collecting tax revenues from within their sovereign borders;
– In countries with foreign exchange controls it obligates bona-fide residents of those countries to illegally obtain a the currency of the taxing country and remove it from that country to pay taxes to the foreign country levying such taxes.
(In essence it requires that such persons decide which prison system they are most likely to survive in either violating the extraterritorial tax laws of the country imposing citizenship-based taxation or the foreign currency control laws of their country of residence by illegally obtaining on the black market currency of the taxing nation and, in violation of the money-laundering laws of the nation of residence illegally remitting the foreign currency to the taxing authority of the country imposing the tax.)
I would like to start a thread on reasons why citizenship-based taxation might actually violate international law.
International law would include:
– treaties
– International Human Rights documents
– International law based on the law of custom
Finally, could citizenship-based taxation been construed to be a crime against humanity?
What about making this a “sticky post” or put it on the side so that it doesn’t get buried.
This is getting almost comical. Why any country would comply with FATCA is simply beyond me.
Think of Ghandi’s peaceful resistance to the British in India. Why not a peaceful resistance to FATCA? What is the world’s biggest debtor going to do about it?
Update:
Oh yes, I forgot. Citizenship-based taxation is even bad for the U.S. (but, hey how could they understand that?)
http://danielberhane.wordpress.com/2011/11/20/eritrea-a-form-of-extortion-eritreas-2-diaspora-tax/
Eritrea: ‘A form of extortion’ – Eritrea’s 2% Diaspora tax.
Posted by Daniel Berhane on Sunday, November 20, 2011 @ 10:54 pm
‘A form of extortion’ – Eritrea’s 2% Diaspora tax
[From: A Week in the Horn Nov. 18, 2011 issue.]
…………”This tax is not of course voluntary and any Eritreans living abroad who wish to visit Eritrea, or to apply for an Eritrean passport, are expected to be able to demonstrate that they have fulfilled a number of requirements visibly demonstrating loyalty to the regime. One of these requirements is payment of the “tax” on earnings which is charged on all Eritreans working overseas.”………….
…..The UN Monitoring Group Report notes that those who fail to pay may be refused passports or visas or denied entry into Eritrea despite their citizenship.”……..
……..”There is, of course, no basis in international law to relate the provision of services for citizens in one country to the payment of tax on money earned and already taxed in another country.”………..
Thanks to Phil Hodgen for providing the link sourced above, in this post; http://hodgen.com/does-the-united-states-stand-alone/
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An interesting article from the “Economist” on Diaspora representation in the legislative bodies of several countries.
“More expatriates are electing political representatives at home”
http://www.economist.com/node/21556222
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Adding a relevant article link here:
http://www.nytimes.com/2011/10/07/opinion/07iht-edsokol07.html?_r=2
‘For Tax Purposes, We Are All Americans’ By RONALD SOKOL Published: October 6, 2011
“But is there a limit to a modern state’s power to tax? The conventional
answer is, “probably not” — as long as government does not flagrantly
discriminate, its power to tax is extensive. Yet in one aspect the
United States has expanded the power far beyond limits fixed by other
nations, and the question of whether it has violated international law
in doing so should be raised.”
Nice to see the overreach getting some coverage, and the language is fairly unequivocal:
http://business.financialpost.com/2012/07/03/an-unnecessary-overreaching-of-u-s-tax-law-into-canada/
An unnecessary overreaching of U.S. tax law into Canada
Vern Krishna
Jul 3, 2012 – 1:50 PM ET
| Last Updated: Jul 3, 2012 1:56 PM ET
…….”In the process, however, the United States is extending its territorial
reach and making victims of nearly a million innocent Canadians with
dual Canadian-American citizenship.”…..
Thanks so much, badger. Great to see more of the real story of all this. Bravo.
@badger
I was going to post something on that article in the Financial Post too.
@Badger and Tim…
That story is a great development. Thanks for posting it. I just posted a story on FATCA which ran on NPR stations today.
I can’t start new threads and this one seemed the one that was the most related:
Check out the latest article posted on Victoria’s blog:
http://thefranco-americanflophouse.blogspot.com/2012/07/tax-foreigners.html
On Wednesday (July 4th), the French government announced it was to increase taxes on foreign-owned second homes. Tax on rental income would rise from 20 per cent to 35.5 per cent, and capital gains tax on property sales would rise from 19 per cent to 34.5 per cent. The extra in each case is being labelled a “social charge”.
This is not citizenship based taxation. This is “foreign based” taxation, penalizing people who want to invest abroad – some type of protectionism I guess.
As Victoria said “the grass is not greener on the other side of the Atlantic.”
@Christrophe…
This is as good a place as any to post it. I had seen that post by Victoria, but hadn’t read it yet, so thanks for putting it here…
Yes, taxing of offshore accounts is an activity that will be increasing by governments the world over. If this French residency taxation of offshore account model is copied in Latin America it would have a BIG impact on Condo sales in Miami which are now resurgent thanks to foreigners snapping them up. Hopefully they are smart enough not to get trapped as a U.S. Person, but even if they avoid that, the more the rental income deposited in U.S. banks, the more the likely hood that they will have their bank account interest being reported to the IRS to turn back over to their government via DATCA. As this begins to happen, funding for condo construction or sales in Miami could fall back. Interesting trend to follow. More and more governments around the world are using the offshore taxation actions to try and force money back home, and you know what, it works!
I know via a CPA in New Zealand, who has an American client, who got caught in serious FX exchange rate tax trap on all his account holding still back in America. The next year, he just closed his U.S. accounts and brought his money to NZ, where he planned to live the rest of his life. The double NZ taxation and FX exposure wasn’t worth it. I think that was the plan of the IRD, and it works. If that begins to happen the world over, might this begin to be a global trend with the re-balancing of capital flows which leads to less globalization? I don’t know, but certainly something to watch.
Could someone please post the Vern Krisha article as a new thread?
*The US has signed but never ratified the convention on the rights of persons with disabilities
The US practice of not allowing parents and/or guardians to renounce on behalf of their children violates several provisions of this convention.
Countries are to ensure the equal right to own and inherit property, to control financial affairs and to have equal access to bank loans, credit and mortgages (Article 12). They are to ensure access to justice on an equal basis with others (Article 13), and make sure that persons with disabilities enjoy the right to liberty and security and are not deprived of their liberty unlawfully or arbitrarily (Article 14).
http://www.un.org/disabilities/convention/convention.shtml
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http://m.theglobeandmail.com/commentary/the-coming-canada-us-tax-war/article556958/?service=mobile
See: ‘The coming Canada-U.S. tax war’
ARTHUR COCKFIELD The Globe and Mail
Thursday, Sep. 06 2012, 10:35 AM EDT
…………..”The Canadian government can take a number of steps to address this situation.
First, it should continue to press the Americans for an exemption for
all U.S. citizens who have lawfully paid taxes on their income to
Canada, and thus have never taken steps to hide their assets. The
Finance Minister neglected to mention the main reason why it makes sense
to provide Canada with an exemption. The two countries have already
agreed to significant tax information exchanges, including information
about cross-border portfolio investment income (interest from a
corporate bond, for example), through co-operative measures they don’t
share with any other countries.
Second, Parliament should table legislation that renders the recent
Obama legislation of no force and effect in Canada. Foreign governments
should be entitled to a reasonable amount of financial information to
help enforce their tax laws, but turning Canadian banks into a branch of
the IRS goes too far.
Finally, assuming this matter can’t be settled between the two
countries, Parliament should pass retaliatory legislation that imposes
the same enforcement regime on U.S. financial institutions that deal
with Canadian “tax” residents. Under Canadian tax law, these residents,
including many Canadians who live in the U.S. and maintain assets and
social ties in Canada, must pay tax to Ottawa on their global income.”………………
Nice pictorial and stats re just how many of us living outside the US are subject to forcible confinement and indentured servitude through US citizenship-based taxation and mounting US government restraints and tax laws preventing us from exercising our international human right to expatriate.
http://www.aaro.org/about-aaro/6m-americans-abroad
“6.32 million Americans (excluding military) live in 160-plus countries.
If all these Americans were placed in one state it would be the 17th most populous state in the U.S.!”
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http://taxpol.blogspot.ca/2012/09/us-to-europe-our-airlines-wont-obey.html
Monday, September 24, 2012
‘US to Europe: our airlines won’t obey your tax laws‘ by Allison Christians
“……………….”attempts to address this problem on a global basis have been festering
for more than 15 years in ICAO and the United States is at the centre of
the problem,” according to Transport & Environment, an NGO based in Brussels.
In the meantime, I’m not sure I understand how the U.S. can simply
declare that its airline industry can ignore the law in Europe.”….
US exceptionalism, hubris, hypocrisy and arrogance. The rest of the world should bow to US dictates – ex. FATCA, and the intrusion of extraterritorial UScitizenship-based taxation into other sovereign nations, and their permanent residents and duals, but the US says it doesn’t have to recognize the tax laws of the rest of the world?
OK… Remember the case of Michael Fay, the US subject who was convicted of vandalism in Singapore? He was sentenced to jail and caning. Then-president Clinton decried Fay’s corporal punishment sentence, but the government of Singapore allowed the Singapore Prison Service to execute Fay’s sentence, which resulted in Fay being given four strokes of the rotan. Oh my! How could a US citizen have such severe punishment inflicted upon him? Because he was subject to the laws of Singapore, which is the country he was in when he committed his offences; he was NOT subject to the laws of the United States, which is where he was not when he committed his offences.
How did tiny Singapore manage to rebuff US attempts to interfere with its laws? Well, because the US can’t really interfere with the execution of another country’s laws without violating its sovereignty. Because of that, you are subject to the laws of the country that you are in – NOT the laws of the country that you are a citizen of. This is exactly what any US consular or embassy official you call upon to help you if you are arrested abroad will tell you. This is also what your country’s consular or embassy official will tell you. They can only stand aside and observe the prosecution of your case, regardless of how unfair it may seem – or be.
Why then, does the US government suddenly think it’s entitled to enforce its laws upon its subjects who are living and banking abroad? It isn’t, and for the the US government to do so indicates that it is behaving quite hypocritically – and arrogantly.
Extraterritoriality, the application, enforcement, and execution of a country’s laws outside of its borders exists, but only under limited circumstances. For example, a US law is in effect aboard a US-flagged vessel on the high seas. Military personnel in a war zone are subject to their country’s code of military justice; naval personnel on shore leave abroad are subject to the jurisdiction of their navy’s shore police. I don’t doubt however, that a crewman on shore leave would be subject to the law of the host country for committing a serious offence.
Anyway, the laws of the country that you are in don’t just punish, they can also protect you. It is the latter that the US government hates – especially where banking confidentiality is the law. As many of you know, many countries have laws that make the disclosure of bank account information to anyone other than the account holder without the account holder’s express consent a criminal offence. The US government really hates this sort of thing.
Most countries (Switzerland, Lichtenstein, Luxembourg, the Cayman Islands, Panama, etc.) with strict banking confidentiality laws will cooperate with the US (and other countries) only when they are presented with compelling evidence that a foreign account-holder’s funds are the result of bona-fide criminal activity, including tax fraud, NOT evasion. Only then, will most of the aforemetioned countries issue a warrant ordering the bank to divulge account information. This is not bad; true criminal lucre needs to be investigated and prosecuted, just as long as compelling evidence is presented before a warrant is issued.
In the US, the federal or state tax authorities may, at any time, freeze and seize a bank account, and force disclosure of its particulars without a court order, let alone any opportunity to contest any such action. Since the US government can’t do this abroad, it’s trying to intimidate other countries into disclosing its subjects’ account information via extraterritoriality. This is very bad, and it should not be tolerated by any other country that values its sovereignty.
It is the responsibility of all countries to give foreigners ‘all lawful aid and protection’ that is requested by passports issued by the US and many other countries. That should mean that if I have a bank account in Switzerland, I should be protected by Swiss laws that protect account confidentiality in the same way that I would be subject to Swiss laws that would punish any criminal act against me, let alone by me.
The United States government’s liberal application of extraterritoriality (beyond that mentioned in the third paragraph of this commentary) to pry into foreign bank accounts in violation of other countries’ laws should be condemned and repelled in the strongest possible terms by any and all countries affected by it. Write to your MP, PM, or president and ask them to take action against the US until it stops doing this.
Businesses and governments should plan retaliatory measures and implement them as soon as possible; file diplomatic protests, expel any US Treasury personnel operating in your country, abrogate tax and certain other extradition treaties, and withdraw cooperation in key areas of importance to the US until the US government and Congress are forced to realize that they have no business interfering in the internal or legal affairs of other countries.
Enact laws making it a criminal offence for any foreign official or any person acting on behalf of any foreign government to conduct any investigative activities in your country without first obtaining permission from proper authority. Devise ways to subject US corporations doing business in your country to the laws of your country in a manner that affects their operations in the US. The Congress will hear about that very quickly, what with all of the corporate lobbyists in Washington.
The US government talks a lot about liberty and justice, but behaves more like an absolute monarchy. For the sake of this Unit and yourselves, fight back until the Crown – oops – I mean the US Congress acknowledges loudly and clearly that its powers end just off the United States’ shores and at its borders. It is in the common interest of the people of the United States and the rest of the world to manifest the staunchest intolerance of the hubris of the US government.*
@Lex
The only thing the “crown” will understand is when the number of ex-pats renouncing / relinquishing their citizenships increases to the point of becoming a political embarrassment / liability for whichever party happens to be in control at the time.
Only then will the homeland politicians begin to wake up to the injustice / destructiveness of citizenship-based taxation. My view is that the implementation FATCA will cause this to happen.
Americans abroad renouncing / relinquishing their citizenships are the casualties of war (in a literary sense) in the fight against the injustice of citizenship-based taxation.
@Patrick, yeah, except in order to avoid the embarrassment, the Feds fail to report the true number, but instead they report a fraction of the actual expatriates. I’ve never made the list so far–perhaps next time around.
The US federal government lies about everything: inflation, unemployment, and now expatriations.
Curious about the content of these two presentations – posted by Anon on the Jack Townsend site http://federaltaxcrimes.blogspot.ca/2012/04/open-forum-comments-to-congress-and-irs.html :
by Anon
“ATTENTION!
On November 8-9, a seminar will be held in New York entitled
International Tax Enforcement. See http://meetings.abanet.org/mee…
At the seminar, Nina Olson will chair a seminar entitled,
“Perspectives on International Tax Enforcement from the U.S. Taxpayer
Advocate Service and Its Foreign Counterparts.”
One of Ms. Olson’s speakers will be J. Paul Dubé, Taxpayers’
Ombudsman, Office of the Taxpayers’ Ombudsman, Ottawa, Canada. Mr. Dube can be reached at Telephone
1-866-586-3839; Facsimile 1-866-586-3855; E-mail:
JPaul.Dube@oto-boc.gc.ca
If you are Canadian, please contact Mr. Dube and tell him
about your experiences with the IRS and its draconian disclosure policies,
penalties, etc. If you are not
Canadian, contact him anyway and tell him about your experiences. What
harm can it do?
Thank you and keep fighting.”
It will be very interesting to see what the Canadian Ombudsman Mr.Dube http://www.oto-boc.gc.ca/menu-eng.html has to say, and the seminar chaired by Nina Olson http://www.taxpayeradvocate.irs.gov/About-TAS/TAS-Leadership